Crypto World
What is Section 13(3)? Fed emergency lending explained
When the Fed chair was asked whether the central bank would rescue crypto in a crisis, he avoided one topic with lawyerly care: Section 13(3), the emergency lending power behind every modern bailout. Here is what it is, how 2010 rewrote it, and why a stablecoin rescue through it is closer to illegal than unlikely.
Summary
- Section 13(3) of the Federal Reserve Act is the Fed’s emergency lending authority, allowing it to lend beyond banks in unusual and exigent circumstances. It powered the rescues of Bear Stearns and AIG in 2008 and the pandemic facilities of 2020.
- The Dodd-Frank Act rewrote it in 2010: emergency lending must now be broad-based instead of aimed at a single firm, borrowers must be solvent, collateral must protect taxpayers, and the Treasury secretary must approve.
- Those amendments mean the Fed cannot legally rescue one failing stablecoin issuer even if it wanted to. The only lawful path is a market-wide liquidity facility, and a broken issuer would likely fail the solvency test anyway.
- Fed Chair Kevin Warsh told Congress on July 14 the Fed does not want to be in the bailout business, while avoiding specifics on 13(3). The statute explains the silence: the power is narrower than the market assumes.
- The 2023 rescue that restored USDC’s peg did not use 13(3) at all. It ran through a different tool at a different agency, which is a distinction anyone assessing crypto’s safety net needs to hold clearly.
Every modern financial rescue Americans can name ran through the same fourteen words of statute. Bear Stearns, AIG, the alphabet of 2008 facilities, the pandemic programs of 2020: all of them drew their legal authority from the third paragraph of Section 13 of the Federal Reserve Act, which permits the Fed, in unusual and exigent circumstances, to lend beyond the banking system it normally serves. So when Representative Brad Sherman asked the new Fed chair on July 14 whether crypto would get the treatment money market funds got in 2008, and Kevin Warsh answered that the Fed does not want to be in the bailout business while conspicuously declining to discuss his emergency authority, the exchange pointed directly at this provision. For readers tracking the exchange, crypto.news has also covered the testimony this statute sits under. Most of the crypto market has never read it. That is worth fixing, because what the statute actually says, especially after Congress rewrote it in 2010, changes the question from whether the Fed would rescue a stablecoin issuer to whether it lawfully could. The answer is narrower than almost anyone trading on the assumption of a backstop believes.
Where the power came from
Section 13(3) is a Depression artifact, and its origin explains its shape.
The Federal Reserve of 1913 was built to lend to banks against short-term commercial paper, a deliberately narrow design. The Great Depression broke the design’s assumptions: thousands of banks failed, surviving banks hoarded, and creditworthy businesses could not borrow at any price. Congress responded with the Emergency Relief and Construction Act of July 1932, adding a third paragraph to Section 13 that let the Reserve Banks lend to individuals, partnerships, and corporations, anyone, in effect, when circumstances were unusual and exigent, the borrower could post satisfactory collateral, and at least five members of the Federal Reserve Board approved. Historians of the provision note that its framers meant it to reach the real economy, not merely a weakened financial sector: it was a tool for lending to merchants when the banking system had seized.
Then it went to sleep. The authority sat essentially unused for three-quarters of a century, a loaded but forgotten instrument, until 2008.
What 2008 did with it
The financial crisis turned Section 13(3) from a footnote into the operating system of the rescue.
The Fed invoked it in two distinct ways, and the distinction is the entire modern debate. The first was broad-based: facilities open to whole classes of borrowers, created to revive whole markets. Programs for primary dealers, for commercial paper, for asset-backed securities, six facilities designed, five used, all justified as providing liquidity to the financial system rather than saving anyone in particular. The second was tailored: special assistance built for exactly one counterparty at a time. A $13 billion direct loan to Bear Stearns and roughly $30 billion more to grease its sale to JPMorgan. The AIG rescue. Support arrangements for Citigroup and Bank of America. Four firms the Fed judged too big to fail, each receiving a bespoke intervention under the same fourteen words written for Depression-era merchants.
The tailored rescues worked, in the narrow sense that the firms did not collapse, and they poisoned the politics of the authority, in the broad sense that Congress concluded a central bank should never again design a private rescue for a chosen firm. That conclusion became law.
How Dodd-Frank rewired it
The 2010 Dodd-Frank Act did not repeal Section 13(3). It did something more interesting: it kept the power and removed the part crypto is implicitly counting on.
The amendments, implemented in a final Fed rule in 2015, impose five binding constraints. Emergency lending must be through a program or facility with broad-based eligibility, meaning open to a class of borrowers, designed to supply liquidity to the financial system, and explicitly not for the purpose of aiding a single failing financial company. Borrowers must be solvent; the Fed is required to maintain procedures prohibiting credit to insolvent firms. Collateral must be sufficient to protect taxpayers from losses. The Treasury secretary must approve any program before it launches. And the whole exercise runs under mandatory disclosure with a lag plus Government Accountability Office audit.
Read those constraints against the 2008 record and the intent is unmistakable: the broad facilities would have been legal under the new rules, and Bear Stearns, AIG, Citigroup, and Bank of America would not. Congress banned the bespoke bailout while preserving the market-wide fire hose. The 2020 pandemic response proved the surviving architecture works as designed: the Fed reopened its broad facilities and built new ones, corporate credit, municipal liquidity, Main Street lending, all broad-based, all Treasury-approved, several capitalized with Treasury equity that the Fed leveraged, and none of them a rescue of any single named firm.
Now apply it to crypto
Walk a stablecoin crisis through the modern statute and the market’s implicit assumptions start failing the text.
Scenario one: a major issuer breaks. Its coin depegs, redemptions surge, and its reserves, wherever they sit, cannot be liquidated fast enough. Crypto.news has explained what a run on an issuer looks like in stablecoin markets. Could the Fed lend to the issuer to bridge the run? Under post-2010 law, almost certainly not. A loan to one named issuer is precisely the single-firm assistance Dodd-Frank prohibits; a facility gerrymandered to reach only that issuer would be the same thing in costume, which the 2015 rule anticipates. And an issuer whose liabilities exceed the realizable value of its assets in the relevant window has a solvency problem, which triggers the categorical bar. The legal analysis is not close. The tool the market imagines, the Fed catching a falling Tether or Circle the way it caught AIG, was welded shut fifteen years ago.
Scenario two: the sector runs, not one firm. A generalized stablecoin panic forces mass liquidation of reserve assets, Treasury bills and repo, at fire-sale speed, and the stress starts transmitting into the funding markets banks and money funds share, which is exactly the channel the New York Fed’s staff research has flagged. Here a lawful path exists: a broad-based facility lending against high-quality reserve assets to a defined class of participants, justified as protecting the Treasury and money markets rather than any issuer. It would need Treasury sign-off, five board votes, taxpayer-protective collateral, and eventual disclosure, and it would look less like saving crypto than like the Fed defending the government securities market with crypto as an incidental beneficiary.
Which is the precise shape of Warsh’s July 14 testimony. His full stop, no bailouts, maps onto what the statute already forbids: firm-specific rescue. His hedge, mitigating extraordinary risks, maps onto what the statute still permits: broad liquidity defense of the system. The chair avoided discussing 13(3) not because the answer is embarrassing but because the answer is the law, and stating it plainly, we legally cannot save your issuer, and might flood the market it drowns in, is not a sentence any central banker volunteers.
One more concreteness is worth adding before leaving the crypto scenarios, because the abstract phrase broad-based facility hides real design choices that would decide who actually benefits. A lawful stablecoin-crisis facility would have to define its borrower class, and every plausible definition changes the politics. A facility lending to banks against Treasury collateral, the 2023 template, helps issuers only indirectly, by keeping the bill market orderly while they liquidate. A facility lending to registered stablecoin issuers as a class against their reserve assets would be legally defensible under the broad-based test once the GENIUS regime defines who a permitted issuer is, and it would instantly raise the question Congress fought over in 2008: why this industry’s liquidity and not another’s. A facility reaching exchanges or custodians would strain the financial-system purpose language and almost certainly fail the Treasury-approval gate. The unfinished GENIUS rulebook matters here too, in an underappreciated way: a facility for permitted payment stablecoin issuers is only definable once the licensing rules say who they are. The missed July deadline did not just delay compliance paperwork. It delayed the existence of the borrower class any lawful crypto facility would need, which means that today, in a crisis, even the legal path would begin with regulators improvising definitions, the exact condition emergency lending law was rewritten to prevent.
The rescue that confused everyone
One episode makes the market chronically overestimate the crypto safety net, and it deserves to be filed correctly: March 2023, when USDC broke and was made whole.
That was not Section 13(3), and it was not the Fed acting as lender of last resort to crypto. Circle held $3.3 billion of USDC reserves as deposits at Silicon Valley Bank; the bank failed; the coin fell to roughly 87 cents. What restored it was the FDIC’s systemic risk exception, the different tool that actually rescued crypto once, a separate authority at a separate agency under separate law, which allowed regulators to guarantee all SVB depositors, uninsured ones included, to stop a regional banking contagion. Circle was a depositor, so Circle was caught in the net, so the peg recovered. The Fed’s contribution that weekend was a new lending facility for banks, broad-based, exactly as Dodd-Frank prescribes.
The correct lesson is double-edged. Crypto’s one historical rescue was an accident, a spillover from the traditional system saving itself, and the specific channel it flowed through, uninsured issuer deposits at a bank, is precisely the exposure the post-2023 reserve reforms and the GENIUS Act’s rules are designed to shrink. The accidental-bailout pathway is narrowing by design. What remains, on the Fed side, is only the broad facility, with its political gate at Treasury and its solvency screen at the door.
The money market fund precedent, examined
The exchange that produced Warsh’s testimony began with a specific historical reference, Sherman asking whether crypto would get what money market funds got in 2008, and the comparison rewards a closer look, because it is simultaneously the strongest argument for crypto’s eventual rescue and the strongest argument against it.
What money market funds got in 2008 was not, strictly, a Section 13(3) loan to a failing fund. When the Reserve Primary Fund broke the buck after Lehman’s collapse and a run began across the industry, the response came in two parts. Treasury created a temporary guarantee program for money fund shares, backed by its own Exchange Stabilization Fund, effectively insurance conjured overnight for an uninsured product. The Fed, for its part, built broad-based 13(3) facilities that lent against the assets funds were dumping, restoring the markets the funds needed to meet redemptions. Firm-specific rescue never happened; system-wide liquidity and an improvised guarantee did, and together they stopped the run within weeks.
The parallel to a future stablecoin crisis is close enough to be uncomfortable. A stablecoin is functionally a bearer money market share: a claim on a pool of short-dated assets, promising par, redeemable on demand, held by users who treat it as cash. A sector-wide stablecoin run would look like September 2008 in miniature, mass redemption, fire sales of bills and repo, contagion through whatever the coins collateralize. And the toolkit that worked then maps onto what remains legal now: the Fed could lawfully build a broad facility against reserve assets, exactly as it did for the funds’ assets, and Treasury retains its own instruments outside the Fed’s statute entirely. Anyone reasoning from 2008 concludes that the system, pressed hard enough, finds a way, and that conclusion is not naive. It is the historical base rate.
But the aftermath of 2008 is the other half of the precedent, and it points the opposite way. The money fund rescue was followed by fifteen years of regulatory effort to ensure it never recurred: floating net asset values for institutional funds, liquidity fees, gates, reform fights in 2014 and again in 2023, all animated by the conviction that an uninsured product which received an improvised guarantee once must be restructured so it never needs one again. The rescue bought the industry survival and cost it the presumption of independence. Stablecoins are receiving the sequel in advance: the GENIUS Act’s full-reserve and holder-priority rules are the money fund reforms applied before the crisis instead of after, a legislature attempting to pre-position the orderly-failure machinery so the improvised-guarantee moment never arrives.
Which resolves the Sherman question more precisely than either a yes or a no. Would crypto get what money market funds got? The firm rescues, never, those are barred. The broad liquidity, plausibly, that door remains open by design. The improvised guarantee, only at the point where a stablecoin run visibly threatens the Treasury market itself, and the entire current regulatory project is an attempt to make sure the question is never asked, by making failure survivable before it happens. The 2008 precedent is real, and it comes with its own warning label: the products that used it spent the next decade paying it back.
Why the narrowness is the point
It is tempting to read all this as crypto being uniquely disfavored. The truth is closer to the opposite: crypto is being handed, in advance and in writing, the exact deal the rest of finance learned the hard way.
The GENIUS Act is the resolution regime that makes no-bailout credible. Its full-reserve requirement and its rule paying stablecoin holders ahead of other creditors in an insolvency are the components of orderly failure, the thing a system needs so that firms can die without rescues. A resolution regime and a constrained lender of last resort are complements: the first makes the second credible. The unfinished state of the GENIUS rulebook, all six agencies having missed the July 18 rulemaking deadline, is therefore not a side story. Crypto.news has also covered the unfinished rulebook behind the doctrine. Until redemption mechanics and supervisory triggers are final, an issuer failure would be improvised, and improvisation is historically where no-bailout doctrines go to die. The statute bars the tailored rescue; only a working resolution process bars the pressure for one.
For anyone holding or building in the sector, the practical summary is short. There is no lawful mechanism for the Fed to rescue your issuer, your exchange, or your custodian as such. There is a lawful mechanism for the Fed to flood the markets your issuer’s reserves live in, if a failure ever threatens those markets, and using it requires the Treasury secretary’s signature and a solvent counterparty class. Everything else, reserve quality, segregation, attestation, legal priority, is the actual safety net, and it is private. Section 13(3) is the most famous emergency power in finance, and the most important fact about it for crypto is fourteen years old: Congress already decided who it cannot save.
Frequently asked questions
What is Section 13(3) in plain terms?
It is the provision of the Federal Reserve Act that lets the Fed lend beyond banks, to markets and firms it does not normally serve, when circumstances are unusual and exigent. Added in 1932 to fight the Depression, it requires approval by at least five members of the Federal Reserve Board and satisfactory collateral, and since 2010 it carries additional strict conditions on how and to whom the Fed may lend.
What was it used for historically?
Almost nothing for 75 years, then everything. In 2008 it powered both broad facilities, for primary dealers, commercial paper, and asset-backed securities, and tailored rescues of Bear Stearns, AIG, Citigroup, and Bank of America. In 2020 it authorized the pandemic facilities, including corporate credit and municipal liquidity programs, several backed by Treasury equity. The tailored 2008 rescues are the ones later legislation banned.
How did Dodd-Frank change it?
Five ways. Emergency lending must be broad-based, open to a class of borrowers, and not designed to aid a single failing firm. Borrowers must be solvent. Collateral must be sufficient to protect taxpayers. The Treasury secretary must approve any program. And lending is subject to delayed public disclosure and GAO audit. A 2015 Fed rule implemented these requirements, closing the loophole of single-firm facilities dressed as programs.
Could the Fed use it to save a failing stablecoin issuer?
Under current law, effectively no. A rescue of one named issuer is the single-firm assistance Dodd-Frank prohibits, and an issuer unable to meet redemptions would likely fail the solvency requirement outright. The only lawful use in a stablecoin crisis would be a broad-based liquidity facility serving a whole class of participants, aimed at stabilizing the markets where reserves are held, not at saving any particular company.
Is that what the Fed chair meant by no bailouts?
It maps closely. Kevin Warsh told the House on July 14 that the Fed does not want to be in the bailout business, while pledging to mitigate extraordinary risks and avoiding specifics on 13(3). The statute already forbids the firm-specific rescue and preserves the broad systemic tool, so his stated policy and his hedge track the actual legal boundary rather than a personal preference.
Did Section 13(3) rescue USDC in 2023?
No, and the distinction matters. USDC’s peg was restored because the FDIC invoked its systemic risk exception to make all Silicon Valley Bank depositors whole, and Circle was a depositor with $3.3 billion at the bank. That is a different authority, at a different agency, aimed at banking contagion. The Fed’s role that weekend was a broad-based bank lending facility, consistent with its post-2010 constraints.
Who has to approve emergency lending now?
Three layers. At least five members of the Federal Reserve Board must vote to authorize a program. The Treasury secretary must approve it before launch, which inserts a political checkpoint into every use of the power. And afterward, the program faces mandatory disclosure of participants and terms on a lag, plus audit by the Government Accountability Office.
What actually protects stablecoin holders, then?
The private architecture, not the Fed. Under the GENIUS Act, issuers must hold full reserves in liquid assets and holders are paid ahead of other creditors if an issuer fails, though the detailed implementing rules remain unfinished after regulators missed the July 2026 deadline. Reserve quality, segregation, attestations, and that legal priority are the operative safety net. This is educational information, not financial advice.
Disclaimer: This article is for information and educational purposes only and does not constitute financial, investment, or legal advice. It summarizes statutes and regulatory practice that are subject to interpretation and change, and no description here should be relied on as a prediction of official action. Always do your own research. Information is accurate as of July 20, 2026.
Cuy Sheffield, Visa's head of crypto, said x402 has processed roughly $19 million across roughly 134 million transactions on an adjusted basis, according to a thread he posted Wednesday on X. x402 is a payments protocol for agent- and machine-initiated onchain transactions. The figures come from a… Read the full story at The Defiant
A federal judge approved Anthropic’s $1.5 billion settlement with authors on Monday, finalizing the largest known payout in a US copyright case.
US District Judge Araceli Martinez-Olguin granted final approval and overruled objections from authors who called the sum too small.
How Anthropic’s $1.5 Billion Settlement Reached Approval
Authors sued the artificial intelligence (AI) company Anthropic in 2024. They alleged that it used pirated copies of their books to train its Claude chatbot.
Now-retired Judge William Alsup ruled last June that training on the books was fair use. However, he found that Anthropic had broken the law by storing more than 7 million pirated books.
Martinez-Olguin took over after Alsup retired. She signed the final order on Monday.
“We reached this settlement in 2025, after the court’s landmark ruling that training AI on books is fair use under copyright law — which remains the law today,” Anthropic deputy general counsel Aparna Sridhar said.
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What the Payout Covers
The settlement pays roughly $3,000 per-work payment for over 480,000 works. Martinez-Olguin noted that the sum is four times the $750 minimum for standard copyright infringement.
Claimants covered 440,490 works, or 91.3% of the list, as of April. The deal also requires Anthropic to destroy the pirated book files. The judge rejected objections that the $1.5 billion figure was too low. According to her, the complaints were
“Not grounded in a realistic assessment of the overall risks and rewards of a trial.”
Some authors opted out and continue separate lawsuits against the company. The case is the first major US AI copyright dispute to settle.
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The post Court Signs Off on Record $1.5 Billion Anthropic Copyright Payout appeared first on BeInCrypto.
Celsius co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein will pay a combined $6.5 million to settle Federal Trade Commission charges tied to the collapsed crypto lender.Â
Summary
- Leon and Goldstein will pay $6.5 million combined under separate FTC settlements over Celsius claims.
- The FTC accused Celsius executives of falsely promoting customer deposits as safe and readily available.
- Mashinsky’s earlier $10 million settlement brings total payments from three Celsius co-founders to $16.5 million.
The FTC said Leon will pay $4.1 million, while Goldstein will pay $2.4 million under separate court orders.
The settlements end the FTC cases against the two executives and follow former Celsius CEO Alex Mashinsky’s $10 million agreement in April. The three co-founders will pay a combined $16.5 million under their respective settlements. The FTC accused them of misleading customers about the safety, availability and management of assets deposited with Celsius.
Leon, Celsius’ former chief strategy officer, must pay $4.1 million under an order entered by U.S. District Judge Denise Cote on June 29. The order also enters a $4.72 billion judgment against him, with most of that amount suspended if he meets the settlement terms and provided accurate financial disclosures to the FTC.
Goldstein, who served as Celsius’ chief technology officer, will pay $2.4 million, according to the FTC’s latest release. Both men also face limits on future business activities. Leon cannot market or sell services used to deposit, exchange, invest or withdraw assets. Goldstein faces a similar ban covering retail crypto products used to buy, sell, deposit, withdraw, distribute or trade digital assets.
The orders also prohibit the two executives from making false statements about products or services. They cannot violate provisions of the Gramm-Leach-Bliley Act by obtaining customer financial information through false or fraudulent representations. Leon also faces restrictions on sharing consumers’ nonpublic personal information without informed consent.
FTC case focused on Celsius safety and reserve claims
The FTC filed its case against Celsius and its executives in July 2023. The regulator alleged that the company presented itself as a safer alternative to traditional banks while making claims about its reserves, lending practices and insurance coverage that were not accurate.
According to the regulator, Celsius told customers they could withdraw deposits at any time and claimed it maintained a $750 million insurance policy covering customer funds. The company also said it held enough reserves to meet customer obligations and did not make unsecured loans. The FTC alleged that Celsius instead made $1.2 billion in unsecured loans by April 2022 and lacked the insurance policy it advertised.
The FTC also accused executives of continuing to reassure customers as Celsius moved closer to bankruptcy. The regulator said they “continued to claim that customers’ deposits were safe days before the company filed for bankruptcy.” Celsius suspended customer withdrawals in June 2022 and filed for bankruptcy the following month.
Mashinsky faces separate bans after $10 million FTC deal
The latest settlements follow the FTC’s April agreement with Mashinsky.The former CEO agreed to pay $10 million and accepted a permanent ban on promoting or offering asset-related products. His order also included a $4.72 billion judgment, although most remains suspended under conditions set by the settlement.
Mashinsky later received another permanent restriction from the Commodity Futures Trading Commission. As crypto.news reported in June, a federal court barred him from trading in markets overseen by the CFTC or registering with the agency. That settlement closed the regulator’s civil enforcement case against him and Celsius.
His criminal case remains separate from the FTC settlements. A federal judge sentenced Mashinsky to 12 years in prison in May 2025 after he pleaded guilty to commodities fraud and securities fraud. Prosecutors said he misled customers about Celsius’ financial condition, investment risks and yield-generating activities. The court also ordered him to forfeit more than $48 million.
Celsius creditors continue recovering funds after the collapse
Celsius held about $25 billion in assets at its peak before its business deteriorated during the 2022 crypto market downturn. When the company stopped withdrawals, hundreds of thousands of customers had about $4.7 billion in inaccessible assets on the platform, according to the U.S. Department of Justice.
The bankruptcy recovery process has continued separately from the cases against former executives. As previously reported, Celsius began a third creditor distribution worth about $220.6 million in August 2025, bringing total recoveries at the time to nearly 65% of eligible claims.
Another former Celsius executive, Roni Cohen-Pavon, also faced legal action over his role at the company. Crypto.news reported in May that he avoided additional prison time after cooperating with prosecutors in the Mashinsky case.
With the Leon and Goldstein orders now entered, the FTC has reached settlements with all three Celsius co-founders named in its 2023 case. The agency’s official case page still lists the broader proceeding as pending, while separate bankruptcy, securities and criminal matters have followed their own legal processes.
White House crypto adviser Patrick Witt will remain in his post after his scheduled military training was deferred, keeping the administration’s lead CLARITY Act negotiator in Washington during the final weeks before the Senate’s summer break.Â
Summary
- Patrick Witt deferred military training, keeping the White House’s lead CLARITY Act negotiator in place.
- The Senate faces a narrow timeline as unresolved ethics language still threatens the bill’s vote.
- Harry Jung plans to leave government, removing the deputy once expected to cover Witt’s absence.
Witt had planned to begin Judge Advocate General training with the Georgia Army National Guard on July 27.
Witt confirmed the change in a July 20 post on X. He said he remained committed to his military service but added that “my training has been deferred, and that I will be able to see this effort through to the end.” The decision reverses a plan that would have shifted many of his responsibilities to White House Crypto Council deputy director Harry Jung.
Witt stays as the Senate calendar narrows
Witt serves as executive director of the President’s Council of Advisors for Digital Assets and has played a central role in talks involving the White House, lawmakers, banks and crypto companies. As previously reported by crypto.news, he had already postponed the same training in April while CLARITY Act negotiations continued.
The Senate now has little room left on its calendar. Aug. 7 is the final scheduled session day before a state work period begins on Aug. 10. Supporters have treated that window as an important target because election-year politics could make a later vote harder to arrange.
The CLARITY Act would create federal rules for digital asset markets and divide oversight between the Securities and Exchange Commission and Commodity Futures Trading Commission. Senate staff still need to resolve differences before leaders can bring a final version to the floor, where the bill would likely need Democratic support.
Ethics dispute still blocks a final Senate agreement
Witt’s decision to stay does not resolve the policy disputes holding up the bill. Senate negotiators still lack a final agreement over ethics rules that would restrict elected officials from profiting from crypto-related businesses. The White House had not accepted the proposed language as of that report.
Democrats have pushed for tighter limits covering government officials with digital asset interests, while the White House has argued that ethics standards should apply evenly. Senate Majority Leader John Thune has also acknowledged that Republicans still need a bipartisan agreement to move the measure forward.
The uncertainty has affected market expectations. A related crypto.news report said Polymarket traders placed the CLARITY Act’s chance of becoming law in 2026 at 31% on July 20. The figure can change quickly, but it reflected doubts about whether lawmakers could settle the dispute before the August recess.
Consumer protections and stablecoin yield remain in focus
The latest negotiations have also produced changes on customer protections. Coinbase vice chair Ryan VanGrack said Senate Democrats secured stronger safeguards in the revised bill and described the changes as giving the legislation “more teeth.” He did not provide full details, and lawmakers had not released the final Senate text as of July 20.
Other disagreements have centered on stablecoin rewards, decentralized software developers and law enforcement powers. The stablecoin yield debate has drawn strong lobbying from banks and crypto companies. Banking groups have argued that rewards paid on stablecoin balances could pull deposits from traditional banks, while crypto firms have pushed to preserve room for activity-based rewards under a regulated framework.
As previously reported, the Senate Banking Committee cleared a version of the CLARITY Act in May. Witt has worked on several of the unresolved issues, keeping him involved in the administration’s effort to reach a deal with lawmakers from both parties.
Harry Jung’s exit changes the White House staffing plan
Witt’s revised plans come as Harry Jung prepares to leave government service. Jung, the deputy director of the President’s Council of Advisors for Digital Assets, said on July 21 that he would leave his post in two weeks. He had been expected to assume many of Witt’s responsibilities during the planned military leave.
Jung said he was proud of the council’s work and described the past two years as transformative for U.S. crypto policy. His departure means the White House will avoid an immediate leadership gap because Witt is staying. The council is also working on GENIUS Act implementation, the Strategic Bitcoin Reserve and crypto tax policy.
Witt’s continued presence removes one staffing uncertainty, but the legislation still depends on lawmakers resolving ethics provisions, consumer rules and other contested sections. The Senate has not announced a final floor vote, leaving the bill’s path tied to negotiations before lawmakers leave Washington in August.
Ondo Finance, a tokenization platform for real-world assets, said Thursday it has partnered with SBI Group to tokenize Japanese assets, with distribution across SBI's ecosystem and settlement using the group's JPYSC yen stablecoin. "The collaboration covers tokenizing Japanese assets with… Read the full story at The Defiant
Goldman Sachs said Brent crude could climb back toward $120 a barrel by the fourth quarter, approaching the $126.41 intraday peak it hit on April 30 during the US-Iran war, if disruptions to flows through the Strait of Hormuz continue.
Analysts led by Daan Struyven said escalation in the Middle East, combined with a drop in Persian Gulf flows to below 45% of pre-war levels, has pushed prices higher this month.
Goldman’s Base Case Still Points Lower
Goldman’s own forecast remains for Brent at $80 a barrel in the fourth quarter and $75 next year, premised on a de-escalation between the US and Iran. Brent topped $90 a barrel on July 19 as the conflict intensified, before ceasefire hopes eased the rally to $88.47 by July 21.
Still, the analysts said risks skew toward higher prices given the chance of a wider Hormuz blockade risk, as well as potential disruption in the Red Sea, where Houthi rebels have threatened to blockade Saudi shipments.
“Escalation in the Middle East and the decline in estimated Persian Gulf flows to below 45% of pre-war levels have pushed oil prices back up.”
Daan Struyven, Goldman
Where the Rally Could Lose Steam
Lower global inventories have left the market more exposed to shocks, though a slump in Chinese imports and greater demand elasticity could cap gains, the note said. That echoes BeInCrypto’s earlier coverage of reserve buffer depletion fueling similar upside calls from TD Securities.
To hedge persistent shocks from the Middle East and Russia, Goldman recommended going long the December 2026 to March 2027 European diesel timespread, citing tight diesel markets, continued Ukrainian strikes on Russian refineries, and elevated gas price odds tied to the conflict.
The post Goldman Says Brent Oil Could Near Its War-Era Peak, Hitting $120 appeared first on BeInCrypto.
A recent auction of 30-year Treasury bonds, sold at a yield of 5.06%, has brought rising long-term US borrowing costs back into focus.
Specifically, it has revived concern among certain market observers about how tighter monetary conditions could impact Bitcoin (BTC) and other risky assets, just as investors are getting ready for the Fed’s next policy meeting.
Treasury Yields Hit a Post-2007 High
That 5.06% print is the highest 30-year auction yield since 2007, and it reflects how expensive it has become for the US government to finance its growing debt. Furthermore, the 30-year Treasury yield has also climbed back above 5%, although it remains below the 5.20% peak reached on May 20, which was also the highest level since July 2007.
For comparison, auctions for the same maturity cleared at roughly 2% in early 2022, which pointed to heavier Treasury supply, rising inflation risk, and growing borrowing needs as the reasons the government now has to pay more to attract buyers.
Market commentators at The Kobeissi Letter also flagged the AI investment boom as an added source of pressure, since tech companies issuing record debt to fund AI infrastructure are competing with the government for the same pool of capital. “The US debt crisis is intensifying,” the account wrote.
Meanwhile, Spot On Chain analyst Hupzy called the move a structural headwind for BTC and risk assets, arguing that higher discount rates compress valuations across the risk curve and that yields above 5% make speculative allocation harder to justify.
Hupzy described the fiscal picture as double-edged, since rising debt costs could eventually push the Fed toward a dovish pivot, but said that the near-term signal is “risk-off as markets price deteriorating sovereign credit.” They also pointed to the May 5.20% peak as a level to watch, since a break above it would open a new stretch of sustained high long-term rates.
Bitcoin was last trading above $64,000, down 1.3% over 24 hours but still up 1.7% over the past week and 1.2% in two weeks. The 30-day change is almost flat at 0.4%, with BTC’s market cap standing at around $1.284 trillion and the OG crypto trading roughly 49% below its all-time high of over $126,000 reached on October 6, 2025.
Fed Meeting Now Takes Center Stage for Crypto Markets
Treasury yields will not determine Bitcoin’s direction on their own, and the bond market move has come during a relatively quiet week for scheduled US economic data, with investors focusing on weekly jobless claims, purchasing managers’ index reports, and quarterly earnings from Alphabet and Tesla before the Federal Reserve’s July 29 meeting.
Furthermore, the CME FedWatch data currently assigns an 86% probability that policymakers will leave interest rates unchanged, and, as CryptoPotato reported, an unexpected rate increase could trigger selling across cryptocurrencies and equities because markets have largely priced in no change.
That said, the return of 5% long-term borrowing costs is certainly another macro factor that investors need to watch. And with the Fed decision approaching and bond yields sitting at multiyear highs, any surprise in either market could quickly spill over into crypto trading.
The post Bitcoin and Risk Assets Under Pressure as 30-Year Yields Push Above 5% appeared first on CryptoPotato.
An average of 85% of concentrated-liquidity capital sat underutilized across decentralized exchanges in the first half of 2026, according to onchain research by Dune, the analytics platform, produced for the DEX aggregator 1inch. The study found 29.5% of that capital was fully outside the active… Read the full story at The Defiant
Celsius’ former co-founders are now facing additional financial consequences tied to the U.S. Federal Trade Commission’s case over what the regulator said were misleading assurances about the safety of customer assets before the crypto lender’s 2022 collapse.
The FTC has secured settlements in which Shlomi Daniel Leon and Hanoch “Nuke” Goldstein were ordered to pay a combined over $6 million to resolve FTC allegations that they misrepresented the security of the Celsius platform ahead of its bankruptcy filing. The latest orders follow the broader ripple effects of Celsius’ failure, which left users seeking recovery of funds after the firm, once valued on the promise of managed custody and lending, unraveled during a market downturn.
Key takeaways
- Goldstein, Celsius’ former chief technology officer, was ordered to pay $2.014 million under a court order signed Monday by U.S. District Judge Denise Cote.
- Leon, the former chief strategy officer, was ordered to pay $4.1 million under a separate stipulated order entered on June 29.
- The settlements extend FTC enforcement beyond CEO Alex Mashinsky, targeting additional executives’ alleged role in customer-facing representations.
- Both orders include restrictions barring the co-founders from marketing or selling products or services that could be used to deposit, exchange, invest, or withdraw crypto assets.
- The FTC previously alleged that Celsius misled customers about reserves, insurance coverage, and the nature of loans, and these settlements are credited toward related judgments.
Court-ordered payments and the scope of the bans
According to the FTC, the settlements with Goldstein and Leon are designed to address alleged consumer harm tied to the way Celsius presented its platform to retail customers. Judge Denise Cote’s order signed Monday requires Goldstein to pay $2.014 million. Leon’s stipulated order—entered on June 29—requires a larger payment of $4.1 million.
Beyond the monetary terms, the FTC’s statement notes that both co-founders agreed to restrictions aimed at reducing their ability to operate in ways connected to crypto custody and trading. In particular, the FTC said Leon is barred from marketing or selling products or services that could be used to deposit, exchange, invest, or withdraw assets. For Goldstein, the FTC describes a similar restriction covering retail products or services that could be used to buy, sell, deposit, withdraw, distribute, or trade cryptocurrency.
“Similarly, Goldstein has agreed to a ban on marketing or selling retail products or services that can be used to buy, sell, deposit, withdraw, distribute or trade cryptocurrency.”
FTC allegations: reserves, insurance, and loan practices
At the center of the FTC’s complaint was the claim that Celsius presented a picture of safety that, according to the regulator, did not match its actual conditions. The FTC alleged Celsius falsely told customers it maintained sufficient reserves to satisfy withdrawal demands.
The regulator also alleged Celsius promoted a $750 million insurance policy covering customer deposits, and represented that it did not issue unsecured loans.
The FTC further argued that these claims were made while Celsius’ executives continued to assure customers that deposits were safe in the final period before the platform collapsed. In the regulator’s framing, the alleged misrepresentations were not merely marketing mistakes; they were repeated assurances made during a period when the company’s financial situation was deteriorating.
How the settlements connect to the Mashinsky case
The settlements with Leon and Goldstein are part of an enforcement arc that began with the FTC’s action against Celsius founder and former CEO Alex Mashinsky, and then expanded to other executives. Earlier coverage of the Celsius fallout, including the trading restrictions placed on Mashinsky, underscored that regulatory scrutiny extended well beyond one individual once the company failed.
In April, Mashinsky agreed to an FTC settlement that included a permanent bar from promoting asset-related products and a $10 million payment. That settlement also involved a larger judgment framework described as $4.72 billion in a partially suspended structure, reflecting consumer harm allegations. Earlier reporting noted the settlement terms, including the $10 million payment and the partially suspended judgment.
The newly ordered payments from Goldstein and Leon—$2.014 million and $4.1 million, respectively—are stated to be credited against the $4.72 billion judgment. That matters because it shows how the FTC is coordinating multiple executive settlements into a single remedial accounting process, rather than treating each settlement as an isolated event.
Separately from the FTC track, the broader criminal fallout has also progressed. The U.S. Department of Justice previously reported that Mashinsky was sentenced to 12 years in prison in May 2025 after pleading guilty to commodities and securities fraud charges. Prosecutors said Mashinsky misled Celsius customers about the company’s profitability, investment risks, and the safety of customer funds.
Why these enforcement steps matter for Celsius customers and the industry
For Celsius users, the immediate takeaway is that the FTC’s case continues to identify and penalize senior figures beyond the most visible CEO at the time of collapse. The settlements do not reverse the bankruptcy outcome, but they do reinforce that the regulator intends to pursue accountability tied to marketing claims directed at retail customers.
For the broader crypto lending sector, these orders are another signal that “custody-and-lending” narratives—particularly those that reassure customers about reserves, insurance, and withdrawal readiness—are likely to remain under intense regulatory scrutiny. The bans also go beyond fines: they target future conduct by restricting marketing and sales roles connected to crypto deposit and trading functions.
What remains to be watched is how these settlements fit into the continued legal and enforcement landscape around Celsius and related claims. The crediting of co-founders’ payments against the $4.72 billion judgment suggests that additional financial outcomes may still surface as the FTC tallies and resolves separate executive-level actions tied to the same alleged consumer harm.
Going forward, investors and customers should pay attention to two things: whether additional Celsius executives face similar settlement-driven restrictions, and how courts continue to reconcile multiple payments under the same FTC judgment framework—especially as regulators seek to close gaps between public assurances and the actual condition of crypto lending platforms before collapses.
Polymarket has referred nearly 100 suspicious crypto wallets to law enforcement as the prediction market platform expands its monitoring of possible insider trading.
Summary
- Polymarket referred nearly 100 suspicious wallets to authorities as insider-trading concerns grew across prediction markets.
- Bloomberg analysis found about $200 million in flagged trades, concentrated heavily in geopolitical prediction markets.
- Recent prosecutions involving Venezuela and Google-linked wagers have increased scrutiny of nonpublic information misuse cases.
The referrals come as a Bloomberg analysis of Polysights data found that about $200 million in Polymarket trades during the first half of 2026 showed characteristics associated with “potential insider activity.”Â
Much of the flagged activity involved geopolitical markets tied to Iran and Venezuela. The data does not prove that every flagged trade involved illegal conduct, but it shows the volume of activity now facing closer review as prediction markets draw more regulatory attention.
Polymarket expands surveillance as suspicious trades rise
Polymarket Chief Legal Officer Neal Kumar said the company’s internal process had resulted in nearly 100 wallet referrals to authorities. The platform has also strengthened surveillance as regulators examine whether traders may have used confidential information to gain an advantage in event contracts. Because Polymarket records transactions on a public blockchain, investigators can trace wallet activity, funding flows and trading patterns even when users trade through pseudonymous addresses.
The Bloomberg review relied on Polysights data that identified trades with features associated with possible informed activity. Analysts can examine signals such as newly created wallets, unusually concentrated positions and trades placed shortly before major events.Â
Those signals can direct attention toward accounts that deserve further review. However, a “suspicious” label does not establish insider trading, and a referral does not mean authorities will file charges.
In addition, the growing scrutiny follows a U.S. case involving Army Master Sergeant Gannon Ken Van Dyke. As previously reported by crypto.news, the Department of Justice accused Van Dyke of using classified information about a U.S. military operation targeting Venezuelan President Nicolás Maduro to place Polymarket trades. Prosecutors said he made about $409,881 after placing more than $33,000 in bets linked to Maduro’s removal.
The CFTC filed a parallel case, while the Justice Department brought charges tied to the alleged use of classified information. The case provides one of the clearest examples of authorities treating prediction-market activity as part of a broader criminal investigation. It also shows why wallet referrals can matter: on-chain records can preserve a visible trading trail even when the public does not know the trader’s identity when the transactions occur.
Google-linked case adds to insider-trading concerns
A separate case involved a Google engineer accused of using unreleased company data to trade on Polymarket. As crypto.news reported in May, U.S. prosecutors and the CFTC charged Michele Spagnuolo over allegations that he used confidential Google search trend information to place about $2.7 million in prediction-market wagers. Authorities said the trades generated about $1.2 million in profit.
That case broadened the focus beyond military and government information. It showed that prediction markets can attract traders with access to private corporate data as well as sensitive state information. The allegations also raised questions about how platforms monitor markets whose outcomes depend on information controlled by a small group of employees, officials or contractors.
Iran markets bring geopolitical trading under closer review
Geopolitical markets have drawn some of the strongest scrutiny in 2026. More than $529 million traded on Polymarket markets tied to the timing of strikes on Iran, while several newly created wallets drew attention after making profitable positions before major events. Six Democratic senators later urged the CFTC to restrict contracts tied to death, citing national security and public safety concerns.
The Bloomberg analysis places those earlier cases within a wider pattern. According to the Polysights data, many flagged trades involved markets linked to Iran and Venezuela. Polymarket’s decision to refer nearly 100 wallets shows a more active surveillance approach, although the company has not said that every referred wallet broke the law or used nonpublic information.
Prediction markets also face wider regulatory pressure. As crypto.news reported on July 19, France ordered internet service providers to block Polymarket after regulators cited unauthorized gambling, weak identity checks and concerns about market integrity. The Czech Republic has also restricted access, while European regulators continue to examine whether some event contracts fall under existing financial rules.
Lawmakers designed most insider-trading rules around securities markets, while prediction contracts can cover politics, military operations, technology and corporate data. That makes enforcement more complex when traders use information that the public cannot access.Â
Polymarket’s referrals give authorities wallet-level data to review, but investigators still need evidence connecting specific trades to unlawful use of confidential or classified information.
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