Cointelegraph

Across the globe, it remains common for crypto users to have their bank accounts frozen and transfers blocked, even as institutional adoption rises.

Panos Mekras, co-founder and CEO of blockchain fintech Anodos Labs, began dealing with crypto in Greece in the late 2010s. Most Greek banks didn’t allow transfers to crypto exchanges back then. Mekras experienced blocked card payments until one bank finally permitted his transfers, but first, he was questioned to ensure he understood he was interacting with a “risky” counterparty.

Mekras told Cointelegraph that those early rejections are symptomatic of how banks treat digital assets as inherently high risk. That label often led to account closures or sudden freezes without explanation, ultimately pushing his business to rely solely on onchain tools and payment rails.

Public perception of crypto has since evolved. Now, crypto is undergoing an image refresh, from a speculative asset class to an infrastructure layer for future financial products. However, Mekras said he still experiences the same banking barriers, as recently as a “few months ago”:

“I tried to send money from an exchange to Revolut, and they froze my account for three weeks. I had no access to my [funds] during that time.”

The long shadow of crypto debanking

Mekras isn’t the lone crypto holder with such complaints despite banks announcing expansions into custody and blockchain initiatives.

A January report from the UK Cryptoasset Business Council found that bank transfers to exchanges were being blocked or delayed, with roughly 40% of payments encountering restrictions and 80% of exchanges reporting increased friction over the past year.

The council warned that blanket bans and transaction limits are often applied without regard to the legal status of the exchange.

How banks are serving crypto users in the UK. Source: UK Cryptoasset Business Council

Revolut is one of two banks that permit both bank transfers and debit cards in the UK council’s study, and it is also the platform where Mekras claims to have experienced his recent account freeze. It operates as an authorized UK bank “with restrictions,” meaning it is currently building up its banking processes before full launch. It also holds a European Union banking license through Lithuania and offers crypto trading services in its app.

A Revolut spokesperson told Cointelegraph it treats account freezes as a “last-resort” customer protection measure in compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.

“A temporary freeze may occur if our systems detect irregular activity. This could be a combination of a few factors, such as if a customer interacts with a platform frequently exploited by fraudsters, or we believe that the funds in question may be the proceeds of crime or sanctions circumvention,” the spokesperson said.

The representative added that since Oct. 1, just 0.7% of Revolut accounts where customers deposited crypto funds were restricted or frozen after investigation.

When banks close doors, users move onchain

In some regions, crypto is blocked and leaves users to more extreme restrictions. Crypto on- and off-ramps are not legally possible in regions like China, so users resort to peer-to-peer (P2P) platforms or black markets to trade crypto.

While China sits on the extreme end of the spectrum, other jurisdictions have eased official and unofficial restrictions. Nigeria once banned crypto and even blocked P2P platforms. However, it formally recognized digital assets as securities in 2025.

Related: Crypto takeaways from Davos: Politics and money collide

Similar banking friction patterns also emerged in the US. Lawmakers and the industry have invoked the term “Operation Chokepoint 2.0” to describe the federal regulators’ informal guidance that discouraged banks from maintaining relationships with crypto companies.

Crypto industry claims about “Operation Chokepoint 2.0” were recently echoed in official findings. Source: Alex Thorn

The original “Operation Choke Point” was an initiative in which enforcement agencies were accused of pressuring banks to cut ties with politically contentious industries such as payday lenders and firearms sellers.

In January 2025, Donald Trump took office as the president of the US and has been pushing for crypto-friendly policies to position the world’s largest economy as the “crypto capital” of the world.

Crypto debanking issues have since been officially recognized. In December, the US Office of the Comptroller of the Currency (OCC) released its findings on debanking practices by nine of the country’s largest banks. The OCC also published an interpretive letter to confirm that banks may facilitate crypto transactions in a broker-like capacity.

Crypto is named among nine sectors in OCC’s review of large banks’ debanking activities. Source: OCC

Regardless of the positive momentum, users still complain that the banking sector won’t service accounts exposed to cryptocurrencies.

“This is still the case [and] there are still anti-crypto positions. Some have even said publicly that they are not willing to support crypto activity or engage with the industry,” said Mekras.

Mekras argued that users can consider fully detaching from the traditional banking system and moving finances onchain. It sounds viable in theory, but in reality, most businesses and users still cannot operate purely within crypto without reliable access to fiat rails.

Banking’s turn toward blockchain infrastructure

In recent years, there has been a global shift in how traditional financial institutions engage with crypto.

Major banks and financial infrastructures are increasingly building products and services tied to Web3. In the US, 60% of the top 25 banks are reportedly offering or planning Bitcoin-related services, including custody, trading and advisory solutions.

A large chunk of top banks are exploring Bitcoin-related services. Source: River

Across Europe, regulated services such as crypto custody and settlement are being introduced by legacy exchanges and financial groups under the Markets in Crypto-Assets Regulations (MiCA). In the UK, HSBC’s blockchain platform was selected to support pilot issuances of tokenized government bonds.

In that backdrop of institutional adoption, some companies working to bridge banks and blockchain claim that the challenges that lead to account freezes are linked to tooling gaps and risk frameworks inside banks.

“The problem is that there’s a huge amount of friction because traditional banks don’t really have the internal infrastructure to interpret blockchain data in a way that fits inside their existing risk and compliance frameworks,” Eyal Daskal, CEO of Crymbo — a blockchain infrastructure platform for institutions — told Cointelegraph.

He described the situation as one where banks often default to precautionary measures because they lack the ability to link onchain activity with the identity and compliance signals they rely on:

“If crypto is involved, they block the account and treat it as out of scope. It’s the simplest option for them because they don’t have the tools to assess it properly.”

Crypto is entering the financial mainstream, but for many users, access to basic banking still depends on whether a bank’s risk engine can understand what happens onchain. Until that gap closes, the industry’s institutional embrace and retail friction may continue to coexist.

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Bitcoin infrastructure company Voltage has announced the launch of Voltage Credit, a programmatic revolving line of credit designed to let businesses send payments with Lightning-style instant finality while still repaying the credit line in US dollars from a standard bank account, or in Bitcoin.

In a Thursday release shared with Cointelegraph, the company, which provides enterprise-grade solutions for regulated businesses, said it was targeting chief financial officers and treasurers who wanted “send now, pay later” flexibility on the fastest payment rails available, without having to hold crypto on their balance sheet.

Rather than positioning it as just another Lightning-backed loan, Voltage pitched the product as an embedded piece of the payment flow, and the “first revolving line of credit that delivers instant payment finality and the capability to settle entirely in USD.”

CEO Graham Krizek told Cointelegraph that while players like Stripe and Block blended faster payments with working capital, they didn’t embed a revolving credit facility directly into Lightning payments in the way Voltage was doing, adding that Stripe did not support Lightning at all.

In the Block model, he said, Lightning and credit remained separate workflows, whereas Voltage let businesses originate credit and immediately use it to send or receive Lightning and stablecoin payments in real time, without pre-funding or manual treasury movements.

Underwriting against payment flows, not static BTC collateral

Voltage says it departs from traditional crypto lending by underwriting against payment flows rather than static Bitcoin (BTC) collateral. 

Because Voltage already powers the underlying Bitcoin and Lightning infrastructure, it can size and adjust credit limits based on the volume a business processes through its platform. 

“Voltage Credit is the lender of record in our platform,” Krizek said, noting that the company originated all loans itself and was not relying on a bank, card network or third-party fintech to fund the lines.

Krizek said the platform carried a 12% annual percentage yield (APY) that accrued daily on outstanding balances, with a flat platform fee design intended to avoid transaction-based pricing that gets more expensive as volumes scale. 

He said that revolving lines of credit themselves are not new, but what is new is bringing that “familiar financial construct” into an environment where Bitcoin and Lightning move money instantly and globally.

“We are effectively modernizing the revolving credit model so it operates at internet speed, rather than at the pace of legacy banking and card networks,” he said.

From $1 million pilot to institutional Lightning rails

The launch builds on Voltage’s recent role supporting a $1 million Lightning Network payment between Secure Digital Markets and Kraken on Feb. 5, a pilot that was framed as the largest publicly reported transaction on the network. 

Krizek said that episode was meant to test Lightning’s suitability for institutional-sized flows and that the network “is capable of handling massive payment volumes and is ready for institutional-scale use.”

$1 million in a single Lightning transaction. Source: SDM

Voltage Credit is initially available to qualified US‑headquartered businesses, Krizek said, saying the company can currently serve all US states except California, Nevada, North Dakota, Vermont and Washington, D.C., as a registered commercial lender. 

Early traction, he added, has come from exchanges, Bitcoin miners, gaming platforms, and payment processors looking to reduce idle working capital, avoid forced BTC liquidations, and bridge Bitcoin‑denominated revenue with US dollar‑denominated expenses without relying on unpredictable off‑ramps.

The Lightning Network reached an all-time capacity high in December 2025 of 5,606 BTC amid increased adoption from major crypto exchanges and functionality improvements. Demand has stalled somewhat since then, falling to 5,121 BTC as of Feb. 16.

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A Deutsche Börse Group executive says tokenization is a natural evolution of market infrastructure, not a threat to traditional markets, and said the exchange operator is positioning itself to integrate tokenized and traditional assets.

Carlo Kölzer, head of digital assets at Deutsche Börse and CEO of the group’s trading platform 360T, expressed a bullish outlook on real-world (RWA) asset tokenization, forecasting a future in which digital and traditional markets operate in a closely linked ecosystem.

“Our role as Deutsche Börse Group is not just to build a bridge between two separate worlds, but to create a truly hybrid market,” Kölzer told Cointelegraph, describing the company’s vision for a unified trading environment.

The comments came shortly after 360T integrated Kraken-backed xStocks, a major tokenized equity platform, on Feb. 9, enabling clients to trade tokenized shares of companies such as Nvidia, Google and Circle.

The role of traditional market infrastructures is crucial

“Tokenization enhances capital market flexibility and efficiency, not by making traditional market infrastructures obsolete, but by transforming how they deliver their core functions,” Kölzer said, adding:

“In a tokenized environment, trusted institutions remain essential for risk management, supervision, and ensuring orderly markets, with technology demanding even greater resilience and transparency.”

Deutsche Börse views the shift as a strategic evolution and does not see it as a threat.

“For us, tokenization is an opportunity to pioneer new models and guide the market’s transformation while bringing the same trust and confidence we bring to our markets today,” he said.

Tokenization-linked risks and regulatory concerns

As tokenized assets continue to expand, with the market up roughly 18% year-to-date, some analysts have reiterated concerns around the backing of commodity-based RWAs and stablecoins.

Critics have also pointed to the lack of clear regulatory frameworks across jurisdictions, warning that investor rights and protections may vary depending on structure and venue.

In early February, tokenization platform Securitize warned that the European Union risks falling behind the United States, urging lawmakers to amend the bloc’s DLT Pilot Regime to address restrictive asset scopes and slow regulatory updates.

RWA market valuation by categories (Jan. 1 versus Feb. 18, 2026). Source: App.RWA.xyz

Despite those concerns, Deutsche Börse and 360T remain bullish on tokenization in Europe, citing progress within established regulatory frameworks such as the Markets in Financial Instruments Directive (MiFID).

“We welcome the ongoing work to evolve the initial approach and align it with the market demand to enable growth and accelerate tokenization activities,” Kölzer said, adding that this work will ensure that Europe continues to attract new innovation.

The exec also addressed criticism over “paper Bitcoin,” a term used to describe synthetic or derivative-based exposure to Bitcoin via futures, perpetual swaps, exchange-traded funds and some centralized exchanges.

“This issue highlights the core importance of market integrity and regulated infrastructure,” he said, adding that Deutsche Börse and 360T aim to offer regulated access so clients can gain exposure to assets without uncertainty over trading venues or service providers.

“Our approach remains the same for crypto assets and tokenized products. We aim to provide robust, trusted and fully regulated services,” he added.

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Google searches for “Bitcoin going to zero” have surged to their highest level since the post‑FTX panic in Nov. 2022, according to Google Trends data for the past five years. 

The spike aligns with Bitcoin’s latest drawdown from its Oct. 6, 2025, all‑time high near $126,000 to roughly $66,500 at the time of writing on Thursday, according to data from Coingecko, leaving the asset almost 50% below its peak. 

At the same time, the Bitcoin Fear and Greed Index has plunged into extreme fear around 9, levels previously seen during the Terra ecosystem collapse and the FTX fallout in 2022.

Google Trends shows that worldwide interest in the phrase “Bitcoin going to zero” last hit comparable levels in early November 2022, when FTX froze withdrawals, and Bitcoin (BTC) crashed to around $15,000. 

Google searches for “Bitcoin going to zero.” Source: Google Trends

Today’s Bitcoin fears different from 2022

Crypto intelligence platform Perception analyzed narrative intelligence across 650+ crypto media sources and shared their findings with Cointelegraph. 

Founder Fernando Nikolic said that fear in 2022 was driven by internal events, such as cascading failures of centralized lenders and one of the industry’s largest exchanges, while today’s fear is “driven by macro fears and being amplified by a single bearish voice.”

Nikolic said that Bloomberg’s Mike McGlone has been the loudest single voice driving the “Bitcoin could go to zero (or near-zero)” narrative, and that he has been a “one-man content machine this cycle,” calling Bitcoin to $10,000, saying markets were headed for a 2008-style crash, and continuously calling for Bitcoin’s decline throughout over the past month.

He told Cointelegraph that McGlone is repeatedly amplified by crypto media sites and has “essentially been the go-to bearish quote for the past three weeks.” “This media saturation likely contributes directly to the Google search spike,” he said.

Retail fear lags professional media sentiment 

Meanwhile, Nikolic said that the actual counterpoint that “nobody is synthesizing” is that, while “Bitcoin to zero” searches are spiking, institutional buyers are accumulating more BTC, pointing to the fact that sovereign wealth funds, such as Abu Dhabi, are increasing their Bitcoin exchange-traded fund holdings, and large corporations like Strategy continue to stack BTC.

According to Perception data, he said, media sentiment bottomed on Feb. 5, but has been recovering for two weeks, while Google “Bitcoin going to zero” searches are peaking now in mid-February.

Retail fear lags professional media sentiment by roughly 10-14 days, he said. “By the time the public is most scared, the professional narrative has already started to stabilize. The retail narrative and institutional behavior are moving in opposite directions.”

Macro fears and quantum angst

The surge in “Bitcoin going to zero” searches is also unfolding against a backdrop of record‑high macro anxiety. 

The World Uncertainty Index, which counts references to “uncertainty” in Economist Intelligence Unit country reports, is sitting at its highest level in the Federal Reserve Bank of St. Louis (FRED) time series, exceeding the peaks seen around the 2008 global financial crisis and the 2020 COVID‑19 shock.

World Uncertainty Index. Source: FRED

Research underpinning the index finds that spikes in global uncertainty tend to precede weaker output and slower growth as firms delay investment and hiring. 

Quantum fears have also been a persistent background narrative since October 2025, according to Nikolic, but he said that quantum fear spikes alongside price drops, not independently. 

“Bitcoin quantum” searches peaked in November 2025 and have been falling steadily since, according to Google Trends.

“It’s an amplifier of existing bearish sentiment, not a standalone driver. The “Bitcoin going to zero” search trend is likely a composite of price-crash fear + quantum existential fear + McGlone-style macro doom, all converging in the same window.”

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Blockchain transaction data tied to cryptocurrency payments may provide an early signal of emerging drug crises, according to a new report from blockchain analytics firm Chainalysis.

The study, which examined illicit market activity across darknet drug and fraud ecosystems, found that crypto flows connected to darknet markets reached nearly $2.6 billion in 2025, showing that online drug markets continue to operate at scale despite repeated law-enforcement takedowns. Vendors typically receive payments from personal wallets and centralized exchanges.

Beyond measuring criminal activity, Chainalysis argued that the data can track real-world health outcomes. Crypto payments to suppliers of fentanyl precursor chemicals declined sharply beginning in mid-2023. Months later, overdose deaths also fell in the United States and Canada after peaking in 2023.

According to the report, monitoring transactions linked to precursor suppliers could provide three to six months of advance warning before overdose trends appear in official public-health statistics.

Darknet market flows. Source: Chainalysis

Crypto drug purchases linked to higher hospitalizations

The analysis also compared transaction data with Canadian hospital records. Small payments of less than $500 showed no clear relationship with emergency visits or deaths. Larger transfers were associated with rising stimulant-related hospitalizations and fatalities, suggesting the transactions likely reflect bulk purchasing or redistribution rather than personal consumption.

“Money moves before the crisis hits. People buy drugs before they redistribute them, and users consume them before they overdose and require medical care,” the report said, adding that since blockchain records update instantly, they can serve as a high-fidelity “early warning system.”

Crypto transactions provide an early signal of emerging drug crises. Source: Chainalysis

The report also revealed that following the closure of Abacus Market in July 2025, activity quickly migrated to successor platforms such as TorZon. It said that vendors routinely resupply across platforms and relocate after disruptions.

Related: Moonwell hit by $1.78M exploit as AI vibe coding debate reaches DeFi

Fraud shop volumes drop to $87.5 million

Fraud marketplaces showed a different trend. Onchain volumes fell from about $205 million to $87.5 million year-on-year after infrastructure takedowns, but activity shifted toward wholesale operations, particularly Chinese-language networks operating on Telegram that handle large bulk sales of stolen payment data.

Chainalysis reported Friday that crypto transactions linked to suspected human-trafficking networks rose 85% in 2025, reaching hundreds of millions of dollars. The activity was largely tied to Southeast Asia and closely connected to scam compounds, online casinos and Chinese-language money-laundering groups, per the report.

Magazine: Bitcoin may take 7 years to upgrade to post-quantum — BIP-360 co-author

Key takeaways

Polymarket’s federal lawsuit against Massachusetts could determine whether prediction markets are regulated solely by the CFTC or also by states.

The dispute centers on whether event contracts qualify as financial derivatives under the Commodity Exchange Act or as gambling under state laws.

The lawsuit followed state-level actions against platforms like Kalshi, with Massachusetts and Nevada moving to restrict sports-related prediction contracts.

A ruling in favor of Polymarket could establish uniform national oversight and prevent a patchwork of differing state regulations.

Prediction markets are platforms where people trade contracts based on the outcomes of future events. Recently, they have been in the news due to a major legal battle in the US over regulatory authority. Central to the dispute is Polymarket’s federal lawsuit against Massachusetts. The outcome of this case could determine whether these markets are regulated exclusively at the federal level or whether states can also enforce their own rules.

This article explores Polymarket’s federal lawsuit against Massachusetts. It examines the broader legal clash over whether prediction markets fall under the exclusive authority of the US Commodity Futures Trading Commission (CFTC) or under state gambling laws. It also analyzes how the case could reshape regulatory control, market access and the future of US event-based trading platforms.

A federal lawsuit with broad implications

In February 2026, Polymarket filed suit in the US District Court for the District of Massachusetts to preempt enforcement by state regulators that would require it to comply with Massachusetts gambling laws. The company contends that Congress has granted exclusive authority over “event contracts,” the core products of prediction markets, to the CFTC. According to Polymarket, this renders state efforts to stop or limit its operations unlawful.

Polymarket chief legal officer Neal Kumar argues that the dispute involves national markets and that the relevant legal questions should therefore be resolved in federal court. The company opposes piecemeal enforcement by individual states. He stressed that state shutdown attempts in places like Massachusetts and Nevada would miss an opportunity to help build the markets of tomorrow.

Where it all started: State actions against Kalshi

The lawsuit’s timing was deliberate. It came shortly after Massachusetts courts acted against rival platform Kalshi, blocking sports-related contracts under state gambling laws. A judge upheld a preliminary injunction requiring Kalshi to prevent residents from accessing certain markets without a gaming license. The court directed that these markets be treated as unlicensed sports wagers.

Massachusetts’ approach to prediction markets has received support from similar state-level actions elsewhere. In Nevada, regulators obtained a temporary restraining order against Polymarket’s sports-related offerings, arguing that they violated the state’s sports betting regulatory framework.

Did you know? Corporations have used prediction markets to forecast product launches and internal project deadlines. Some companies quietly rely on employee-based markets because aggregated crowd opinions often outperform traditional executive forecasts.

What is at stake: Federal vs. state authority

The lawsuit centers on a jurisdictional dispute. Polymarket claims its event contracts, whether covering elections, economics or sports, are financial derivatives under the CFTC’s Commodity Exchange Act. In this view, federal law supersedes state gambling statutes, preventing states from independently banning or regulating these markets.

Massachusetts and other states argue that when prediction markets resemble gambling, particularly in the context of sports, they must comply with state gambling frameworks to safeguard consumers and maintain local licensing and age requirements.

If federal courts side with Polymarket, it could strengthen the case for uniform national oversight, preventing a “patchwork” of varying state-level rules or prohibitions. Conversely, upholding state authority would allow states to apply their own gambling laws to platforms operating nationwide.

Did you know? Prediction markets sometimes rival opinion polls in forecasting election outcomes. Universities have studied them for decades as tools for measuring collective intelligence and information efficiency.

Why Polymarket’s lawsuit matters

Prediction markets have experienced growth, with rising trading volumes and visibility. Data tracked by Dune showed that prediction markets recorded about $3.7 billion in trading volume in a single week in January 2026, an all-time high.

As platforms like Polymarket and Kalshi gain mainstream traction, states are pushing to apply protections comparable to those governing traditional gambling. This dynamic has prompted action by multiple states.

The CFTC’s stance has added complexity to the issue. While the federal agency has long regulated derivatives markets, including certain event contracts, it has faced pressure to stay out of specific disputes or to restrict prediction contracts involving war or terrorism.

Did you know? Prediction markets are structured using blockchain smart contracts, automatically settling trades once an outcome is verified. This automation reduces counterparty risk but raises new regulatory and oracle-related challenges.

How jurisdictional disputes are reshaping event contracts

Polymarket’s legal action represents just one element of the broader legal and regulatory disputes surrounding prediction markets across the United States. Courts in jurisdictions such as Massachusetts and Nevada are currently examining the limits of state authority, while federal officials and legislators deliberate over comprehensive guidelines. The outcomes of these proceedings will likely influence how companies structure and offer event contracts.

Whether courts ultimately uphold Polymarket’s federal argument or affirm state authority, the decision will have long-lasting implications for the growth of prediction markets. It will shape user access to these platforms and the balance regulators strike between innovation and consumer protection.

Robinhood’s Ethereum layer-2 network processed four million transactions in its first week of public testnet activity, according to CEO Vlad Tenev.

In a Thursday post on X, Tenev said developers have begun experimenting with applications on the L2 network, which was built for tokenized real-world assets (RWAs) and blockchain-based financial services. “The next chapter of finance runs onchain,” he wrote.

The trading platform launched the Robinhood Chain testnet last week as an Ethereum layer 2 built using Arbitrum technology. The launch followed roughly six months of private testing and is intended to serve as a high-throughput environment for financial applications.

According to the company, the chain is designed to support tokenized equities, exchange-traded funds (ETFs) and other traditional financial instruments. Infrastructure partners include Alchemy, LayerZero and Chainlink.

Related: Tokenized stocks ‘inevitable’ and may stop trading freezes: Robinhood CEO

Robinhood plans mainnet launch this year

A mainnet launch for Robinhood Chain is planned later this year. In the meantime, the testnet will host experimental assets, including stock-style tokens, and tighter connections with the company’s crypto wallet.

The move comes as Robinhood is expanding its crypto footprint beyond trading. The company has already tokenized nearly 500 US stocks and ETFs on Arbitrum as part of a wider real-world asset strategy.

Robinhood reported $1.28 billion in Q4 2025 net revenue, a 27% year-over-year increase but below analyst expectations of $1.34 billion, as crypto income weakened. Revenue from cryptocurrency trading fell 38% to $221 million after a market downturn in October, contributing to a 34% drop in net income to $605 million, even as earnings per share slightly exceeded forecasts.

Related: ARK Invest adds $34M Robinhood stake as Bitcoin falls below $66K

Tokenized real-world assets climb 10% in a month

The tokenized RWA market continues to grow, with about $24.83 billion in assets issued directly on-chain, rising roughly 10% over the past month, according to data from RWA.xyz. The broader category of digitally represented assets now totals around $372.97 billion, while the number of wallets holding tokenized financial products has reached approximately 850,558, up more than 33% in 30 days.

Overview of RWA market. Source: RWA.xyz

Meanwhile, stablecoins hold roughly $296.69 billion in value across 236 million users. Although total stablecoin value slipped slightly over the month, the number of holders continued to rise.

Big Questions: Is China hoarding gold so yuan becomes global reserve instead of USD?

South Korean prosecutors say they have recovered more than 320 Bitcoin that disappeared from government custody in 2025 after the cryptocurrency was returned to an official wallet this week, local media reported.

The Gwangju District Prosecutors’ Office said it unexpectedly recovered 320.88 Bitcoin (BTC) on Tuesday, worth about $21.3 million at the time of writing, local media outlet The Chosun Daily reported Thursday. Prosecutors confirmed to the outlet that the unknown hacker returned the stolen Bitcoin to the authorities’ cryptocurrency wallet on Tuesday, which was later transferred to a secure domestic digital exchange wallet also controlled by authorities.

The Bitcoin went missing from prosecutors’ custody during an investigation in August 2025, authorities said at the time. Prosecutors later discovered the loss during a routine inspection of seized financial assets on Jan. 23, Cointelegraph reported. Authorities blamed the theft on a phishing attack after access credentials were exposed.

While the circumstances are unclear, prosecutors said they had sent cooperation letters to local exchanges requesting that they freeze the hacker’s wallet address, making it difficult to liquidate the stolen assets. They did not explain why the Bitcoin was sent back.

Related: Google Cloud flags North Korea-linked crypto malware campaign

Authorities to continue hunting for hacker

Authorities said they will continue investigating the case to identify the person responsible and examine related phishing sites and malicious domains.

“We will do our best to arrest the suspect regardless of the recovery of the bitcoin,” the prosecutors’ office told local outlet Digital Asset Works.

Authorities are also carrying out additional investigations into phishing site operators and malicious domains related to the case.

Related: South Korean crypto CEO stabbed in court during Haru Invest fraud trial

Custody failures fuel scrutiny

The stolen 320 Bitcoin was recovered about a week after Seoul police saw another 22 Bitcoin (worth $1.5 million at the time) vanish from their custody from a cold wallet held by authorities, Cointelegraph reported on Friday.

Authorities said the 22 BTC was transferred externally, as the physical cold wallet was not stolen.

The revelation led to renewed scrutiny over authorities’ ability to safeguard confiscated Bitcoin. A new investigation has been launched by the Gyeonggi Northern Provincial Police Agency seeking to uncover the individuals involved in the Bitcoin transfer.

The 22 Bitcoin were voluntarily submitted to authorities during an investigation in November 2021.

Magazine: South Korea gets rich from crypto… North Korea gets weapons

The largest shareholders of Bitmine Immersion Technologies (BMNR) stock increased their investments in the leading Ethereum treasury company in the fourth quarter of 2025 despite a wider crypto market crash and poor stock price performance.

Morgan Stanley, the top reported holder, raised its position by about 26% to more than 12.1 million shares, valued at roughly $331 million at quarter end, according to its Form 13F filing with the US Securities and Exchange Commission. ARK Investment Management, the second-largest holder, increased its stake by about 27% to more than 9.4 million shares worth roughly $256 million, its filing shows.

Morgan Stanley BMNR share holdings during 2025, 13F-HR filing. Source: 13f.info

Several other top institutional holders also increased exposure. BlackRock increased its BMNR holdings by 166%, Goldman Sachs by 588%, Vanguard by 66%, and the Bank of America by a whopping 1,668%.

Wall Street adds BMNR exposure despite 48% stock slide

Each of the top 11 largest shareholders has increased exposure to BMNR during Q4 of 2025, including Charles Schwab, Van Eck, Royal Bank of Canada, Citigroup and the Bank of New York Mellon Corporation, according to official filings compiled by crypto investor Collin.

Source: Collin

The accumulation came despite a sharp drop in BitMine’s share price. BMNR fell about 48% in the fourth quarter of 2025 and about 60% over the past six months, and traded near $19.90 in premarket action Thursday, according to Google Finance.

BMNR stock price, six-month chart. Source: Google Finance

Institutional investments keep Bitmine mNAV above water

The continued institutional investments are bringing more capital to support Bitmine’s operations and continued Ether (ETH) purchases.

The company’s financing flexibility is closely watched through its market net asset value, or mNAV, a ratio that compares a company’s enterprise value to the value of its crypto holdings.

An mNAV below 1 can make it harder for companies to raise capital by issuing new shares, potentially limiting additional cryptocurrency purchases. Data tracked by Bitmine monitoring services indicated the firm’s mNAV remained above 1, supported in part by continued institutional ownership.

Related: BitMine nears $7B in unrealized losses as Ether downturn pressures treasury firms

Bitmine continues to expand its Ether holdings amid the market downturn. It purchased 45,759 Ether for around $260 million during the past week, at an average cost basis of 1,992 per ETH.

BitMine is the largest corporate Ether holder, with 4.37 million Ether worth around $8.69 billion on its books, according to data from the StrategicEthReserve.

Magazine: Sharplink exec shocked by level of BTC and ETH ETF hodling — Joseph Chalom

Bitcoin-backed loan platform Ledn has sold about $188 million of bonds tied to Bitcoin‑collateralized consumer loans into the mainstream asset‑backed securities (ABS) market, Bloomberg reported on Wednesday, citing people familiar with the matter. 

In a first-of-its-kind deal, one of the two tranches — the investment‑grade portion —reportedly priced at a spread of roughly 335 basis points over a benchmark rate, implying that investors are demanding 3.35 percentage points in extra yield to hold crypto‑linked credit risk rather than conventional consumer ABS.

The deal is structured through Ledn Issuer Trust 2026‑1, which securitizes a pool of 5,441 short‑term, fixed‑rate balloon loans extended to 2,914 US borrowers, backed by 4,078.87 Bitcoin (BTC) held as collateral, according to S&P Global Ratings’ preliminary documentation on Feb. 9.

How the structure and ratings stack up

Balloon loans are structured with relatively small periodic payments and a large lump‑sum “balloon” payment at maturity, which keeps near‑term payments low but leaves a sizeable principal balance due at the end.

S&P assigned preliminary BBB‑ (sf) and B‑ (sf) ratings to the $160 million senior Class A notes and $28 million subordinated Class B notes, respectively.

A BBB- rating is the lowest tier of investment-grade debt, reflecting an adequate capacity to meet financial commitments but higher vulnerability to adverse conditions than higher‑rated bonds, while B‑ sits in deep non‑investment‑grade “junk” territory, where default risk is materially higher.

Jefferies Financial Group acted as the sole structuring agent and bookrunner, as a major Wall Street dealer intermediated between institutional fixed‑income investors and this new form of crypto‑linked exposure. 

BTC increasingly seen as legitimate collateral

Bitwise head of research Europe, Andre Dragosch, told Cointelegraph that the fact that Ledn was able to package these loans into a traditional ABS implied that BTC is “increasingly seen as safe and legit collateral by traditional financial institutions.”

He highlighted major banks like JPMorgan offering BTC-backed loans to customers as a further indication of this. “Bitcoin is increasingly being integrated into traditional finance as the new pristine collateral,” he said.

Jinsol Bok, research lead at Four Pillars global crypto research firm, told Cointelegraph that this means liquidity no longer needs to remain locked up and “can instead be expanded into new lending,” meaning that the size of the BTC collateralized lending market could “grow far beyond its current level in the future.”

He added that, unlike real estate mortgages, BTC collateralized loans could be transparently tracked onchain and liquidated in a programmable manner.

“For this reason, I believe that the risks associated with ABS in this context do not need to be excessively overstated."

What investors are buying

Asset‑backed securities are bonds funded by pools of loans, so investors in Ledn’s notes do not own Bitcoin (BTC) directly.

Instead, they take on credit and structural risk to a pool of BTC‑secured loans whose performance depends on borrower repayments and the lender’s ability to liquidate collateral during market stress.

“These loans generally have a low default rate because they tend to have low LTV [loan-to-value] ratios and are well capitalized with BTC,” Dragosch said.

Founded in 2018, Ledn says it has funded over $9.5 billion in loans so far in over 100 countries. The company received a strategic investment from Tether, the issuer of the USDt (USDT) stablecoin, in November 2025.

Strategic investment from Tether. Source: Ledn.

Cointelegraph reached out to Ledn for comment but had not received a response by publication time.

Big questions: Should you sell your Bitcoin for nickels for a 43% profit?

US-listed spot Bitcoin exchange-traded funds (ETFs) continued to bleed on Wednesday as market sentiment remained negative and BTC briefly dipped below $66,000.

Spot Bitcoin ETFs recorded $133.3 million in net outflows on Wednesday, bringing weekly losses to $238 million, according to SoSoValue data. BlackRock’s iShares Bitcoin Trust (IBIT) led outflows, with over $84 million exiting the fund.

Trading volumes remained subdued, falling below $3 billion, highlighting the persistent lack of activity even as analysts previously noted potential inflection points amid the slowdown in outflows.

Weekly flows in US spot Bitcoin ETFs in 2026. Source: SoSoValue

If the ETFs fail to recover in Thursday and Friday sessions, this week could mark the first five-week outflow streak for Bitcoin (BTC) ETFs since March of last year.

Year-to-date, Bitcoin ETFs have seen about $2.5 billion in outflows, leaving assets under management at $83.6 billion.

Solana ETFs keep bucking the trend after launch in late 2025

While Ether (ETH) and XRP (XRP) ETFs posted modest daily outflows of $41.8 million and $2.2 million, respectively, Solana (SOL) funds continued to buck the trend.

Solana ETFs have recorded a six-day streak of inflows, with year-to-date gains totaling around $113 million. Trading activity, however, remains subdued compared with past months, as February inflows of $9 million so far are well below $105 million in January and December 2025’s $148 million.

Weekly flows in US spot Solana ETFs in 2026. Source: SoSoValue

Since their October 2025 launch, US spot Solana ETFs have accumulated nearly $700 million in assets under management, trailing XRP funds, which have amassed $1 billion since their November debut.

Crypto market remains in extreme fear, BTC down 24% year-to-date

The ongoing sell-off in Bitcoin ETFs comes as the Crypto Fear & Greed Index continues to signal persistent negative sentiment.

Even though Bitcoin has slightly recovered from multi-month lows near $60,000 logged in early February, the index has largely remained in “Extreme Fear” territory.

The Crypto Fear & Greed Index. Source: Alternative.me

At the time of writing, Bitcoin traded at $67,058 on Coinbase, down about 24% year-to-date. Analysts at major financial institutions, including Standard Chartered, have predicted that BTC could fall as low as $50,000 before potentially recovering to $100,000 later in 2026.

According to the crypto analytics platform CryptoQuant, Bitcoin’s short-term Sharpe ratio has reached levels historically associated with “generational buying zones.”

“The arrows in the chart illustrate this clearly: each prior extreme negative reading was followed by violent recoveries to new highs,” CryptoQuant analyst Ignacio Moreno De Vicente said.

Magazine: Did a Hong Kong fund kill Bitcoin? Bithumb’s ‘phantom’ BTC: Asia Express

Key takeaways

Address poisoning exploits behavior, not private keys. Attackers manipulate transaction history and rely on users mistakenly copying a malicious lookalike address.

Cases such as the 50-million-USDT loss in 2025 and the 3.5 wBTC drain in February 2026 demonstrate how simple interface deception can lead to massive financial damage.

Copy buttons, visible transaction history and unfiltered dust transfers make poisoned addresses appear trustworthy within wallet interfaces.

Because blockchains are permissionless, anyone can send tokens to any address. Wallets typically display all transactions, including spam, which attackers use to plant malicious entries.

Most crypto users believe that their funds stay secure as long as their private keys are protected. However, as a rising number of scams show, this is not always the case. Scammers have been using an insidious tactic, address poisoning, to steal assets without ever accessing the victim’s private key.

In February 2026, a phishing scheme targeted a Phantom Chat feature. Using an address poisoning tactic, attackers successfully drained roughly 3.5 Wrapped Bitcoin (wBTC), worth more than $264,000.

In 2025, a victim lost $50 million in Tether’s USDt (USDT) after copying a poisoned address. Such incidents have highlighted how poor interface design and everyday user habits can result in massive losses.

Prominent crypto figures like Binance co-founder Changpeng “CZ” Zhao have publicly urged wallets to add stronger safeguards following address poisoning incidents.

This article explains how address poisoning scams exploit user behavior rather than private key theft. It details how attackers manipulate transaction history, why the tactic succeeds on transparent blockchains and what practical steps users and wallet developers can take to reduce the risk.

What address poisoning really involves

Unlike traditional hacks that target private keys or exploit code flaws, address poisoning manipulates a user’s transaction history to deceive them into sending funds to the wrong address.

Usually, the attack proceeds in the following way:

Scammers identify high-value wallets via public blockchain data.

They create a wallet address that closely resembles one the victim often uses. For example, the attacker may match the first and last few characters.

They send a small or zero-value transaction to the victim’s wallet from this fake address.

They rely on the victim copying the attacker’s address from their recent transaction list later.

They collect the funds when the victim accidentally pastes and sends them to the malicious address.

The victim’s wallet and private keys remain untouched, and blockchain cryptography stays unbroken. The scam thrives purely on human error and trust in familiar patterns.

Did you know? Address poisoning scams surged alongside the rise of Ethereum layer-2 networks, where lower fees make it cheaper for attackers to mass-send dust transactions to thousands of wallets at once.

How attackers craft deceptive addresses

Crypto addresses are lengthy hexadecimal strings, often 42 characters on Ethereum-compatible chains. Wallets usually show only a truncated version, such as “0x85c...4b7,” which scammers take advantage of. Fake addresses have identical beginnings and endings, while the middle portion differs.

Legitimate address (example format):

0x742d35Cc6634C0532925a3b844Bc454e4438f44e

Poisoned lookalike address:

0x742d35Cc6634C0532925a3b844Bc454e4438f4Ae

Scammers use vanity address generators to craft these near-identical strings. The fake one appears in the victim’s transaction history thanks to the dusting transfer. To users, it looks trustworthy at a glance, especially since they rarely verify the full address string.

Did you know? Some blockchain explorers now automatically label suspicious dusting transactions, helping users spot potential poisoning attempts before interacting with their transaction history.

Why this scam succeeds so well

There are several intertwined factors that make address poisoning devastatingly effective:

Human limitations in handling long strings: Because addresses are not human-friendly, users rely on quick visual checks at the beginning and end. Scammers exploit this tendency.

Convenient but risky wallet features: Many wallets offer easy copy buttons next to recent transactions. While this feature is helpful for legitimate use, it becomes risky when spam entries sneak in. Investigators such as ZachXBT have pointed to cases where victims copied poisoned addresses directly from their wallet UI.

3. No need for technical exploits: Because blockchains are public and permissionless, anyone can send tokens to any address. Wallets usually display all incoming transactions, including spam, and users tend to trust their own history.

The vulnerability lies in behavior and UX, not in encryption or key security.

Why keys aren’t enough protection

Private keys control authorization, meaning they ensure only you can sign transactions. However, they cannot verify whether the destination address is correct. Blockchain’s core traits — permissionless access, irreversibility of transactions and trust minimization — mean malicious transactions get permanently recorded.

In these scams, the user willingly signs the transfer. The system functions exactly as designed, and the flaw lies in human judgment.

Underlying psychological and design issues involve:

Routine habits: People tend to repeatedly send funds to the same addresses, so they copy from their transaction history instead of reentering addresses.

Cognitive strain: Transactions involve multiple steps, such as addresses, fees, networks and approvals. Many users find scrutinizing every character tedious.

Truncated displays: Wallet UIs hide most of the address, leading to partial checks.

Did you know? In certain cases, attackers automate address lookalike generation using GPU-powered vanity tools, allowing them to produce thousands of near-identical wallet addresses within minutes.

Practical ways to stay safer

While address poisoning exploits user behavior rather than technical vulnerabilities, small changes in transaction habits can significantly reduce the risk. Understanding a few practical safety measures can help crypto users avoid costly mistakes without requiring advanced technical knowledge.

For users

Simple verification habits and transaction discipline can significantly reduce your chances of falling victim to address poisoning scams.

Build and use a verified address book or whitelist for frequent recipients.

Verify the full address. Use a checker or compare it character by character before making payments.

Never copy addresses from recent transaction history. Instead, reenter addresses or use bookmarks.

Ignore or report unsolicited small transfers as potential poisoning attempts.

For wallet developers

Thoughtful interface design and built-in safeguards can minimize user error and make address poisoning attacks far less effective.

Filtering or hiding low-value spam transactions

Similarity detection for recipient addresses

Pre-signing simulations and risk warnings

Built-in poisoned address checks via onchain queries or shared blacklists.

The Ethereum Foundation has announced it is targeting faster transactions, smarter wallets, better cross-chain transactions and quantum security measures as its “protocol priorities” in 2026.

In a statement published on Wednesday, the Ethereum Foundation outlined several goals, including continuing to scale the gas limit — the maximum amount of computational work a block can handle — “toward and beyond” 100 million, which has been a major topic of discussion among the Ethereum community in 2025. 

Source: Ethereum Foundation

Some Ethereum community members anticipate that the gas limit will increase significantly this year. In November 2025, Ethereum educator Anthony Sassano said that the goal of significantly increasing Ethereum’s gas limit to 180 million in 2026 is a baseline rather than a best-case scenario. 

“Post-quantum readiness” is a focus for Ethereum

The foundation pointed to the Glamsterdam network upgrade, set for the first half of 2026, as a major priority. It also emphasized “post-quantum readiness” in its trillion-dollar security initiative as a priority.

On Jan. 24, Ethereum researcher Justin Drake said in an X post that the foundation had “formed a new Post-Quantum (PQ) team.” 

“Today marks an inflection in the Ethereum Foundation's long-term quantum strategy,” Drake said.

The Ethereum Foundation said it will also focus on improving user experience in 2026, with an emphasis on enhancing smart wallets through native account abstraction and enabling smoother interactions between blockchains via interoperability.

“The goal remains seamless, trust-minimized cross-L2 interactions, and we're getting closer day by day. Continued progress on faster L1 confirmations and shorter L2 settlement times directly supports this.”

The foundation said that 2025 was one of the “most productive years,” citing two major network upgrades, Pectra and Fusaka, and the community raising the gas limit from 30 million to 60 million between the upgrades, for the first time since 2021.

Buterin’s big plans for Ethereum and AI

Ethereum Foundation’s Mario Havel said in an X post on Wednesday that, “It took us a while to push out the announcement because we were preparing the biggest curriculum so far.” 

It comes just days after Ethereum co-founder Vitalik Buterin shared his latest vision for Ethereum’s intersection with artificial intelligence on Feb. 10. Buterin explained that he sees the two working together to improve markets, financial safety, and human agency.  

Buterin said his broader vision for the future of AI is to empower humans rather than replace them, though he said the short term involves much more “ordinary” ideas.

Magazine: Is China hoarding gold so yuan becomes global reserve instead of USD?

Trump family-owned Mar-a-Lago was home to traditional finance giants, US government officials and crypto executives in a crypto forum on Wednesday, hosted by the family’s sprawling crypto company.

Coinbase CEO Brian Armstrong and Binance co-founder Changpeng Zhao, who Donald Trump pardoned last year, were at the exclusive World Liberty Forum event alongside Goldman Sachs CEO David Solomon and the heads of the Nasdaq and New York Stock Exchange.

The event saw traditional finance executives and US regulators embrace crypto, with Solomon, a long-time crypto skeptic, saying on stage that he now owns “a little Bitcoin, very little,” according to one of the attendees.

Donald Trump Jr. (left) and Eric Trump (middle) appeared on stage at World Liberty Financial’s event in Mar-a-Lago, Florida. Source: Richard Sieler

“The great irony is this whole world has gone full circle,” Bloomberg reported Eric Trump as saying at the event.

“There’s people in this room that were probably on the opposite side of us, that were canceling bank accounts for us, that were kicking us out of their big banks for no reason other than the fact that my father was wearing a hat that said, ‘Make America Great Again.’”

Commodity Futures Trading Commission chair Mike Selig, the head of an agency that is pushing to regulate the crypto industry, was also in attendance, along with Republican senators Ashley Moody and Bernie Moreno.

World Liberty announces tokenization tie-up for Trump hotel

World Liberty announced at the event that it has partnered with tokenization firm Securitize, with plans to tokenize loan revenue interests in an upcoming Trump-branded resort in the Maldives.

The company said it was part of a “broader strategy to design, structure, and distribute [World Liberty]-branded tokenized real-world asset offerings.”

The Trump Organization said in November that it would tokenize the development of the project, which is being built by real estate developer DarGlobal. The resort is set to be completed in 2030 and feature 100 luxury villas.

World Liberty said that the offering will give investors “both a fixed yield and loan revenue streams” from the resort, giving exposure to “both potential income distributions and the potential for certain profits upon any future sale.”

It added that the offering is only available to eligible accredited investors in the US and would be accessed via “select third-party partners and wallets.”

Big Questions: Is China hoarding gold so yuan becomes global reserve instead of USD?

United States Federal Reserve policymakers discussed the possibility of interest rate increases last month, according to newly released comments from a January meeting.

The minutes of the Federal Open Market Committee meeting from late January were released on Wednesday, revealing that some policymakers were mulling a rate hike due to stubbornly high inflation. 

Several participants indicated that they would support “the possibility that upward adjustments to the target range for the federal funds rate could be appropriate if inflation remains at above-target levels,” the minutes stated. 

Central bank policymakers voted to keep interest rates unchanged at 3.5% to 3.75% at their January meeting after cutting rates three times at the end of 2025, from 4.5% to current levels.

If enacted, it would be the first rate hike since July 2023. However, CME futures markets indicate a 94% probability that rates will remain unchanged at the Fed’s next meeting on March 18. 

The Federal Reserve has two primary mandates for its policy on rates: inflation and the labor market. 

The Fed has been cutting rates since September 2024. Source: Trading Economics 

High inflation concerns persist 

The minutes also revealed that there is a significant “hawkish” contingent that is not yet ready to commit to further cuts. 

Some participants commented that it would likely be appropriate to “hold the policy rate steady for some time” to give them more time to assess economic data. 

However, a number of these participants judged that “additional policy easing may not be warranted until there was a clear indication that the progress of disinflation was firmly back on track.”

Related: Why Bitcoin has recently reacted more to liquidity conditions than to rate cuts

Most participants cautioned that progress toward the 2% inflation objective “might be slower and more uneven than generally expected,” judging that there was a meaningful risk of it remaining above the target. 

If inflation were to decline in line with expectations, rate reductions “would likely be appropriate,” the minutes stated.  

US inflation as measured by the Consumer Price Index (CPI) is currently 2.4%, having increased 0.2% in January, according to the Bureau of Labor Statistics.  

Current inflation remains above the Fed’s target. Source: BLS

Rate hikes are typically bad for crypto prices

Higher rates are generally bearish for high-risk assets such as crypto, as safer assets like Treasury bonds or cash offer better returns with no risk. 

Higher rates also make borrowing more expensive, which reduces speculative activity, leverage, and venture capital investments. 

Crypto market sentiment, which is already at rock bottom, could also be further hit by a hawkish Federal Reserve. 

Magazine: Chinese New Year boosts interest, TradFi buying crypto exchanges: Asia Express

The US CLARITY Act, a highly anticipated bill aimed at providing greater clarity for the US crypto industry, could make it through Congress in just over a month, according to crypto-friendly US Senator Bernie Moreno.

“Hopefully by April,” Moreno told CNBC during an interview at US President Donald Trump’s Mar-a-Lago property in Florida on Wednesday.

Coinbase CEO Brian Armstrong joined Moreno for the interview, explaining that they were with representatives from the crypto, banking and US Congress at the World Liberty Financial (WLF) crypto forum to reach a solution on market structure.

“A path forward” is in sight, says Moreno

“One of the big issues that did come up in the past was this idea of stablecoins on rewards,” Armstrong said. The banking industry previously raised concerns that offering stablecoin yields could undermine traditional banking and cause deposits and interest to move away from banks.

While Armstrong had issues with the draft bill and withdrew his support for the CLARITY Act in January, he said there is “now a path forward, where we can get a win-win-win outcome here.”

Brian Armstrong and Bernie Moreno joined CNBC on Wednesday. Source: CNBC

“A win for the crypto industry, a win for the banks, and a win for the American consumer to get President Trump’s crypto agenda through to the finish line, so we can make America the crypto capital of the world,” Armstrong said. 

Armstrong said the crypto exchange previously couldn’t support the bill because it includes provisions that ban interest-bearing stablecoins and position the US Securities and Exchange Commission (SEC) as the primary regulator of the crypto industry. The White House was reportedly disappointed by Coinbase’s decision to withdraw its support, describing the move as a “unilateral” action that blindsided administration officials.

Moreno admitted that the delay stems from “getting hung up” on the stablecoin rewards, which he said “shouldn’t be part of this equation.”

Crypto prediction platform Polymarket's odds of the US CLARITY Act passing in 2026 briefly surged to 90% on Wednesday before falling to 72% at the time of publication.

Moreno shuts down idea of a Democrat-led midterm election

Meanwhile, Moreno dismissed the idea that a Democratic takeover of Congress could threaten the bill when asked. “The house isn’t going to go Democrat, and neither is the Senate,” Moreno said.

“The American people are sick and tired of open borders; that is why we got elected. They were sick and tired of high inflation, and they were sick and tired of an out-of-control government,” he added. 

On Dec. 19, White House crypto and AI czar David Sacks voiced strong confidence that the bill would pass early this year.

“We are closer than ever to passing the landmark crypto market structure legislation that President Trump has called for. We look forward to finishing the job in January,” Sacks said at the time.

Magazine: Bitcoin may take 7 years to upgrade to post-quantum: BIP-360 co-author

Three researchers at the US Federal Reserve argue that prediction market Kalshi can better measure macroeconomic expectations in real time than existing solutions and thus should be incorporated into the Fed’s decision-making process.

The “Kalshi and the Rise of Macro Markets” paper was released on Feb. 12 by Federal Reserve Board principal economist Anthony Diercks, Federal Reserve research assistant Jared Dean Katz and Johns Hopkins research associate Jonathan Wright.

Kalshi data was compared with traditional surveys and market-implied forecasts to examine how beliefs about future economic outcomes change in response to macroeconomic news and statements from policymakers.

Source: Tarek Mansour

“Managing expectations is central to modern macroeconomic policy. Yet the tools that are often relied upon—surveys and financial derivatives—have many drawbacks,” the researchers said, adding that Kalshi can capture the market’s “beliefs directly and in real time.”

“Kalshi markets provide a high-frequency, continuously updated, distributionally rich benchmark that is valuable to both researchers and policymakers.”

Kalshi traders can bet on a range of markets tied to the Federal Reserve’s decision-making, including consumer price index inflation and payroll, in addition to other macroeconomic outcomes such as gross domestic product growth and gas prices.

The Fed researchers said Kalshi data should be used to provide a risk-neutral probability density function, which shows all possible outcomes of Fed interest rate decisions and how likely each one is. 

“Overall, we argue that Kalshi should be used to provide risk-neutral [probability density functions] concerning FOMC decisions at specific meetings” arguing that the current benchmark is “too far removed from the monetary policy interest rate decision.”

However, Fed research papers are only “preliminary materials circulated to stimulate discussion” and do not impact the central bank’s decision-making.

Prediction markets became one of the hottest use cases in crypto last year and have consistently surpassed $10 billion in monthly trading volume. Kalshi and competitor platform Polymarket have been aggressively marketing their products to retail users in recent months despite some state regulators seeking to restrict the industry.

Kalshi is more reactive than existing expectations tools

The Federal Reserve noted one advantage Kalshi has in examining macroeconomic expectations is its “rich intraday dynamics.”

Related: Treasury bills seen as primary driver of Bitcoin's price: Report 

“These probabilities respond sharply and sensibly to major developments,” the researchers said, pointing out an example where the implied probability of a rate cut in July rose to 25% following remarks from Federal Reserve Governors Christopher Waller and Michelle Bowman before falling after a stronger-than-expected June employment report.

“Kalshi provides the fastest-updating distributions currently available for many key macroeconomic indicators,” the researchers added.

Magazine: Brandt says Bitcoin yet to bottom, Polymarket sees hope: Trade Secrets

Senate Banking Committee ranking member Elizabeth Warren has reportedly sent a letter to Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell urging them not to bail out “cryptocurrency billionaires” with taxpayer dollars. 

Warren warned that any potential bailout “would be deeply unpopular to transfer wealth from American taxpayers to cryptocurrency billionaires,” adding that it could also “directly enrich President Trump and his family’s cryptocurrency company, World Liberty Financial, according to CNBC.

The letter comes as Bitcoin (BTC) prices have fallen more than 50% from their all-time high in October, hitting a local low of $60,000 on Feb. 6.

The letter also came on the same day that World Liberty Financial hosted its first “World Liberty Forum” for crypto executives and pro-industry policymakers at the President’s private Mar-a-Lago club in Palm Beach, Florida.

The US government is retaining seized Bitcoin  

Senator Warren also referenced the Annual Report of the Financial Stability Oversight Council hearing on Feb. 4, during which Secretary Bessent was asked about his authority to bail out the crypto industry.

During the hearing, Congressman Brad Sherman asked Bessent if the Treasury Department “has the authority to bail out Bitcoin?” or instruct banks to buy Bitcoin or Trumpcoin (TRUMP). 

A bemused Bessent asked for clarification on the question, stating that “within the context of asset diversification within banks, they could hold many assets.”

Related: Senators ask Bessent to probe $500M UAE stake in Trump-linked WLFI

Sherman also expressed concern that US tax dollars might be invested in crypto assets. “Why would a private bank be your tax dollars?” asked the Treasury secretary.

Bessent confirmed that “we are retaining seized Bitcoin,” which is not tax money, but an “asset of the US government.”  

Senator Warren claims response was “deflection”

Warren saw the exchange differently, stating in her letter that Bessent “deflected.” 

“It’s deeply unclear what, if any, plans the US government currently has to intervene in the current Bitcoin selloff,” she wrote. 

“Ultimately, any government intervention to stabilize Bitcoin would disproportionately benefit crypto billionaires.” 

“Your agencies must refrain from propping up Bitcoin and transferring wealth from taxpayers to crypto billionaires through direct purchases, guarantees, or liquidity facilities,” the letter reportedly stated. 

Cointelegraph reached out to Elizabeth Warren and the Treasury for comment, but did not receive an immediate response. A Federal Reserve spokesman confirmed they had received the letter but declined to comment. 

Magazine: Chinese New Year boosts interest, TradFi buying crypto exchanges: Asia Express

The Aptos Foundation is looking to propose a significant shakeup to the dynamics of the Aptos token, announcing a host of potential policy changes designed to spur greater APT deflation.  

In an X post on Wednesday, the Aptos Foundation said it would submit several governance proposals to help transition the ecosystem away from its current subsidy-based emission format to something focused more on “performance-driven mechanisms” and decreasing APT supply. 

“The Aptos network is transitioning to performance-driven tokenomics designed to align supply mechanics with network utilization,” the Aptos Foundation said, adding:

“This update replaces bootstrap-era subsidy with mechanisms tied to transaction activity, establishing a framework where burns can exceed emissions as high-throughput applications scale.” 

Source: Aptos

One of the foundation’s proposals is to set a hard cap at 2.1 billion tokens, as APT currently does not have a maximum cap on the total supply. The team said there are currently 1.196 billion APT in circulation.

Under the current emission structure, new tokens are continuously minted to support the ecosystem by funding things like development, grants, and staking rewards. 

Meanwhile, significant token unlocks have been hanging over the ecosystem. 

However, the Aptos Foundation said that this specific pressure has been easing and will continue to decline after the next major four-year token unlock cycle ends in October, stating that it will result in a 60% reduction in annualized supply unlocks. 

The team said that as the ecosystem has matured to the point where big institutions such as BlackRock, Franklin Templeton, and Apollo are now deploying “hundreds of millions onchain,” APT tokenomics need to become more sustainable. 

“Without reform, emissions continue indefinitely with no hard ceiling, no performance requirements, and no connection between issuance and network activity,” the team said. 

Key proposals and policy changes afoot 

Alongside the hard 2.1 billion supply cap, the proposed policy changes include a reduction of the annual staking rewards rate from 5.19% to 2.6%, alongside increasing rewards for “longer staking commitments.” 

The Aptos Foundation said this would result in reduced overall staking emissions while also rewarding long-term participants. 

Elsewhere, the team is pushing for a 10-fold increase in gas fees, arguing that there is room to do this given how cheap it is to use the network. As gas fees paid in APT are burned, this would also help reduce emissions. 

Related: Coinbase's Base transitions to its own architecture with eye on streamlining

“Even with a 10X increase, stablecoin transfers would still be the lowest in the world at around $0.00014, making it the ideal blockchain for stablecoins, payments, and any other similar high-volume transactions,” the team said.

The Aptos Foundation also proposed permanently locking 210 million APT tokens for staking on the network. The team said this would be “functionally equivalent to a token burn” and will use the rewards to fund foundation operations. 

The team also said it will change its grants policy and enact stricter KPIs to ensure greater performance before issuing tokens. Finally, the foundation will also explore a token buyback program or APT reserve to help balance supply.

The Aptos Foundation is not alone in seeking major shakeups to native token dynamics. In January, the Optimism governance community approved a proposal from its foundation to initiate a buyback program using 50% of Superchain revenue. 

Meanwhile, decentralized exchange Uniswap saw a significant token burn approved in December, and PancakeSwap’s community also approved a supply-reducing proposal last month.

Magazine: Bitcoin’s ‘biggest bull catalyst’ would be Saylor’s liquidation: Santiment founder

Crypto industry executives at Cointelegraph’s LONGITUDE conference in Hong Kong stressed the importance of addressing Bitcoin’s technological risks and said that clear US regulations can’t come soon enough.

Co-hosted by crypto exchange OneBullEx, the Feb. 12 event opened with a fireside chat featuring Tron founder Justin Sun, who discussed what the industry needs to prioritize — including preparing for artificial general intelligence (AGI) — which many expect to arrive within the next few years.

“We need to create a very easy standard for AGI to use blockchain,” Sun said.

Tron founder Justin Sun shared his optimism about the industry’s future. Source: Cointelegraph

Sun’s fireside chat was followed by three panel discussions covering the quantum computing threat to Bitcoin, the potential impact of the US CLARITY Act on the industry, and the progress of crypto infrastructure toward a trillion-dollar scale.

Despite a volatile crypto market at the end of 2025, industry players expressed optimism about the industry’s future.

Bitcoiners should ‘discount the value’ until quantum solve

Quantum computing, which some in the Bitcoin community see as a serious potential threat, sparked a debate among panelists.

Capriole Investments founder Charles Edwards said the risk should be priced into Bitcoin until the asset becomes quantum-resistant.

“Today, you kind of have to start to discount the value of Bitcoin based on that risk until it’s solved,” Edwards said. He pointed to growing fears about quantum computing as a primary reason Bitcoin’s price ended the year lower than it started.

Charles Edwards (Capriole Investments), John Lilic (NeverLocal), Matthew Roszak (Hemi), and Akshat Vaidya (Maelstrom) shared their thoughts on quantum computing’s threat to Bitcoin. Source: Cointelegraph

“If you just look at the data, 2025 should have been a great year for Bitcoin,” Edwards said, explaining that quantum became a “non-zero threat” and US-based Bitcoin ETF issuers began adding risk disclaimers for quantum.

Meanwhile, Matthew Roszak, Bloq chairman and Hemi co-founder, wasn’t as worried about how it might play out:

“To look at this as a movie trailer and what's ahead for Bitcoin and quantum. Just the preview here. It's a two-step process. We're going to upgrade and chill. That's it. That's the process.”

Maelstrom managing partner and co-founder Akshat Vaidya admitted that quantum is an “existential threat,” but it will be met with a “coordinated response that’s proportionate.”

US CLARITY Act will be significant for the industry

White House crypto and AI czar David Sacks said in December that the US is “closer than ever” to passing the US CLARITY Act, which aims to provide the industry with clearer regulations.

Although the bill hasn’t passed, industry panelists agreed that the US has become noticeably more friendly toward crypto since President Donald Trump took office.

 Henri Arslanian (Nine Blocks Capital Management) led a panel on the US CLARITY Act, consisting of Craig Salm (Grayscale), Brian Mehler (Stable), Graham Ferguson (Securitize), Sonia Shaw (OneAsset), and Sean McHugh (VARA). Source: Cointelegraph

Sean McHugh, senior director at Dubai’s Virtual Assets Regulatory Authority, who previously worked in TradFi in the US, said one of the main reasons he moved to Dubai was its more crypto-friendly regulatory environment than the US.

“I think one of the reasons why I moved to Dubai is because, you know, they were committed to clarity when I left a year and a half ago,” McHugh said, adding:

“The US was in a very different place than it is now.”

Grayscale Investments’ chief legal officer, Craig Salm, pointed to past conflicts over crypto between the two US financial regulators during the Joe Biden administration. 

“There used to be this whole turf war between the SEC and the CFTC,” Salm said, adding:

“Your regulator fighting over jurisdiction just isn’t productive for anybody.”

Salm also noted that the environment has changed. Instead of clashing, the SEC and CFTC are meeting together and coordinating to bring much-needed clarity to the asset class.

“Which is exactly what I think we all need,” Salm said.

Doubts over crypto infrastructure readiness for big flows

When asked whether crypto infrastructure is ready to handle trillion-dollar institutional flows, the panelists expressed some doubts.

“I would say probably not yet,” Offchain Labs chief strategy officer A.J. Warner said.

A.J. Warner (Offchain Labs), Joanita Titan (Monad Foundation), Austin Federa (DoubleZero) and Isroil Shafiev (OneBullEx) explored the infrastructure required for global adoption, institutional-grade use cases, and RWAs. Source: Cointelegraph

Monad Foundation head of institutional growth, Joanita Titan, echoed Warner’s sentiment. “Billion-dollar payments or billion-dollar processing is not a problem, but trillion dollars, I don't think we're there yet,” she said.

Warner argued that the largest bottlenecks are “continuing to scale, resiliency of networks, and user experiences.”

Cointelegraph’s exclusive LONGITUDE events will continue in 2026, with editions planned for New York, Paris, Dubai, Singapore and Abu Dhabi.