Byron Gilliam

This is a segment from The Breakdown newsletter. To read full editions, <a href="https://blockworks.co/brand/the-breakdown" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;I don&#8217;t see it as a bad thing, this process that they call &#8216;dollarization’&#8230; Thank god it exists.”



— Nicolás Maduro
</blockquote>



The New York Times recently <a href="https://www.nytimes.com/2025/10/26/world/americas/trump-maduro-venezuela-economy.html">reported</a> that Venezuela had become “the first nation to manage a large share of its finances in crypto.”&nbsp;



Not by choice, though.&nbsp;



Roughly half of Venezuela’s revenue comes from oil sales denominated in dollars, which Venezuela, being a sanctioned country, cannot legally send or receive.&nbsp;



Previously, sanctioned governments would sell their oil for dollars through a web of shell companies and offshore banks — or barter their oil in return for goods or infrastructure investments.



Now, they have an easier option: Accept payment in stablecoins. Economist Asdrúbal Oliveros <a href="https://www.youtube.com/watch?v=7vp2v8fKXJg&amp;t=279s">estimates</a> that Tether’s USDT stablecoin is the means of exchange for roughly 80% of Venezuela&#8217;s oil sales. The government once banned transacting in stablecoins, which it viewed as a threat to the bolivar. But the crippling effects of US sanctions left Venezuela little choice but to embrace them.



Delcy Rodriguez, now the interim president of Venezuela, recognized the inevitability of crypto-enabled dollarization last August, when she <a href="https://www.reuters.com/business/energy/with-dollars-scarce-venezuela-currency-exchanges-turn-crypto-2025-09-03/">told</a> businesspeople that &#8220;non-traditional mechanisms of management” were being implemented to better manage the bolivar exchange rate.



“The Venezuelan government has since June allowed the use of more USDT,” Reuters <a href="https://www.reuters.com/business/energy/with-dollars-scarce-venezuela-currency-exchanges-turn-crypto-2025-09-03/">reported</a> shortly thereafter. With state approval, banks now sell the USDT earned from oil sales to local businesses, which use them to pay both domestic and international suppliers. They want stablecoins to circulate at the retail level, too: The head of the country’s National Association of Supermarkets recently <a href="https://forklog.com/en/hyperinflation-drives-venezuelas-shift-to-cryptocurrency/">told</a> state television that grocery stores were working to implement systems to accept payment in USDT.



In other words, the Venezuelan government is encouraging the use of dollars issued by Tether in place of the bolivars it issues itself.



As a result, USDT — or “Binance dollars” as many Venezuelans refer to them — is now <a href="https://cointelegraph.com/news/usdt-binance-dollars-replace-bolivar-in-venezuela">used</a> “for everything from groceries and condo fees to salaries and vendor payments.”



So for a stablecoin enthusiast like myself, it was disappointing to see that neither crypto nor stablecoins were deemed worthy of a mention in the US government’s <a href="https://www.justice.gov/opa/media/1422326/dl">indictment</a> of Nicolás Maduro. 



Instead, prosecutors described illicit money moving the old-fashioned way: planes returning from Mexico “loaded with drug proceeds,” weapons like grenades and grenade launchers being bartered for cocaine, protection services paid for by a portion of the cocaine being transported, and a $2.5 million bribe paid in cash dollars.



Why no mention of crypto?&nbsp;&nbsp;



There are two possibilities: 1) The US government no longer says anything mean about crypto, so the prosecutors knew to judiciously leave it out, or 2) crypto and stablecoins aren’t quite capable of moving money in the size Maduro and his associates needed to move it. The former is the more fun explanation, but the latter is the more likely one.&nbsp;



“The state is struggling to liquidate these [crypto] assets expeditiously,” Asdrúbal Oliveros explains, “because moving crypto funds requires passing various controls that are not being met.”



A <a href="https://www.trmlabs.com/resources/blog/understanding-the-use-of-cryptocurrencies-by-cartels">report</a> from TRM Labs reaches a similar conclusion: “Large-scale trafficking organizations continue to rely heavily on physical cash, trade-based laundering, and state or quasi-state protection for moving core proceeds, with crypto generally playing a secondary or complementary role rather than replacing these mechanisms.”



The national security analysts at Lawfare <a href="https://www.lawfaremedia.org/article/sounding-the-alarm-on-digitally-enabled-sanctions-evasion">agree</a>: “Cryptocurrency-based sanctions evasion still represents only a drop in the bucket compared to traditional illicit financial pathways.”



Others are more upbeat about the utility of stablecoins and crypto in, um, “international payments.”



InSight Crime, for example, <a href="https://insightcrime.org/news/us-court-cases-mexico-organized-crime-digital-money/">reports</a> that Mexican drug cartels are being “sustained” by an “industrial-scale crypto laundering pipeline moving dirty cash through digital networks to Chinese chemical suppliers.”



As they detail, stablecoins have found a niche matchmaking between Chinese money brokers who need dollars to sell to clients evading China&#8217;s capital controls and Mexican cartels who need to buy the chemicals they mix into fentanyl from China.



It’s not the product-market fit we crypto enthusiasts have hoped for, but revealed preferences suggest it’s a powerful one. The DEA, for example, <a href="https://www.dea.gov/sites/default/files/2025-07/2025NationalDrugThreatAssessment.pdf">says</a> its seizures of illicit cash are sharply lower because criminal groups are “prioritizing crypto over traditional cash-based laundering schemes.”



Seizures of “virtual currency” are correspondingly higher: From 2020 to 2024, the DEA has seized $2.5 billion of crypto vs. just $2.2 billion of cash.



That might explain why Maduro and his associates have stuck to more traditional means of payment — traceable crypto and freezable stablecoins aren’t quite ready for the largest money-laundering needs.



Nevertheless, Venezuela’s embrace of digital dollars is breaking new ground: “US adversaries have established an operational proof of concept,” Lawfare concludes, “and emerging financial technologies will likely further solidify it.”



If so, it might further solidify the dollar, too.



Being banned from using dollars didn&#8217;t make Venezuela accept, say, yuan for its oil — it just made the government use digital dollars instead.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Latin America

Venezuela’s sanctions are stablecoins’ proof of concept

This is a segment from The Breakdown newsletter. To read full editions, <a href="https://blockworks.co/brand/the-breakdown" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It is essential for human flourishing that we conduct substantial parts of our lives unobserved.”



— Tiffany Jenkins
</blockquote>



Hallways were the first privacy tech.



In 1716, the Duchess of Marlborough questioned the architect designing Blenheim Palace because of all the long, narrow rooms he had planned. The architect had to explain that these were “no more than a passage” between rooms.



Another contemporary builder articulated the purpose of this revolutionary new design:&nbsp; “All the Rooms in this House are private; that is, there is a Way into each of them without passing through any other Room.”



In other words, hallways created privacy.&nbsp;



“It took a century for this architectural feature to become commonplace,” Tiffany Jenkins writes in <a href="https://www.amazon.com/Strangers-Intimates-Rise-Fall-Private/dp/1529034167">Strangers and Intimates; the Rise and Fall of Private Life</a>. “But once it did, the Victorians embraced it wholeheartedly.”



Before the time of hallways, “there was no strictly separate private sphere, no aspect of life where others could not legitimately intrude,” she explains. “The outside world could pry into anyone’s business and was expected to do so. Curiosity and nosiness were mandated.”



Counterintuitively, that began to change with the Puritans, whose insistence that matters of religion and conscience were private freedoms established the first barrier the state could not cross.



Once established, this zone of non-interference expanded into a Victorian definition of privacy that protected bedrooms, communications and commerce.&nbsp;



In 1844, the privacy zone was tested when the British government was caught opening the letters of the political exile Giuseppe Mazzini to snoop on his correspondence with Italian revolutionaries.&nbsp;



Mazzini proved the surveillance by having friends mail him grains of sand and poppy seeds. When the letters arrived otherwise empty — the grains having fallen out during the government’s clumsy inspection — the breach of privacy sparked national outrage.



Thomas Carlyle called opening a man’s letters a “scoundrelism” equivalent to picking his pocket.



Radical MP Thomas Duncombe said the practice was “subversive of the public confidence essential to a commercial country.”



Most tellingly, the plots of two Charles Dickens novels — Bleak House and Little Dorrit — revolved around stolen letters that threatened to expose family connections and economic dealings.



All of which confirmed, as Tiffany Jenkins says, that “a revolution in the value and esteem of privacy had taken place.”



But while Victorians were the first to embrace this cultural ideal, the United States was the first to write it into law — sort of.



In 1890, Samuel Warren and Louis Brandeis published <a href="https://www.brandeis.edu/library/archives/exhibits/ldb-100/career/privacy.shtml">The Right to Privacy</a> — a foundational article arguing for a fundamental &#8220;right to be let alone&#8221; that was written in response to the privacy intrusions of newspapers and early photography.



This was a &#8220;seminal moment&#8221; in the history of privacy, Jenkins writes. But, in researching their article, the two lawyers observed a surprising gap: There is no mention of privacy in the Constitution — not even in the Amendments.



Despite the influence of the article, the constitutional silence on privacy persisted for decades.



In 1928, the Supreme Court upheld the government’s use of warrantless wiretaps in Olmstead v the United States, which ruled that wiretapping did not violate the Fourth Amendment (because there was no physical trespass onto the defendant&#8217;s property).&nbsp;



Writing on behalf of the four dissenting justices, Justice Brandeis warned that “the progress of science in furnishing the Government with means of espionage is not likely to stop with wiretapping. Ways may someday be developed by which the Government, without removing papers from secret drawers, can reproduce them in court, and by which it will be enabled to expose to a jury the most intimate occurrences of the home.”



Exactly that has happened, of course.&nbsp;



(Less prophetically, Brandeis also warned that “advances in the psychic and related sciences may bring means of exploring unexpressed beliefs, thoughts and emotions.”)



It was not until Griswold v Connecticut in 1965 that the Supreme Court asserted a constitutional right to privacy. And even then it took some creative logic.&nbsp;



“To rule that privacy is a constitutional right,” Jenkins writes, “Justice Douglas argued that the Bill of Rights’ specific guarantees have ‘penumbras’ which, when drawn together, add up to a de facto right to privacy.” Penumbras — a concept that sounds more astronomical than legal — seems like a precarious legal foundation for privacy.



In 1967, the right to privacy got a little more concrete when the Supreme Court ruled in Katz v the United States that the Fourth Amendment protected not just places, but people, too.



This was celebrated by privacy advocates because it decoupled privacy rights from property rights, ensuring that the Fourth Amendment applied in places like the telephone booth where Charles Katz was illegally betting on college basketball.



In hindsight, though, the celebrations look misplaced because the court simply required that the government get a warrant for its eavesdropping.&nbsp;



“The ruling actually normalized wiretapping surveillance as a tool of law and order,” Jenkins writes.



For privacy advocates, things have only gone downhill from there.



“Through a series of rulings,” Jenkins writes, “the Supreme Court narrowed the definition of prohibited searches while broadening the scope of permissible searches and warrants. As a result, constitutional protections for privacy were progressively undermined.”



To illustrate just how undermined, Jenkins cites the case of Monica Lewinsky, who was forced to surrender her private correspondence, gifts, and clothing simply because her infamous correspondent was accused of a crime (and not even a big one).



With the government granting itself that kind of subpoena power, privacy is no longer a locked door at the end of a hallway — instead, it’s just a paperwork requirement.



Jenkins laments this.



“It’s essential to have a private space shielded from corporate, state and public scrutiny,” she concludes; “a place where we can be alone.”



But her history of privacy demonstrates that, contrary to popular belief, “it’s neither ‘natural’ nor universal to have a private life.”



So if we want one, we’ll have to build it.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Cybersecurity

Privacy is not a ‘natural’ right — it’s an invention

This is a segment from The Breakdown newsletter. To read full editions, <a href="https://blockworks.co/brand/the-breakdown" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“If you can’t make money, you may want to consider being quiet. Maybe the market knows more than you do.”



— Jeff Yass
</blockquote>



Today, The Breakdown looks at developing stories and links from around the cryptoverse.



<h2 class="wp-block-heading"><a href="https://open.substack.com/pub/moontower/p/spooky-jeff-yass-on-prediction-markets?utm_source=share&amp;utm_medium=android&amp;r=3qcul">Jeff Yass says prediction markets will stop wars</a></h2>



After Jeff Yass brought his math and poker skills onto trading floors in the 1980s, global options markets stopped looking like a casino and started looking like a science.



Yass thinks prediction markets could do the same for the world.



First and foremost, he says, “It will stop wars.”



Yass cites the second Iraq War, which President Bush said would cost the US $20 billion but is now thought to have cost at least $2 trillion, and maybe as much as $6 trillion.



It’s unlikely prediction markets would have settled on such an astronomical number, but Yass believes they might have predicted something like $500 billion, in which case “people might have said, ‘Look, we don’t want this war.’”



That would have saved many, many lives, as well: “If people know how expensive it’s going to be and how disastrous it’s going to be, they’ll try to come up with other solutions.”



Prediction markets, he says, “can really slow down the lies that politicians are constantly telling us.”



He also cites applications in insurance, technology and even dating.



Asked by the 16-year-old podcast host what advice he’d give young people, Yass suggested they could avoid relationship mistakes by creating an anonymous prediction market for their friends to bet on.



“I believe in markets,” he concluded.



<h2 class="wp-block-heading"><a href="https://nodumbideas.com/p/does-momentum-exist-in-prediction">Do prediction markets trend?</a>&nbsp;</h2>



It sounds like a dumb idea: Unlike stocks with their open-ended valuations, prediction markets should converge toward the single fixed probability of a binary outcome.



But the author of No Dumb Ideas crunched the numbers and found that prices in political prediction markets do, in fact, trend: A market that trades up one day is more likely than otherwise to trade up the next day, too.



“Momentum seems to be real, at least for a day or two.”



The author speculatively attributes this to prediction markets making news, the dynamics of political campaigns and/or because momentum trading is fun.



I’d also cite Cliff Asness’s <a href="https://youtu.be/e1Iok2wyoCw?si=EFtXXTKtKE66hgs8">observation</a> that stocks exhibit momentum in part because they tend to underreact to news — so maybe prediction markets do, too.&nbsp;



Whatever the reason, the study by No Dumb Ideas suggests that prediction markets are subject to many of the same behavioral finance drivers as stock markets.



So there should be something in them for everyone: momentum traders, swing traders, quants…most of whom, I suspect, will lose money.



That would be good news, if so, because it will create a stronger profit motive for experts to participate — giving us better information on subjects like how much a war is likely to cost.&nbsp;



<h2 class="wp-block-heading"><a href="https://finance.yahoo.com/news/cohen-co-inc-cohn-q3-110037508.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAHrSRTmsAd6lSyvfTxRqPzte0umEmVDKNnADyPHwr54NKAQ4WbFoz-zVgj36EUv3GH-Tm6yHRdBnPcglpxzKJrr7HW8A8pV-KJzerF8rJf86v9KznGkfmFGeAvdZxtzyZ4kUIoO00KcT4RQq3Sdzp8YBxgnFNLGVmFEzxr1L1eEm">Cohen cashes in on DATs</a></h2>



The boutique investment bank Cohen &amp; Co. booked $179 million of revenue for its advisory work on a single DAT merger, Nakamoto Kindly MD.&nbsp;&nbsp;



That’s an astonishing haul given that the company currently holds just $594 million of bitcoin, per data from <a href="https://blockworks.com/analytics/treasury-companies">Blockworks Research</a>.



Even worse, Kindly MD now has a market capitalization of $267 million.



Cohen unfortunately took much of its compensation in shares, which have fallen 90% from the merger announcement. As a result, it booked a $146 million non-cash loss for the quarter, reducing its profit on the deal to only $33 million.



That’s still 5.5% of the company’s NAV and 12% of its market cap.



Nice work if you can get it.



<h2 class="wp-block-heading"><a href="https://x.com/haydenzadams/status/1987990314997739625?t=e9VD7PIDjoziGT5ONb8LCA&amp;s=19">Uniswap flips the switch</a></h2>



Uniswap Labs has made a financially underwhelming but symbolically significant proposal for the Uniswap Protocol to collect fees and return them to token holders.



The <a href="https://www.uniswapfoundation.org/blog/unification?utm_source=blockworks-research.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=unification&amp;_bhlid=26d5152c813ec755cdd95b31c94dbd1712ab5600">proposal</a> would retroactively burn 100 million tokens held in its treasury, “representing the protocol fees that could have been burned if fees were turned on at token launch.”



That amounts to a 16% buyback over five years, which is…not a lot?



<a href="https://x.com/0xSharples?s=20">0xSharples</a> of Blockworks Research <a href="https://x.com/0xSharples/status/1988256449806372906?s=20">estimates</a> that, excluding wash trading, Uniswap would have generated about $6 million of fees over the past month, which annualizes to just 1.5% of UNI’s $4.8 billion market capitalization — also not a lot for what looks like an ex-growth business.&nbsp;



More importantly, though, the proposal states that “Labs will stop collecting fees on its interface, wallet, and API to supercharge distribution and adoption of the Uniswap protocol.”



Beyond the fees that will reroute to token holders, this carries <a href="https://x.com/TheiaResearch/status/1988241585834734001?s=20">symbolic weight</a>: It unwinds crypto’s most prominent dual equity-token structure, which has been so fraught with conflicts of interest.



I’d argue this comes at a cost, though.



When the UNI token was launched in 2020 as a pure governance token, it became Exhibit A for why tokens were not stocks and protocols were not companies.&nbsp;



Anecdotally, it felt like most UNI holders did not view themselves as owners of the Uniswap protocol — a protocol, it was thought, could not be owned in the same way a company could.



Token holders were only stewards of the protocol, and the best thing for the protocol was to either keep whatever fees it earned in its treasury or not charge fees at all.&nbsp;



Now, though, once the protocol starts collecting revenue and returning it to token holders, how is it not just a company?&nbsp;



Jake Chervinsky says the proposal will “<a href="https://x.com/jchervinsky/status/1988333836611011037?s=20">minimize governance, maximize ownership</a>” for UNI token holders — which makes Uniswap look a lot more like a company and UNI a lot more like equity.&nbsp;



This is probably for the best: The industry needs investors and investors need a profit motive to invest.&nbsp;



But minimizing governance and maximizing ownership also makes crypto less special.



<h2 class="wp-block-heading"><a href="https://www.sec.gov/newsroom/speeches-statements/atkins-111225-securities-exchange-commissions-approach-digital-assets-inside-project-crypto">Project Crypto</a></h2>



If tokens are less special, do they risk being securities?



SEC Chair and crypto enthusiast Paul Atkins warns that calling something a token does not make it exempt from securities laws “if it in substance represents a claim on the profits of an enterprise and is offered with the sorts of promises based on the essential efforts of others.”



UNI now represents a claim on the profits of the Uniswap enterprise, so, to avoid being security, it will have to argue that it’s not making any promises on the efforts of others.



Chair Atkins promises to tread lightly, but warns that Project Crypto “is not a promise of lax enforcement at the SEC. Fraud is fraud.”



But he’s not asking a lot: “If you raise money by promising to build a network, and then take the proceeds and disappear, you will be hearing from us.”



That’s a pretty low bar for crypto projects to clear, although plenty would not have in recent years.



Nevertheless, Atkins will do everything he can to be sympathetic: “We will not forget that behind every token debate, there are real people.”



Sounds like he’s not on Crypto Twitter much.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

predictions market

Prediction markets, DATs, the fee switch, and Project Crypto

Shaunda Devens

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Risk assets caught a bid as the Senate advanced a bipartisan funding package to end the record-long shutdown and Trump floated a $2,000 tariff dividend, lifting BTC from its $100,000 bottom. Polymarket now prices 87% odds of resolution by Nov. 15, which would restore critical data flow after two months of jobs/CPI blackouts. Trump&#8217;s plan faces much slimmer approval odds.



<h2 class="wp-block-heading">Indices</h2>



Risk assets caught a bid after the Senate advanced a bipartisan funding package to end the record-long government shutdown. Polymarket odds now show an 87% chance the shutdown ends by Nov. 15, which would restore critical data flow after two straight months of jobs and CPI blackouts. The news was particularly welcome for BTC, which had been struggling around the $100,000 mark all week and was down -10% before bouncing on the headlines. While the bill still needs House approval and Trump’s signature, markets are taking the procedural progress as the main risk-on catalyst, lifting global equities and futures.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="850" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=1024&amp;h=1024" alt="" class="wp-image-109899" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Simultaneously, President Trump floated a $2,000 “tariff dividend” funded by tariff revenues, though Polymarket traders price just a<a href="https://polymarket.com/event/will-trump-create-a-tariff-dividend-in-2025?tid=1762773394387"> 21% probability</a> the Supreme Court ultimately upholds his tariff authority — making the stimulus plan’s funding source legally precarious. Markets nonetheless cheered the twin stimuli: The reopening lessens tail risks around air travel, SNAP benefits, and federal payrolls for a few months, while any direct payments would be pro-consumption.



Fed policy remains the other key variable: Polymarket now shows 72% odds of a 25 bps December cut and <a href="https://polymarket.com/event/fed-decision-in-december?tid=1762773591343">27% odds of no change</a>, slightly more dovish than the <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">60-65% priced into rates markets</a>. Still, Friday’s consumer sentiment <a href="https://www.sca.isr.umich.edu/">slumped to 50.3, near three-and-a-half‑year lows</a>, with the shutdown cited as a key driver.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1015" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=1024&amp;h=1024" alt="" class="wp-image-109886" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=405 405w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=411 411w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=345 345w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



In crypto, Revenue tokens led gains yesterday (+5.48%), driven by strength in Ethereum Eco (+4.8%) and DeFi (+4.3%), while L1s (+4.8%) also posted solid advances. BTC bounced +2.2% after testing the $100,000 level, providing a tailwind across sectors. The only laggards were Gaming (-2.7%) and Modular Infrastructure (-2.6%), which saw profit-taking after recent outperformance.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="810" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=1024&amp;h=1024" alt="" class="wp-image-109887" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



<h2 class="wp-block-heading">Charts for The Week</h2>



Plasma DeFi continues to struggle with outflows. The week of Nov. 3-7 saw -$2.5 billion exit the ecosystem, slightly higher than the previous week&#8217;s -$2.3 billion.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=1024&amp;h=1024" alt="" class="wp-image-109890" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



As a result, stablecoin supply on Plasma has collapsed from a $6.35 billion peak to just $1.63 billion (74% decline). The fact this is happening despite ongoing incentive spend of 977,000 XPL per day (18% annual inflation on circulating supply) makes the trend even more concerning. Despite these incentives going toward platforms like Aave to subsidize USDT lending rates to 8.5% (3.54% reward + 4.99% intrinsic), Plasma&#8217;s headline USDT lending rates have fallen roughly inline with the broader stablecoin landscape (SyrupUSDC, USDe, etc).



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=1024&amp;h=1024" alt="" class="wp-image-109888" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



On Solana, Meteora continued to post robust revenue numbers, generating $10.4 million in October. While memecoin infrastructure is considered highly cyclical by investors, therefore deserving of discounted valuations, Meteora&#8217;s non-memecoin revenue hit an all-time high of $1.38 million in October, nearly doubling September&#8217;s $751,000. Memecoins still dominate overall revenue due to their high take rate: Meteora earns 0.16% on memecoin swaps vs. 0.005% on stablecoin swaps, meaning the protocol needs $32 of volume from majors to match $1 of memecoin revenue.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=1024&amp;h=1024" alt="" class="wp-image-109889" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



This creates a strong financial profile: At $173 million circulating market cap and $360 million FDV, the protocol trades at roughly 1.5x P/S on circulating supply and 3x on FDV. However, the lack of token utility and upcoming unlocks remain key overhangs for investor appetite. Investors should mark Dec. 10 on their calendars, as this is <a href="https://luma.com/metdhabi">Meteora&#8217;s landmark event</a> that might announce some utility for the token.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1580" height="938" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=1024&amp;h=1024" alt="" class="wp-image-109891" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=1580 1580w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=440 440w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=369 369w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=80 80w" sizes="auto, (max-width: 1580px) 100vw, 1580px" /></figure>



Finally, when looking at ETF flows, Solana stands out as the only asset with consistent inflows in the previous week. While volumes decreased from the standout Oct. 27 to Nov. 2 period ($199 million), Solana showed significant strength when adjusting for market cap: ETF flows through October have accumulated 0.263% of supply, vs. BTC&#8217;s 0.133% and ETH&#8217;s 0.0818%.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=1024&amp;h=1024" alt="" class="wp-image-109892" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

0xResearch Newsletter

Bitcoin is up as shutdown clouds begin to clear

Blockworks

President Donald Trump plans to tap Michael Selig, chief counsel for the Securities and Exchange Commission’s crypto task force, to chair the Commodity Futures Trading Commission, according to a <a href="https://www.bloomberg.com/news/articles/2025-10-24/trump-to-pick-michael-selig-for-cftc-chair-amid-crypto-expansion?srnd=homepage-americas">report</a> from Bloomberg.&nbsp;



The appointment marks the administration’s latest step toward unifying federal oversight of digital assets as Congress debates broader crypto market structure legislation.



Selig currently serves as a senior aide to SEC Chairman Paul Atkins, where he has focused on aligning the SEC and CFTC’s regulatory approaches to digital assets, swaps, and futures markets.&nbsp;



Before joining the SEC, Selig was a partner at Willkie Farr &amp; Gallagher, advising asset managers on derivatives and financial regulation.&nbsp;



If confirmed by the Senate, Selig would succeed acting leadership at the CFTC, a relatively small but increasingly central regulator of derivatives and crypto markets.&nbsp;



The nomination follows Trump’s earlier failed attempt to install former CFTC commissioner Brian Quintenz, a16z crypto’s global policy head, whose bid stalled amid industry opposition.



The CFTC, which supervises swaps, futures, and prediction markets, has gained prominence as lawmakers weigh bills clarifying jurisdiction between the SEC and CFTC over digital assets.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

CFTC

Trump plans to pick Michael Selig to lead CFTC: Report

Casey Wagner

Democrats and Republicans hosted dueling roundtables with crypto industry executives on Wednesday in an effort to advance cryptocurrency market structure legislation.&nbsp;



More than three months after the House passed the CLARITY Act, the bill has yet to make meaningful progress in the Senate. According to people familiar with Wednesday’s discussions, both parties are pointing fingers.&nbsp;



Democrats, gathered by Sen. Kirsten Gillibrand on Wednesday morning, are growing frustrated with the crypto industry’s tendency to align itself with Republicans.&nbsp;



“Don’t be an arm of the Republican Party, they used you all and your megaphones to f*** us,” Democrat Sen. Ruben Gallego told industry members and fellow Democrats during the roundtable discussion, according to two people in attendance.&nbsp;



Senate Banking Committee Chair Sen. Tim Scott, who hosted fellow Republicans and industry voices Wednesday afternoon, disagreed, saying Republicans have been waiting for Democrats to come to the table.&nbsp;



“Despite repeated requests for edits and redlines from Democrats, they have yet to provide formal feedback or agree to a markup date,” a spokesperson for Sen. Scott told Blockworks.&nbsp;



The roundtables come after Senate Banking Committee Republicans released a <a href="https://www.banking.senate.gov/imo/media/doc/senate_banking_committee_digital_asset_market_structure_legislation_discussion_draft.pdf">second discussion draft</a> of the legislation last month. Democrats responded with a list of <a href="https://www.gallego.senate.gov/wp-content/uploads/2025/09/Market-Structure-Framework-Final.pdf">principles</a> they’d like to see in the legislation. An additional Democratic proposal focused on DeFi was <a href="https://docs.google.com/document/d/16Ws48Myk5E_iwaBrhjgZmxFUnhPG0KdQ/edit">leaked</a> earlier this month, furthering the divide between the two parties.&nbsp;



The industry’s public — and widely negative — response to this leaked document derailed negotiations between Democrats and Republicans, a person familiar with the matter told Blockworks. Democrats specifically warned industry members that the reaction thwarted the bill’s progress, the person added.&nbsp;



Committee Republicans originally wanted to markup the legislation in late September, but delayed “to give Democrat colleagues additional time to come to the table and substantively engage on legislative text,” the spokesperson added.&nbsp;&nbsp;



Republicans have not ruled out scheduling a markup amid the government shutdown, which has now entered its fourth week, a person familiar with the matter said.&nbsp;



Several Democrats are still concerned about President Trump and his family’s crypto business dealings, a person in attendance noted.&nbsp;



Coinbase CEO Brian Armstrong, who attended both the Democrat and Republican meetings, told reporters Wednesday that these ethical concerns are “much broader than crypto.”&nbsp;



The industry is still waiting on the Senate Agriculture Committee to release its market structure bill draft. This version of the legislation will focus primarily on the Commodity and Futures Trading Commission’s role in overseeing crypto markets.&nbsp;



The bill was “close” to the finish line before the government shutdown, a person familiar with the matter said, but with CFTC staffers who work with Congressional committees now furloughed, it’s unclear when progress could be made.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Capitol Gains

Capitol Gains: What’s the market structure holdup? Depends who you ask

US President Donald Trump has issued a full pardon to Changpeng Zhao, the founder and former chief executive of Binance.



Zhao, widely known as “CZ,” pleaded <a href="https://www.justice.gov/archives/opa/pr/binance-and-ceo-plead-guilty-federal-charges-4b-resolution">guilty</a> in 2023 to violations of U.S. anti-money-laundering laws and was serving a four-month prison sentence following a $4.3 billion settlement between Binance and the U.S. Department of Justice.



The Wall Street Journal first <a href="https://www.wsj.com/finance/currencies/trump-pardons-convicted-binance-founder-7509bd63?mod=breakingnews">reported</a> the news.&nbsp;



The pardon removes all remaining legal penalties against Zhao, who had stepped down from Binance as part of the plea deal, according to the report.&nbsp;



White House press secretary Karoline Leavitt told the WSJ that Trump had “exercised his constitutional authority by issuing a pardon for Zhao, who was prosecuted by the Biden Administration in their war on cryptocurrency.&nbsp;



“The Biden Administration’s war on crypto is over.”



Zhao, a Canadian citizen born in China, founded Binance in 2017 and built it into the world’s largest crypto exchange by trading volume. His conviction stemmed from failures to implement anti-money-laundering controls and violations of U.S. sanctions.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Michael McSweeney</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Binance

Trump pardons Binance founder Changpeng Zhao: WSJ

Senators involved in crafting crypto market-structure legislation may not be communicating much with one another, but they are talking to the industry.&nbsp;



Democrats and Republicans hosted dueling roundtables with crypto industry executives on Wednesday after negotiations between the parties stalled earlier this month. A bipartisan agreement appears to be a long way off, one source says, particularly if the industry continues to align itself with Republicans.&nbsp;



“Don’t be an arm of the Republican Party, they used you all and your megaphones to f*** us,” Democrat Sen. Ruben Gallego told industry members and fellow Democrats Wednesday morning, according to two people in attendance.&nbsp;



Sen. Kirsten Gillibrand, who was involved in bipartisan efforts to pass stablecoin legislation earlier this year, hosted the Democrats’ roundtable. Attendees included Coinbase CEO Brian Armstrong, Solana Policy Institute president Kristin Smith, Paradigm regulatory affairs VP Justin Slaughter, and Ripple chief legal officer Stuart Alderoty.&nbsp;



All Democrat Senators in attendance said they are committed to passing a crypto market structure bill, a person familiar with the matter said. Members added that Republicans themselves are not completely aligned on their draft.



The Republican meeting, which kicked off Wednesday afternoon, was hosted by Senate Banking Committee Chair Tim Scott and Cynthia Lummis, who worked closely with Gillibrand on stablecoin legislation and previous versions of a crypto market structure bill.&nbsp;



Some invited industry voices, including Armstrong and Smith, attended both meetings, but as of Wednesday afternoon, party leaders had no formal plan to meet with one another, according to a person familiar with the matter.&nbsp;



The roundtables come as industry members grow skeptical that market structure will pass this year – or even this session – of Congress. Increasing concern from Democrats about President Trump and his family’s involvement in the industry, coupled with internal disagreements between crypto companies about what should be in the bill, are posing challenges, one person involved in lobbying efforts told Blockworks.&nbsp;



The House passed the CLARITY Act in July. The Senate Banking and Agriculture Committees have since been working on their own versions of the bill, which will eventually have to merge with each other and CLARITY.



Senate Banking Committee Republicans released a <a href="https://www.banking.senate.gov/imo/media/doc/senate_banking_committee_digital_asset_market_structure_legislation_discussion_draft.pdf">revamped version</a> of their bill last month. Democrats responded with a list of <a href="https://www.gallego.senate.gov/wp-content/uploads/2025/09/Market-Structure-Framework-Final.pdf">principles</a> they’d like to see in the legislation. An additional Democratic proposal focused on DeFi was leaked earlier this month, furthering the divide between the two parties.&nbsp;



Senate Banking Committee Republicans are eager to markup their draft, but are growing frustrated with Democrats and their proposals. Republicans want Democrats to come to the table with a complete draft so negotiations can continue, according to two people familiar with the matter.&nbsp;



Wednesday’s roundtables come as the government shutdown continues, now in its third week and officially the second-longest in US history. Committee leadership will move ahead with crypto market structure legislation <a href="https://blockworks.co/news/capitol-gains-shutdown-blues">even if the shutdown continues</a>, three people familiar with the matter told Blockworks.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Cynthia Lummis

Democrat tells crypto execs Republicans ‘used them’: Sources

The US government has <a href="https://blockworks.co/news/doj-seeks-forfeiture-of-more-than-14b-in-bitcoin-tied-to-global-fraud-ring">seized</a> nearly 130,000 BTC —&nbsp;worth almost $15 billion —&nbsp;marking the largest forfeiture action in history and spurring discussions of what this could mean for the newly-created strategic bitcoin reserves.&nbsp;



Experts warn that the road ahead is lengthy.&nbsp;



The actual seizure of the assets is only the first step, though. Should the court find that the assets were illicitly obtained, investigators will then have to go about finding and compensating victims.&nbsp;



“Yes, they&#8217;ve seized the assets, but that doesn&#8217;t mean they own it. It means they&#8217;ve laid a claim to it,” Aidan Larkin, co-founder and CEO of Asset Reality, said during a keynote address at DAS London Wednesday.&nbsp;



Larkin continued: “It could take five years, seven years, ten years. But the good news is there is a greater focus on asset management, because the next big concern is, historically, we don&#8217;t do well as a global society managing seized assets.”



Per President Trump’s March <a href="https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile/">executive order</a> establishing a strategic bitcoin reserve, it’s expected that whatever funds remain after victim compensation will be held by the US government.&nbsp;



The US government already holds between $15 billion and $20 billion in forfeited bitcoin, Treasury Secretary Scott Bessent said in August.&nbsp;



The process of asset recovery itself doesn’t differ much depending on the asset, Larkin said. For governments, recovering physical goods or cryptocurrencies comes with the same steps: find, recover and secure. The challenges with crypto asset recovery come with the management.&nbsp;



“If I&#8217;m the Lazarus group, and all of a sudden I&#8217;m seeing government agencies all around the world managing billions of dollars of seized crypto, I know where I&#8217;m going next to try and exploit,” Larkin said.&nbsp;



As part of the alleged money laundering scheme, the DOJ says Zhi and co-conspirators combined illicit funds with newly-mined bitcoin from their China-based mining operation, Lubian. During the time it was active, Lubian was the sixth-largest mining company in the world, prosecutors say.&nbsp;



Onchain sleuths are now speculating about when, exactly, the US government may have taken control of the seized bitcoin.&nbsp;



Blockchain analytics platform Arkham <a href="https://info.arkm.com/announcements/arkham-uncovers">reported</a> last month that Lubian was hacked in December 2020 for 127,426 BTC — worth $3.5 billion at the time.&nbsp;



Crypto data and compliance firm Elliptic now <a href="https://www.elliptic.co/blog/15-billion-us-seizure-reveals-prince-groups-connection-to-iran-china-bitcoin-mining-theft">says</a> that, according to the wallet addresses listed in the indictment, the assets the US government seized appear to be the same ones that were “stolen” from Lubian back in 2020.&nbsp;



According to a person familiar, it’s possible that the US government did seize the assets in 2020. This investigation may have only been recently announced, but it’s been underway for years, the person added.&nbsp;



Elliptic cofounder Tom Robinson agreed, telling <a href="https://www.wired.com/story/feds-seize-record-breaking-15-billion-in-bitcoin-from-alleged-scam-empire/">Wired</a> that it’s possible the US government itself hacked Lubian. He added that there’s also a chance that there was no hack at all, and Lubian faked it as part of the money laundering scheme.&nbsp;



The DOJ did not announce when it gained control over the assets or when the investigation started and did not return Blockworks’ request for comment.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Bitcoin

Capitol Gains: The US seized $15B in bitcoin. What comes next?

The Office of the Comptroller of the Currency (OCC) has granted preliminary conditional approval for a de novo national bank charter to Erebor Bank.



The approval positions Erebor Bank, a venture backed by Anduril founder Palmer Luckey and firms connected to Joe Lonsdale and Peter Thiel, to become one of the first federally-chartered banks built around the innovation-economy client base once served by Silicon Valley Bank.&nbsp;



According to Erebor’s June <a href="https://www.occ.treas.gov/news-issuances/news-releases/2025/nr-occ-2025-101.html">filing</a>, investors plan to commit around $250 million in capital through 8VC, Founders Fund, Haun Ventures, and other backers. The proposed leadership team includes Michael Hagedorn as president, with Owen Rapaport and Jacob Hirshman serving as co-chief executives.



Erebor’s application outlines a target clientele spanning crypto, AI, and defense startups as well as high-net-worth individuals in those sectors. The bank also intends to assist foreign banks with U.S. dollar-based transactions.&nbsp;



In its OCC filings, Erebor <a href="https://www.wired.com/story/palmer-luckey-joe-lonsdale-bank-erebor/">describes</a> plans to become “the most regulated entity conducting and facilitating stablecoin transactions,” to promote “broader acceptance of stablecoins,” and to accept cryptocurrencies as collateral for certain loans. Stablecoins are digital tokens whose value is pegged to a currency such as the U.S. dollar, often backed by cash or short-term Treasuries to maintain price stability.



Comptroller Jonathan V. Gould called the move a milestone for a “dynamic and diverse federal banking system,” adding that the agency “does not impose blanket barriers” to banks that want to engage in permissible digital-asset activities, provided they are conducted in a safe and sound manner.



While the OCC’s conditional approval confirms Erebor’s eligibility to proceed, the bank must still meet all pre-opening requirements, including capital adequacy, governance, and compliance testing.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Banking

OCC guidance paves way for Erebor’s crypto-bank ambitions

Bridge, Stripe’s stablecoin unit, has applied to the U.S. Office of the Comptroller of the Currency for a national trust bank charter.



The move was announced by co-founder Zach Abrams <a href="https://x.com/zcabrams/status/1978138910464324060">on X</a>.&nbsp;



Abrams said that the charter would enable Bridge to manage reserves, provide custody and other functions. The post cited the GENIUS Act, a legal framework for stablecoins that was <a href="https://blockworks.co/news/trump-signs-genius-law">signed into law</a> in July.



“We’ve long believed stablecoins will be a core, regulated financial building block. This regulatory infrastructure will enable us to tokenize trillions of dollars and make this future possible,” Abrams wrote.



The OCC charter, if approved, would place Bridge in a similar regulatory category to Paxos and Anchorage Digital, both of which hold charters. These charters permit companies to engage in digital asset custody and token issuance under federal banking supervision rather than state-by-state licensing.



Stripe’s acquisition of Bridge marked a major strategic step for the payments firm into stablecoins. The transaction, <a href="https://blockworks.co/news/stripe-bridge-acquisition-stablecoin-infrastructure">announced</a> last year, was completed in February.&nbsp;



The latest move suggests a deeper integration of stablecoins into mainstream financial rails. Stripe <a href="https://stripe.com/en-hk/newsroom/news/sessions-2025">announced</a> new stablecoin-powered money management tools in May.



The OCC has not publicly commented on the filing. Bridge’s application remains pending, with review timelines typically spanning several months.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor<a href="https://blockworks.co/author/michael-mcsweeney" target="_blank" rel="noreferrer noopener"> Michael McSweeney </a>before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Stripe’s stablecoin biz seeks national bank trust charter

The US Department of Justice has filed a civil forfeiture complaint against approximately 127,271 bitcoin — valued at more than $14 billion — allegedly linked to an international fraud and money laundering network.



Federal prosecutors said the bitcoin, described as “proceeds and instrumentalities” of criminal schemes, was seized from unhosted wallets controlled by Chen Zhi, founder and chairman of the Cambodia-based Prince Holding Group. The funds are now in U.S. custody, per a <a href="https://www.justice.gov/usao-edny/pr/chairman-prince-group-indicted-operating-cambodian-forced-labor-scam-compounds-engaged">press release</a>.



The action marks the largest cryptocurrency forfeiture in the department’s history, the DOJ said.&nbsp;



An accompanying indictment unsealed in the Eastern District of New York charges Chen, also known as “Vincent,” with wire fraud conspiracy and money laundering conspiracy. According to prosecutors, Prince Group operated forced-labor compounds across Cambodia where individuals were coerced into running “pig butchering” scams, or fraudulent operations that defrauded victims in the U.S. and abroad of billions of dollars.&nbsp;



Chen remains at large, US officials said. The FBI’s New York Joint Asian Criminal Enterprise Task Force and the Bureau’s Virtual Asset Unit participated in the investigation.



“As alleged, the defendant directed one of the largest investment fraud operations in history, fueling an illicit industry that is reaching epidemic proportions,” United States Joseph Attorney Nocella said in a statement.



Investigators allege that Chen and his associates laundered criminal proceeds through luxury purchases and high-value assets, including yachts, private jets, rare collectibles, and a Picasso painting acquired via a New York auction house.&nbsp;



If convicted, Chen faces up to 40 years in prison.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor <a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Michael McSweeney</a> before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

DOJ seeks forfeiture of more than $14B in bitcoin tied to global fraud ring

Reform UK leader Nigel Farage took to the stage at DAS London this morning and promised that, should his party enter government, it would oversee a process of deregulation in the country’s crypto space.



During his appearance, Farage touted his party’s “Cryptoassets and Digital Finance Bill,” <a href="https://www.bbc.com/news/articles/cg4vnd0d17ro">unveiled in May</a> and criticized the management of the UK financial service sector by the Conservative Party and Labour Party.&nbsp;



“It’s been completely neglected by both the last government and by this government, and I want to regenerate it. I want to make London back to being a great trading center and that includes [the crypto] space,” he told attendees.



Reform UK’s draft bill proposed cutting capital gains tax on crypto to 10%, establishing a bitcoin reserve at the Bank of England, and tightening rules against account closures based on lawful digital-asset activity.



“We have to get the tax burden right,” he said of Reform UK’s broader economic plans, decrying a “flight of capital, the flight of brains” to other countries.&nbsp;



Farage’s pledges come as the major UK political parties fight over the direction of the country’s economy, amid a period of <a href="https://www.theguardian.com/business/2025/sep/12/stagnant-gdp-shows-scale-of-challenge-for-rachel-reeves-at-autumn-budget">slowing growth</a> and deteriorating <a href="https://www.theguardian.com/business/2025/oct/05/rachel-reeves-second-budget-narrative-fairness-tax-rises">government finances</a>. Recent polls, per <a href="https://www.politico.eu/europe-poll-of-polls/united-kingdom/">Politico EU</a>, show Reform performing above the other parties, including the governing Labour Party.&nbsp;



The comments also come amid shifts in the regulatory landscape for crypto in the UK. Late last month, UK and US officials announced the creation of <a href="https://home.treasury.gov/news/press-releases/sb0256">a new collaborative task force</a> intended, in part, to harmonize crypto rules.



Meanwhile, Bank of England chief Andrew Bailey has pushed for major stablecoins to be closely regulated in the country. According to Reuters, he remarked on Oct. 1 that “widely used UK stablecoins should have access to accounts at the BoE in order to reinforce their status as money.” Bailey has <a href="https://www.reuters.com/business/finance/bank-england-says-regulators-must-keep-ahead-stablecoins-2020-09-03/">long argued</a> that regulators must closely monitor and enforce rules around stablecoins.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor <a href="https://blockworks.co/author/michael-mcsweeney" target="_blank" rel="noreferrer noopener">Michael McSweeney</a> before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Reform UK leader Nigel Farage touts plans for crypto deregulation, Bitcoin reserve

The Bank of Russia will allow domestic banks to engage in limited cryptocurrency operations under stringent oversight, marking a controlled step toward crypto integration in the country’s financial system.



First Deputy Chairman Vladimir Chistyukhin <a href="https://bits.media/bank-rossii-opredelilsya-s-dopuskom-bankov-k-kriptooperatsiyam/">announced</a> the move at the Finopolis fintech forum, noting that while the central bank remains conservative on decentralized assets like Bitcoin, it recognizes the need to align with market realities.



Chistyukhin stated that the Bank of Russia will impose strict requirements on participating institutions to ensure crypto does not become a dominant banking activity. A draft framework would reportedly cap crypto exposure at 1% of a bank’s capital, paired with high reserve thresholds to mitigate systemic risk. “We hold conservative views and think about how appropriate it is for the banking sector to include cryptocurrency in its assets,” said Chistyukhin, speaking in Russian. “After discussing with the professional banking community, we came to the conclusion that it would be unjustified to exclude banks from such operations.”



The initiative follows growing pressure from Russia’s financial sector to ease restrictions amid persistent Western sanctions and ruble instability.



The country’s experimental legal regime for crypto transactions, introduced earlier in 2025, already allows qualified companies and wealthy investors to use digital assets for international settlements. To qualify, individuals must hold at least 100 million rubles in deposits and securities and report annual income above 50 million rubles.



Chistyukhin and Governor Elvira Nabiullina both urged the swift passage of a comprehensive cryptocurrency bill by 2026. The legislation would establish a licensing system for service providers and clarify the legal status of crypto entities operating in Russia.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Banks

Russia’s central bank to allow limited crypto activity by banks

Roger Ver, the early Bitcoin investor and Bitcoin Cash promoter known as “Bitcoin Jesus,” has reached a tentative $48 million settlement with the US Justice Department to resolve criminal tax fraud charges filed in 2024.



The <a href="https://www.nytimes.com/2025/10/09/technology/roger-ver-bitcoin-justice-department-deal.html?unlocked_article_code=1.sE8.xx5H.LlbKWwOXVl0N&amp;smid=nytcore-ios-share&amp;referringSource=articleShare">agreement</a>, first reported by The New York Times and still pending court approval, would drop charges if Ver meets all payment and compliance terms. The case underscores a marked shift in federal crypto enforcement under President Donald Trump’s second administration, which has eased pressure on high-profile industry figures after years of scrutiny under President Joe Biden.



Ver, 46, was accused of evading taxes linked to his digital asset holdings while renouncing his US citizenship in 2014. Prosecutors alleged he concealed the value of his Bitcoin portfolio before expatriation. Arrested in Spain last year, Ver faced extradition proceedings until negotiations began earlier in 2025.



According to the NYT report, Ver also paid $600,000 to political strategist Roger Stone and retained attorneys tied to Trump’s legal defense network in an effort to reduce his exposure.



The case follows a series of reversals in US crypto enforcement. Since January 2025, the SEC has dropped suits against Coinbase and other major exchanges, while President Trump pardoned Ross Ulbricht and the BitMEX founders.&nbsp;



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Roger Ver reaches $48M tax settlement with US prosecutors: NYT

Luxembourg’s Intergenerational Sovereign Wealth Fund (FSIL) will allocate 1% of its portfolio — about €7 million — to bitcoin and other crypto assets, Finance Minister Gilles Roth announced on Thursday, during the 2026 budget presentation. The move makes Luxembourg the first Eurozone country to introduce sovereign exposure to bitcoin exchange-traded funds (ETFs), a significant symbolic development for Europe’s financial landscape.



According to Roth, the FSIL will gain exposure indirectly through regulated ETFs rather than direct holdings, minimizing custody and operational risks. Treasury Director Bob Kieffer confirmed that the allocation follows a July 2025 policy revision allowing up to 15% of FSIL assets to be placed in “alternative investments,” including crypto.



As of mid-2025, FSIL held roughly $887 million, mostly in bonds and index funds. Kieffer described the 1% allocation as a balanced experiment reflecting Bitcoin’s “long-term potential.”



The decision aligns with Luxembourg’s ongoing efforts to establish itself as a fintech and crypto hub under the EU’s Markets in Crypto-Assets (MiCA) regime. The country hosts numerous firms seeking MiCA licenses, reflecting its ambition to shape Europe’s digital finance infrastructure.



Luxembourg joins a growing list of governments cautiously exploring bitcoin exposure.



Norway’s $1.9 trillion sovereign fund indirectly holds bitcoin through corporate equities, while the Czech Republic and Finland have signaled similar interest.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

bitcoin ETFs

Luxembourg wealth fund to allocate 1% to Bitcoin ETFs

Bybit says it has become the first cryptocurrency exchange to receive a full Virtual Asset Platform Operator License from the Securities and Commodities Authority (SCA) of the United Arab Emirates (UAE).&nbsp;



It’s a regulatory first for the Gulf nation and a significant step in the country’s bid to establish itself as a global hub for compliant digital finance.



The license, <a href="https://www.bybit.com/press/post/bybit-secures-uae-s-first-virtual-asset-platform-operator-license-from-securities-and-commodities-authority-blte25e6cd2d822b03a?channel=pr_&amp;medium=organic_social&amp;source=twitter&amp;sa_utm_ci=107&amp;pid=Social_twitter&amp;dtpid=17600209308403560&amp;campaign=enannouncement_17600209308403560&amp;c=enannouncement_17600209308403560&amp;utm_source=twitter&amp;utm_medium=organic_social&amp;sa_utm_tcn=17600209308403560&amp;sa_utm_channel=pr_&amp;is_retargeting=true">announced</a> on Thursday, grants Bybit authorization to operate regulated trading, brokerage, custody, and fiat conversion services for both retail and institutional clients across the UAE.



Bybit’s achievement follows its In-Principle Approval (IPA) from the SCA in February 2025, obtained with guidance from the Blockchain Center in Abu Dhabi, which helped the exchange navigate the SCA’s compliance framework.



The SCA’s approval makes Bybit the first exchange officially <a href="https://x.com/Bybit_Official/status/1976297822103245111">recognized</a> under the UAE’s Virtual Asset Service Provider (VASP) rules, <a href="https://x.com/adbc_ae/status/1976313261105741894">reflecting</a> the nation’s push to align with Vision 2031 and international financial standards.



Co-founder and CEO Ben Zhou said the license demonstrates Bybit’s commitment to “building trust through compliance and transparency.” The company will now expand its regional headquarters in Abu Dhabi, planning more than 500 local hires and launching education and Web3 innovation programs in partnership with local institutions.&nbsp;



Co-CEO Helen Liu credited the SCA’s “clear, well-structured regulatory framework” for enabling compliant innovation in digital assets.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Bybit

Bybit secures UAE’s first SCA virtual asset license

The Senate on Wednesday once again rejected both plans to fund the federal government and end the shutdown, which now enters its ninth day.&nbsp;



Senators have so far voted six separate times on partisan measures to extend funding.&nbsp;



Republicans, with 53 Senate seats, need eight Democrats to cross the aisle.&nbsp;



Without a budget, the crypto policy agenda remains in limbo, but Washington insiders insist that momentum isn’t completely lost.&nbsp;



While the House remains in a shutdown-induced recess, the Senate appears to be in session for both budgetary and crypto matters.



Two people familiar with the matter told Blockworks that the Senate Banking Committee remains committed to moving crypto market structure policy along, even if that means holding a markup hearing mid-shutdown. Regardless of whether a budget is passed, Committee leadership hopes to markup the Responsible Financial Innovation Act before the end of the month, they added.



To recap, the House passed the CLARITY Act in July. The Senate Banking and Agriculture Committees have since been working on their own versions of the bill, which will eventually have to merge with each other and CLARITY.



Senate Banking Committee Republicans released a revamped version of their bill last month. Democrats responded with a list of principles they’d like to see in the legislation.&nbsp;



The Agriculture Committee has yet to release its draft, which will focus mainly on the Commodity and Futures Trading Commission’s role in crypto market regulation.&nbsp;



Pre-shutdown, a person familiar with the matter said the draft bill was “close,” but now, with federal agencies operating with limited staff, it’s going to take <a href="https://blockworks.co/news/etf-sec-govt-shutdown">more time</a>.&nbsp;



Agency staffers working with Congressional committees on policy — like cryptocurrency market structure — are largely furloughed during the shutdown, lowering the odds that we’ll see a draft soon, according to a person familiar.&nbsp;



With federal agencies operating with limited personnel, new spot crypto ETFs are not expected to be approved until the shutdown ends. In its shutdown operations plan, the SEC said it will <a href="https://blockworks.co/news/capitol-gains-shutdown-blues">not review or approve</a> registration statements or issue notices of effectiveness.&nbsp;



Given the SEC’s new generic listing standards and the extensive work issuers and agency staff put in ahead of the shutdown, two issuers who spoke with Blockworks said they are confident that new products will get the green light quickly after federal operations resume.&nbsp;



The issuers added that they have not received communication from the SEC since the shutdown began last week.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Capitol Gains: Crypto hearings expected to continue mid-shutdown

Fiserv, Inc. and the Bank of North Dakota are set to launch Roughrider Coin, the first state-backed stablecoin.



<a href="https://investors.fiserv.com/newsroom/detail/2868/bank-of-north-dakota-and-fiserv-partner-to-launch-roughrider-coin-north-dakotas-first-stablecoin">Announced</a> on Wednesday, the US dollar-backed token will operate on the Fiserv digital asset platform, with a rollout to North Dakota banks and credit unions expected in 2026. The initiative makes North Dakota the first U.S. state to issue its own stablecoin through a private fintech partnership, signaling a notable shift toward state-level digital asset experimentation.



Named in homage to Theodore Roosevelt’s Rough Riders, the Roughrider Coin aims to enhance settlement efficiency across financial institutions, facilitate cross-border payments, and drive merchant adoption.&nbsp;



The Bank of North Dakota, established in 1919 as the country’s only state-owned bank, described the stablecoin as a continuation of its mandate to modernize financial infrastructure while supporting local commerce and industry.



Fiserv’s digital asset platform — introduced earlier this year alongside its FIUSD stablecoin — provides tokenized payment rails designed for interoperability and compliance with existing financial regulations.&nbsp;



Fiserv’s chief operating officer, Takis Georgakopoulos, said the project merges “the reliability of traditional finance and the innovation of blockchain” for faster digital payments. North Dakota Governor Kelly Armstrong emphasized the program’s role in keeping state banks competitive in a “new financial frontier.”



Although Roughrider Coin’s structure mirrors other dollar-backed stablecoins, details on custodial safeguards, audit frequency, and regulatory oversight were not disclosed.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

stablecoin

Bank of North Dakota and Fiserv to launch Roughrider Coin stablecoin

Coinbase announced on Wednesday that residents of New York can now stake cryptocurrencies including Ethereum (ETH) and Solana (SOL) directly on its platform, following regulatory approval from state authorities.



The move <a href="https://www.coinbase.com/blog/staking-is-now-available-in-new-york">restores</a> access to staking services for millions of New Yorkers, marking a significant change in one of the country’s most tightly regulated crypto markets.



Coinbase framed the approval as a milestone for financial inclusion, crediting Governor Kathy Hochul’s administration for providing clarity on staking programs. New York’s Department of Financial Services (NYDFS) has historically taken a strict approach to digital-asset activities under the BitLicense regime, which limited certain yield-based products.



Coinbase’s ability to relaunch staking in the state suggests a softening stance on services previously viewed as securities-adjacent under the U.S. Securities and Exchange Commission’s (SEC) Howey test framework.



The announcement comes after the SEC’s February 2023 enforcement against Kraken’s staking program, which led to a $30 million settlement and nationwide withdrawal of its service. Coinbase has maintained that its staking program differs because it merely facilitates network participation rather than pooling customer assets for profit.



The company recently prevailed in several state-level challenges, including dismissals in Illinois, Kentucky, and South Carolina, reinforcing its argument that staking-as-a-service is not a security.



New York’s approval could influence other states still restricting staking — Coinbase estimates residents in California, New Jersey, Maryland, and Wisconsin have lost over $130 million in potential rewards.&nbsp;



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Coinbase

Coinbase gains New York approval to offer crypto staking

Switzerland’s gambling authority Gespa has opened a preliminary investigation into FIFA’s sale of blockchain-based tokens that grant fans the right to purchase tickets for matches at the 2026 World Cup.



Bloomberg <a href="https://www.swissinfo.ch/eng/fifas-blockchain-based-ticketing-system-for-2026-world-cup-faces-preliminary-probe/90122003">reported</a> on Monday that the regulator is determining whether FIFA’s “Right to Buy” tokens constitute a form of gambling under Swiss law. Gespa director Manuel Richard said the offering “may be relevant under gambling legislation” and that further fact-finding will decide whether regulatory action is warranted.



The tokens, developed with blockchain firm Modex Tech Ltd., allow holders to buy tickets for specific matches once sales open. Some are tied to national teams, such as the $999 “Right to Final: England” token, which guarantees access to the final only if the chosen team qualifies.&nbsp;



The structure has raised questions about speculative behavior, since most buyers will not receive tickets if their teams fail to advance. FIFA reportedly earned around $15 million from these sales, <a href="https://www.nytimes.com/athletic/6609001/2025/09/08/fifa-collect-world-cup-tickets-2026/">according</a> to The Athletic.



The 2026 tournament — hosted across the U.S., Mexico, and Canada — is projected to generate $11 billion for FIFA.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

FIFA

FIFA faces Swiss probe over blockchain ticket tokens

The European Central Bank (ECB) has chosen technology providers to deliver core services for a potential digital euro.



In a notice <a href="https://www.ecb.europa.eu/press/intro/news/html/ecb.mipnews251002.en.html">published</a> on October 2, the ECB said it had signed framework agreements with firms responsible for alias lookup, fraud and risk management, app development, offline payments, and secure exchange of payment information. Service requests will first go to the primary provider in each category, with a second vendor available if needed.



Among the selected companies are Feedzai and Capgemini Deutschland for fraud management, Almaviva and Fabrick for app and software development, and Giesecke+Devrient for offline payment solutions. EquensWorldline and Senacor FCS were chosen for secure information exchange, while Sapient GmbH and Tremend Software Consulting are included in multiple categories.&nbsp;



One additional provider for offline services will be announced later, according to the note.



The ECB stressed that the agreements involve no payments at this stage and include safeguards to adapt scope in line with European Union legislation. A decision to issue a digital euro will only follow adoption of the Digital Euro Regulation, which remains under debate. Development of specific components will depend on future approval from the ECB Governing Council.



The initiative reflects the EU’s ongoing effort to create a central bank digital currency (CBDC) that could coexist with cash, improve payment efficiency, and reduce reliance on private stablecoins. Even if ultimately adopted, however, a digital euro may not be launched until the end of the decade.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

ECB picks providers for digital euro components

As the US government shutdown enters its second day, the crypto industry is left wondering how the closure will impact pending regulatory matters.



Currently in limbo: the crypto market structure bill, the status of GENIUS Act policies, and the timeline for approving certain spot crypto ETFs.



<h2 class="wp-block-heading">Spot crypto ETFs&nbsp;</h2>



Perhaps the most direct impact the government shutdown is expected to have on the crypto industry is that new spot crypto ETFs will be delayed.&nbsp;



The Securities and Exchange Commission <a href="https://www.sec.gov/files/sec-plan-operations-during-lapse-appropriations.pdf">said</a> that during the shutdown, staff will not review or approve registration statements or issue notices of effectiveness.&nbsp;



An “extremely limited number” of SEC staff will be monitoring emergency email addresses and phone lines for each commission division, the guidance added. An &#8220;emergency” would be anything that immediately threatens market stability, personal safety or property protection.&nbsp;



One crypto ETF issuer told Blockworks that prior to the shutdown, they were feeling confident about listing on Monday, Oct. 6.&nbsp;



But now things are up in the air.



<h2 class="wp-block-heading">Crypto market structure bill&nbsp;</h2>



Despite the shutdown, members of the Senate Banking Committee plan to work on the market structure bill that is due for a markup, according to a person familiar with the matter.&nbsp;



Lawmakers originally wanted to hold a markup hearing for the Responsible Financial Innovation Act of 2025 at the end of September, Blockworks <a href="https://blockworks.co/news/senate-september-market-structure-bill">previously reported</a>, but the failure to pass an appropriations bill delayed this timeline.&nbsp;



Senate Banking Committee Republicans in September finalized the bill draft, expanding upon the House’s CLARITY Act, which passed in July.&nbsp;



The industry is still waiting for the Senate Agriculture Committee — which oversees the Commodity Futures Trading Commission — to release its version of a market structure bill.&nbsp;



A person familiar with the matter told Blockworks ahead of the shutdown that the Agriculture Committee’s draft was “close” but market structure legislation is proving to be more complicated than stablecoin rules.&nbsp;&nbsp;



Should the Senate Banking Committee move forward with a market structure bill markup mid-shutdown, they wouldn’t be the only Committee proceeding with crypto business as scheduled.&nbsp;



On Wednesday, in the first hours of the shutdown, the Senate Finance Committee held a hearing on crypto tax policy.&nbsp;



In his opening remarks, ranking member Sen. Ron Wyden said that while cryptocurrency taxation is an important issue Senators need to “get right,” holding the hearing yesterday showed a “warped sense of priorities.”&nbsp;



Senate Finance Committee Chairman Mike Crapo said the budget debate will continue, but updating the tax code should be a primary concern for lawmakers.&nbsp;



“Without clear tax rules, taxpayers are left with many unanswered questions and individuals, businesses and our country’s finances bear the burden,” Crapo said. “Lingering tax uncertainty also makes the U.S. a less attractive place to do business and invest, and hurts tax compliance.



<h2 class="wp-block-heading">GENIUS Act&nbsp;</h2>



Stablecoin legislation, as it turns out, may not be as straightforward as lawmakers originally believed.&nbsp;



The GENIUS Act became law in July, but that was only step one. The bill lays out a general framework, but it delegates responsibilities to federal and state regulators, who are now tasked with writing and issuing new rules. These include licensing requirements, enforcement processes, AML procedures, etc.&nbsp;



It’s going to take a long time, and we knew that prior to the shutdown, but with agencies currently operating with skeleton crews, designing stablecoin policy is not a top priority.&nbsp;



Plus, the lobbying around stablecoin legislation didn’t stop when President Trump signed the GENIUS Act. Big banks and crypto companies — mostly exchanges — are still at odds over rules surrounding stablecoin yields, and both sides are prepared for an expensive fight, according to a person familiar.&nbsp;



The GENIUS Act stipulates that no stablecoin issuers can offer any yield or interest on holdings. It prohibits issues from offering yields directly, but does not block exchanges, or “affiliates,” from doing so.&nbsp;



Banks weren’t happy about this language, but the crypto industry, especially Coinbase, was.&nbsp;



Back in March, when GENIUS Act negotiations were underway, Coinbase CEO Brian Armstrong emphasized the need for allowing interest payments on stablecoins.&nbsp;“We can choose to level the playing field and ensure these laws pave a way for all regulated stablecoins to deliver interest directly to consumers, the same way a savings or checking account can,” Armstrong wrote in a <a href="https://x.com/brian_armstrong/article/1906723887112401179">post</a> on X.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Capitol Gains: Shutdown blues slow crypto work

Roman Storm, co-founder of the cryptocurrency tumbling protocol Tornado Cash, filed a motion for judgment of acquittal in the Southern District of New York on Sept 30.



A federal jury convicted Storm earlier this year of operating an unlicensed money-transmitting business, while jurors deadlocked on money laundering charges and acquitted him on sanctions violations. His legal team now seeks to overturn the conviction entirely, with oral argument scheduled for Dec 18.



In a 103-page memorandum, reviewed by Blockworks, Storm’s defense counsel argued that Tornado Cash is permissionless, immutable software that Storm did not control once deployed. They said the Department of Justice improperly relied on a negligence theory, claiming Storm failed to stop criminals from using the tool, despite lacking both legal duty and technical ability.



The filing contends that labeling software publication as a financial “business” violates constitutional free speech protections, invoking both the First Amendment and the Berman Amendment, which shields the distribution of informational materials from sanctions enforcement.



Storm’s lawyers also challenged the venue, saying alleged New York connections — such as Infura payments, email communications, and Telegram messages — were legally insufficient.&nbsp;



On the substantive charges, they argued that Tornado Cash did not transmit funds, Storm did not enter into a money laundering agreement, and open-source code cannot be equated to providing a sanctions-barred service.



The government has until Oct 31 to file its response to Storm’s motion, per the court documents. Both parties also agreed to pause any potential retrial motions — which the government could pursue on the hung money laundering count — until the acquittal motion is resolved.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>