The Daily: Vanguard explores offering access to crypto ETFs, regulators probe suspicious stock trades ahead of DAT purchases, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Friday! Bitcoin briefly slipped below $109k into the U.S. PCE print before bouncing back after the data landed as expected. Still, the week's tone is defensive: spot ETFs saw outflows, leverage was flushed, and analysts say bulls need to reclaim the $113k–$116k zone with volume to flip the script.

In today's newsletter, Vanguard explores offering crypto ETF access to brokerage clients, regulators probe suspicious stock trades made ahead of crypto treasury announcements, SEC Chair Paul Atkins responds to crypto conflict of interest concerns, and more.

Meanwhile, Swift reportedly experiments with onchain migration using Ethereum Layer 2 Linea.

Let's get started!

P.S. Don't forget to check out The Funding, a biweekly rundown of crypto VC trends. It's a great read — and just like The Daily, it's free to subscribe!

Vanguard explores offering access to crypto ETFs

Vanguard is reportedly weighing whether to let brokerage clients access third-party crypto ETFs, potentially reversing its long-held policy of rejecting digital asset products, a source told Crypto in America.

• In January 2024, when the first spot bitcoin ETFs launched in the U.S., Vanguard famously stated that it wouldn't offer access to the new asset class, citing its high volatility as detrimental to generating long-term returns — a policy it had continued to reiterate since.
• However, the $10 trillion asset management giant has faced growing client demand amid shifting regulatory winds under the Trump administration and new SEC leadership, the source said.
• Timing and product choices are yet to be decided, the person added, confirming Vanguard still has no plans to launch a crypto ETF product of its own.
• Bloomberg ETF Analyst Eric Balchunas called the move smart, noting the bitcoin and ether ETFs' huge popularity and Vanguard's reach across 50 million U.S. investors.
• "We heard chatter of this too," he said. "Vanguard is looking to end bitcoin ETF ban (aka bend the knee lol)."

Regulators probe suspicious stock trades before crypto treasury announcements

The SEC and FINRA are investigating unusual stock trading activity before digital asset treasury firms announced plans to purchase cryptocurrencies, the WSJ reported, citing sources familiar with the matter.

• Regulators flagged sharp price jumps and high trading volumes ahead of the announcements as potential red flags.
• SEC officials reportedly cautioned some companies about possible Regulation Fair Disclosure violations tied to selective information sharing.
• The probes come as crypto treasury strategies surge, with more than 200 DATs running the Michael Saylor-inspired playbook and raising over $20 billion so far this year.

SEC Chair Atkins responds to crypto conflict of interest concerns

During a Financial Markets and Policy conference at Georgetown University, SEC Chair Paul Atkins said the agency will enforce laws and investigate conflicts of interest in crypto "where necessary," declining to address specific companies or individuals.

• His comments come amid scrutiny of the Trump family–linked DeFi project World Liberty Financial and its ties to UAE firm MGX, Binance, and the USD1 stablecoin, particularly from Democratic lawmakers.
• Atkins has broken from predecessor Gary Gensler by pursuing a friendlier stance toward crypto, including an "innovation exemption" to fast-track onchain products by year-end.
• He also launched a "Project Crypto" initiative to modernize SEC rules, clarify what qualifies as a security, and provide lawyers and firms greater regulatory certainty.

DeFi protocol Hypervault vanishes after $3.6 million suspected rugpull

• Around 752 ETH, worth nearly $3 million, was later funneled into crypto mixer Tornado Cash — a move often associated with rug pulls.
• Hypervault's website also went offline, and its X account was deleted, adding to exit scam suspicions.
  The project had marketed its "unmanaged," auto-compounding vaults, and modular yield strategies before abruptly vanishing.

Korean actor handed suspended prison term for embezzling $3 million to invest in crypto

Famous South Korean actor Hwang Jung-eum received a two-year prison sentence, suspended for four years, after embezzling $3 million from her own management agency to invest in crypto.

• Prosecutors said she diverted funds 13 times in 2022, using most for crypto and the rest for taxes and personal expenses.
• The court gave leniency after Hwang fully repaid the money and cited her clean record as a first-time offender.

Looking ahead to next week

• UK GDP data are out on Tuesday. Eurozone CPI figures follow on Wednesday. U.S. jobless claims numbers are due on Thursday. U.S. nonfarm payrolls follow on Friday.
• ECB President Christine Lagarde will speak on Tuesday and Friday. Bank of England Governor Andrew Bailey also speaks on Friday.
• Artificial Superintelligence Alliance, Jupiter, Optimism, 1inch, Sui, dYdX, EigenLayer, and Ethena are among the crypto projects set for token unlocks.
• TOKEN2049 kicks off in Singapore.

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