The platform said on Thursday that users can claim one DFX token for every USDT lost. Holders then have the option of redeeming and burning their DFX for USDT from Drift's recovery pool, selling them on the secondary market, or holding them to wait for more recovery funding.

The latter option will theoretically get a user closer to full reimbursement, because as tokens are burned, newer deposits are divided among fewer DFX.

For now, each DFX can only be redeemed for a little over 0.01 USDT, the rough equivalent of getting back one cent for every dollar lost.

On Friday, Velocity's DFX redemption and recovery dashboard showed that 216,480 DFX had been redeemed for roughly 2,250 in USDT payouts. The total pool stands at 3.11 million USDT, comprised of protocol assets. Velocity will also sweep between 60% and 90% of its net protocol revenue into the recovery pool, though after the first day, that has amounted to just 31 USDT.

The dashboard had not yet recorded a contribution from Tether, which committed up to $127.5 million to support the relaunch and user recovery. Also not yet reflected was the up to $20 million pledged by strategic partners.

Asset recovery updates

In a Sept. 30 update, the Drift Foundation said that roughly $295.4 million was stolen in the April 1 attack. Cybersecurity firm Mandiant identified the hacker as UNC6862, a "North Korean threat group."

The stolen assets were bridged to Ethereum, with three attacker wallets still holding 107,165 ETH worth nearly $286 million. A fourth wallet previously moved 23,094 ETH through crypto mixer Tornado Cash in July.

About $9.2 million of the stolen funds have been frozen so far, according to the foundation, which will ideally go into the DFX recovery pool once cleared by law enforcement.

The project now has a little over $32 million in total value locked, according to DeFiLlama, down sharply from more than $2 billion in TVL ahead of its February 2024 mainnet launch.

"We launched Blast with the goal of building a self-sustaining chain for users and developers. Unfortunately, the economics of operating the chain no longer make sense," the project wrote Friday in a post on X. "The ongoing costs of maintaining Blast exceed the revenue generated by the L2, and we do not see a credible path to making the chain economically sustainable."

Blast aimed to provide native yield for ETH and stablecoins, with returns generated through ETH staking and real-world asset protocols and automatically distributed to users.

The project is asking users to withdraw their assets to Ethereum mainnet. Blast said it will first begin withdrawing its Lido assets, a process expected to take about a week, during which withdrawals will be temporarily unavailable. Once that process is complete, withdrawals will resume with a 24-hour delay, and users will be able to withdraw through Blast’s normal interface until Oct. 26. After that date, users will need to interact directly with Blast’s bridge contracts on Ethereum.

Blast went live in November 2023 following a $20 million funding round led by Paradigm and Standard Crypto. The project exceeded $2 billion in TVL from nearly 200,000 early-access users ahead of its mainnet launch.

The BLAST token fell 17% on Friday, reducing its market capitalization to around $23 million.

Bitcoin was changing hands near $86,700 at the time of writing. In a market note on Friday, analysts at QCP Capital said the foremost cryptocurrency had broken out of the $82,500 to $85,700 range it traded in over the past week, topping $87,000 earlier on Friday — its highest level since Sept. 23, putting bitcoin 14.6% above its Sept. 15 low of $74,968 and nearing its best price since January.

The next group of sell orders sits around $87,000, Glassnode said, with about half as many at that level compared to the old $85,000 wall.

Bitcoin approaches September high

QCP put resistance at $87,400 and support at $82,500, with bitcoin holding the lower level three times this week. Resistance at $87,400 is the "gateway to $90,000," the analysts said.

Bitcoin rose 12% in September, QCP noted, while gold fell 8.5% during a month in which the 10-year inflation-protected Treasury yield rose about 44 basis points, while long-term inflation expectations barely moved. The firm said bitcoin's rally appeared “more consistent with a concentrated flow trade" rather than a pure debasement narrative or a broad rejection of the bond sell-off. U.S. spot bitcoin ETFs recording about $2.6 billion in September and the Securities and Exchange Commission's innovation exemption were catalysts, in the analysts' view.

The market is now positioning for the post-election period, QCP said, with options positioning showing clients rolling October $90,000 calls into November, the month containing midterms, Treasury refunding, and the December Fed meeting.

Weaker-than-expected U.S. jobs data

Meanwhile, U.S. employers added 29,000 jobs in September, according to nonfarm payrolls figures released Friday, below the 84,000 to 93,000 QCP had expected. The unemployment rate rose to 4.2% from 4.1%.

"Weak print strengthens the no October hike scenario, but weak is not automatically bullish: soft-but-orderly supports the liquidity trade, a growth scare pulls risk assets, bitcoin potentially included," Sygnum Bank Chief Investment Officer Fabian Dori told The Block. "Liquidity stays the driver either way."

Paul Howard, senior director at crypto market maker and OTC liquidity provider Wincent, told The Block that his expectation for bitcoin to break $100,000 by the end of the year remains intact, particularly following Citi's recently revised $113,000 price target.

"In the near term, I expect BTC to continue oscillating around the $85,000 level, but a sustained break above $90,000 could open the door to a stronger move higher, with relatively limited resistance beyond that point," Howard said.

"Uptober is off to a strong start," 21Shares Senior Crypto Research Strategist Matt Mena noted. "Q4 is historically Bitcoin's best quarter, averaging 62.7% gains, and the stage is set for a strong year-end close," he said.

During an interview with The Block at Korea Blockchain Week 2026, Belshe said BitGo had supported the bill and wanted it passed. The Senate rejected a motion to proceed on the Clarity Act on Sept. 15, failing to win over 60 votes needed to advance the bill.

The BitGo CEO said firms are building one-stop shops that cover trading, brokerage, and custody without the market structure to mitigate risks. He pointed to Coinbase (COIN), which recently received a derivatives clearing organization (DCO) license on top of an existing futures commission merchant (FCM) license and its exchange.

Lehman, only worse

“Exchanges have never held custody, never, of anything,” Belshe said. “And they certainly didn’t hold custody of the world’s most dangerous asset, the bearer asset, the one where if you lose the private key, you lose money.”

At a time when every player is going digital, firms becoming the one-stop shop will be the "preeminent heart" of the market, Belshe said. A custody failure there, he said, would not stop at the firm: “the entire market goes down.”

Regarding counterparty credit risk, Belshe compared the same "one-stop-shop" setup to the 2008 failure of Lehman Brothers, only worse. The broker-dealer failed because it could not see its own exposure, Belshe said, but the financial system survived its collapse.

"Imagine if that had been the New York Stock Exchange offering those services and the whole New York Stock Exchange went down. As devastating as the 2008 crisis was, we survived it. But if it had been New York's stock exchange going down, I don't know if we would have."

Belshe highlighted that the cost of not having clarity is that there is no market structure to mitigate such risks.

"Without solving clarity for really relatively small and petty political differences, the legislature decided to put the American capital markets at risk," Belshe stressed.

The BitGo CEO further said that the firm can operate without the law, as the firm has managed crypto for 13 years with "a target on our back." Banks and other traditional firms, which he described as BitGo’s strongest potential competitors, will move more slowly because they fear a return of Operation Chokepoint 2.0.

AI and stablecoins

Meanwhile, Belshe also shared his views on Maelstrom CIO Arthur Hayes' argument on stage at Korea Blockchain Week that stablecoins and other digital currencies cannot be a native currency for AI agents because they do not convert directly into compute.

"So I wouldn't count that out entirely, but I think it's a little bit far away, and it's not like both of these things can't exist," Belshe said. "You could end up with agents that are paying each other in some sort of value that the agents decide is good, but they're still going to interface to with human system."

The BitGo CEO said he believes humans are going to be controlling AI for much longer than what AI "doomers" are predicting. Humans are going to have agents working for them, and they are going to use a "human-type of interface" based on the dollar or other existing currencies.

One option would have the central bank issue reserves directly on a programmable platform. In another, the ECB’s existing real-time gross settlement system would remain in place, with an interoperability layer connecting it to DLT platforms, according to Schnabel's presentation. The reserves would not themselves be tokenized, but the two systems would be linked by hash.

The third approach would tokenize reserves held at the central bank and issue settlement tokens fully backed by those reserves. Those tokens would be private claims, rather than claims issued directly by the central bank, per the presentation.

Schnabel also addressed how an onchain monetary system could retain the two-tier structure used today. Central bank money would remain at the core of settlement, while commercial banks would continue to provide money and financial services to customers.

That structure would put central bank money on DLT infrastructure alongside tokenized financial assets, including securities and deposits, as well as stablecoins.

UK financial institutions on tokenization

The ECB's framework comes as financial institutions increase their focus on tokenization. Some 71% of senior decision-makers at the UK’s largest financial institutions expect tokenization to reshape financial services, according to Lloyds’ 10th annual Financial Institutions Sentiment Survey shared with The Block.

Faster payments and settlement were cited as the biggest potential benefit by 60% of respondents, followed by collateral and liquidity management at 41%. Some 77% said investment in new and emerging technologies is a growth priority, up from 41% in 2025.

“The real opportunity is to make financial markets work faster, more efficiently and with greater flexibility for clients,” Rob Hale, co-head of global markets at Lloyds, said. He cited faster settlement, more efficient use of collateral, and better movement of liquidity as tangible benefits.

On ECB's part, Schnabel said tokenization can make financial transactions more programmable and atomic, allowing the transfer of an asset and its payment to occur together. Tokenized infrastructure could also allow financial assets and money to interact directly on the same or connected DLT networks.

The ECB has already begun putting that framework into practice. Its Pontes project launched last month to provide tokenized central bank money for DLT-based transactions, while its Appia project is examining different architectures for tokenized markets.

Appia is considering a unified ledger, interconnected networks, and multiple shared ledgers.

According to SoSoValue data, September's inflows were down from $3.52 billion in August but remained well above levels seen throughout the past year. Spot ether ETFs also drew $832.43 million in September, compared with $1.85 billion in August. The September total was their second-largest monthly inflow since August 2025.

Bitcoin ETF inflows have continued on the first day of October, reporting $102.7 million. Ether ETFs, on the other hand, shed $55.4 million.

Dominick John, analyst at Zeus Research, told The Block that the ETF inflows suggest that institutional demand "has not faded," pointing to a more sustained recovery.

"With the Q4 bottom seemingly established, continued ETF inflows also signal improving market sentiment and a potentially more bullish setup heading into the final quarter," said John.

Bitcoin (BTC) climbed 3.1% over the past 24 hours to $86,626 as of 1:00 a.m. ET Friday, while ether (ETH) rose 1% to $2,735, according to The Block's price page.

The Crypto Fear & Greed Index stood at 69 in greed territory, "suggesting sentiment has strengthened without reaching extreme levels," said John.

John also said that traders will continue to watch ETF inflows for signs of sustained institutional demand, alongside key U.S. economic data. "The Oct. 8 jobless claims report will offer another read on the U.S. labor market, while inflation data and Fed commentary could shift rate expectations," he added.

Johann Kerbrat, Robinhood's senior vice president and general manager of crypto and international, said in an interview with The Block at Korea Blockchain Week 2026 that Robinhood is still working through the SEC order, which he described as a long document that set limits on volume and on which assets can be tokenized.

"We're still trying to understand all the parameters of it," Kerbrat said. "There are limitations on the volume, and what type of assets we can tokenize. If you look at our volume on our stock tokens, it's already pretty high and will hit some of its limits."

On Sept. 17, the SEC issued a five-year exemption that allowed certain U.S. venues to trade tokenized versions of listed stocks without registering as exchanges, subject to caps on symbols and volume and a requirement that the tokens carry the same rights as the underlying shares. 

"Overall, I think what is really important from this signal with the exemption is that the SEC wants to work toward tokenization and understand the advantage of it," Kerbrat said. "So we're really continuing to push toward more adoption of stock tokens and also a broader coverage of U.S. stocks and ETFs."

Stock tokens

Robinhood’s Stock Tokens, issued as debt securities by a Jersey-based entity, are available in more than 120 countries through Robinhood Wallet, but are not offered to U.S. users. The SEC order covers tokenized National Market System stocks that carry the same rights as the underlying shares, and it requires venues to notify issuers, who can object.

Kerbrat and Robinhood CEO Vlad Tenev both said earlier this month that they will bring in-kind redemption and voting rights to stock tokens. Kerbrat told The Block that these were planned before a public dispute with AMC Entertainment CEO Adam Aron, and that in-kind redemption was discussed at a July 1 event in London.

"Some of the criticism from the AMC CEO, if you look at it, it's mostly a marketing stunt," he said. "We stand behind the legal structure of our systems." The AMC chief executive had criticized Robinhood's stock tokens last month as illegal offerings and said the company had not consented to them.

US perp futures

Meanwhile, Robinhood is bringing crypto perpetual futures (perps) onshore, as announced on Sept. 29. It plans to enable perps trading in the U.S. for eight cryptocurrencies — BTC, ETH, SOL, XRP, DOGE, ADA, LINK, and HYPE.

"The way it works is that you have this waterfall clearing system that is global, that some of the venues that are launching, for example with Kalshi, did not really support. That's really the main aspect," Kerbrat said, adding that it also recalculates funding rates constantly on the exchange, whereas competing platforms recalculate them every 15 minutes.

The 10x leverage on bitcoin (BTC) and ether (ETH) and 3x on six other tokens was Robinhood's own choice, Kerbrat explained. Raising the leverage limits in the U.S. is "TBD," he added, depending on how users trade and how liquidity develops.

Kerbrat declined to outline a 2027 U.S. derivatives list, but mentioned that in Europe, commodity and ETF perpetuals have drawn interest. He said Robinhood has no single-stock perpetual plans to announce, and pointed to the firm's options business as the place where customers already build multi-leg strategies.

The Foundation built zkAPI with the Open Anonymity (OA) Project, an open-source AI privacy effort, and it is live on Ethereum mainnet, the Foundation said in a blog post.

"Every AI API call today carries an identity," the post said. "Your API key points to an account, the account to a payment method, and every prompt you send joins the record attached to both. The provider can connect years of your usage into a single profile."

"It's like a generalization of OA unlinkable inference that also abstracts payments away," Ken Liu, a Stanford computer science PhD candidate who works on the Open Anonymity Project, said in an X post on Thursday afternoon. He added that "more infrastructure should exist where privacy and sovereignty is foundational and people are in control."

How zkAPI works

To use zkAPI, users must first deposit tokens such as ETH (ETH) or USDC into a vault contract on Ethereum, which records the user's balance as a private note, according to the post. To spend the tokens, software on the user's device generates a zero-knowledge proof which shows that its request is backed by a funded note, though it does not reveal which note or deposit funds it.

A zkAPI server checks the zero-knowledge proof and issues a temporary API key with a spending cap. The user then sends their prompts directly to the AI model provider along with that key, and when it expires, the server deducts the usage from the user's private balance.

A serial number called a "nullifier" is also published each time a user pays for AI usage. "A user who tries to spend the same balance twice produces a duplicate nullifier, which exposes the attempt and nothing else," the post states. 

The client works with existing AI tools, per the post. "The client exposes the standard OpenAI and Ollama APIs on your own machine," the post states. "Existing apps, editors, and chat clients work by pointing them at localhost."

Use cases and limitations

The post lists AI chat and agents as the first use case. Other listed applications include blockchain RPC queries, image and video generation, VPN bandwidth and machine-to-machine payments between AI agents.

The zkAPI system does not provide network anonymity, however, according to the post. The gateway can potentially correlate requests sent from a stable IP address, and users seeking stronger privacy may route traffic through Tor, an anonymity network that relays traffic through several servers and is commonly used by so-called "dark web" sites, per the post. 

Sessions can also be re-linked through the content of prompts, such as personal details, writing style or conversation history. The zkAPI project's GitHub repository describes the protocol as experimental.

Design co-authored by Vitalik Buterin

zkAPI implements "ZK API Usage Credits," a design Davide Crapis and Ethereum co-founder Vitalik Buterin published on the Ethereum Research forum on Feb. 11.

Crapis leads the Ethereum Foundation's dAI team, which the Foundation formed in September 2025 to improve Ethereum's capabilities as a settlement and coordination layer for AI. The team also developed ERC-8004, a standard for AI agent identity that launched on mainnet in January.

The blog post announcing zkAPI was written by Vittorio Rivabella of the dAI team.

Buterin pointed to cryptographic payment mechanisms for AI services as part of his near-term vision for Ethereum's role in AI in a February X post.

"Since the advent of Bitcoin in 2008, the crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure," SEC Chairman Paul Atkins said in a release. "Unfortunately, our rules and regulations have not kept pace."

The proposal would address a key gap for institutional investors, where qualified custodial infrastructure for some crypto assets may not yet exist. It would also permit crypto assets to be held in self-custody under certain circumstances and allow state trust companies to serve as custodians for client and regulated fund crypto assets. This is important for asset managers, hedge funds, and others who want to hold bitcoin and other crypto assets directly rather than through an ETF or another intermediary.

The proposal would also allow advisers to "self-custody" client and regulated fund crypto assets under limited circumstances, including when the adviser determines that no permitted custodian is available. SEC Commissioner Hester Peirce clarified that the term refers to advisers acting as custodians for client assets, rather than investors directly controlling their own crypto.

"True self-custody is not the right choice for everyone, but many crypto owners prize being able to custody their own assets," Peirce said in a statement. "Regulators should zealously protect investors' right to self-custody and not attempt to force investors to custody their assets with someone else. But I digress."

The public comment period will remain open for 60 days.

"More regulatory proposals are on the horizon, and I look forward to continuing to help President Trump cement the United States as the crypto capital of the world," Atkins said.

The announcement comes as both the SEC and Commodity Futures Trading Commission have accelerated efforts to establish crypto regulations after the Clarity Act failed to pass the Senate. In the days that followed, the SEC released its long-awaited innovation exemption while the CFTC filed crypto asset rulemaking with White House.

"Moving quickly & aggressively," NovaDius President Nate Geraci wrote Thursday in a post on X. "Some politicians are going to wish they passed the Clarity Act."

HPC urged the Commission as such in its response to the Commission's MiCA review, which opened on May 20. The EU's executive body later pushed the deadline from Aug. 31 to Sept. 30, and several crypto and banking firms filed responses in the last few days of the submission period.

"The Consultation arrives at a defining moment for financial markets, as public blockchains now serve as infrastructure for markets
that trade continuously and in substantial volume, and regulators in several jurisdictions are working through how regulated products can use them," HPC wrote in its response. "We believe the existing EU frameworks can accommodate onchain products and markets through targeted action without a wholesale revision of their rules."

USDC issuer Circle used its submission to the same MiCA review to go after the regulation's stablecoin reserve rules.

"Of the top 25 stablecoins globally by market capitalisation, only three are currently MiCA-regulated (USDC, USDG, EURC)," Circle wrote in a blog post describing its submission. "This suggests the current gap is not in the supply of new regulated issuers, but in MiCA's perimeter capturing the largest global tokens, and in EU-issued [e-money token issuers] growing at global scale."

HPC wants perpetual futures regulated under MiFID II

The Washington-based HPC was set up in February and funded with 1 million HYPE tokens, then worth about $29 million, from the Hyperliquid Foundation. Its blog post describing the response says the EU response is its first filing outside the U.S.

The filing's first point: The classification of financial instruments "should follow the economic features of an instrument, and the ledger on which it is recorded should not be determinative," HPC CEO Jake Chervinsky wrote in the letter, dated Sept. 30. In other words, perpetual futures ("perps") should be regulated under MiFID II, even though they generally run on onchain trading venues.

The group argues MiFID II's Annex I derivative categories already capture perps, so no new law is needed. "Clarity in application, rather than new legislation, is what would assist in regulating perpetual futures," HPC wrote.

HPC also doesn't want perps lumped in with contracts for difference, or CFDs, which ESMA restricted for retail traders in 2018. With a CFD, "the provider profits when its client loses," the filing said, while on a perps order book, the trading venue isn't itself the counterparty.

HPC asked the Commission to require that trading venues publish funding methodologies, maintenance margins and liquidation thresholds ahead of time. The group also wants the Commission to confirm that putting a regulated product on a public blockchain doesn't, by itself, change the product's classification.

The filing points to Hyperliquid's own HIP-3 markets as an example. A regulated firm "can build a market on that infrastructure," set leverage limits and restrict access through an onchain allowlist, then "offer that market to its clients as a regulated product," HPC wrote.

At one point in late July, HIP-3 markets accounted for 75% of Hyperliquid's overall trading volume, per The Block's data, though that number has since fallen to roughly a quarter of the overall volume in recent weeks.

Back in August, HPC made a similar pitch to the SEC and CFTC to classify perpetual contracts by economic structure.

"The product category has been commercially dormant for many years, though U.S. exchanges returned to it this summer, and its framework will need modernization for new product structures," HPC wrote at the time. 

Circle wants looser reserve rules

Circle (CRCL) has issued its dollar-pegged stablecoin (USDC) and its euro-pegged EURC in the EU through its French entity since July 2024, and calls itself the largest e-money token (EMT) issuer authorized under MiCA. Patrick Hansen, Circle's director of EU strategy and policy, laid out the company's submission in a Thursday blog post.

Circle declined to share the full filing with The Block. "We'll let the blog speak for itself," Greg Vadala, Circle's senior director of global corporate communications, said in an email.

Circle's main target is MiCA's bank deposit floor. Right now, EMT issuers have to keep at least 30% of their reserves in commercial bank deposits, and 60% if the European Banking Authority deems the token "significant," a label reserved for the largest coins.

That rule "increases exposure to the credit and counterparty risk of the banking sector," Circle wrote. Circle knows that risk firsthand: USDC briefly lost its $1 peg in March 2023 after the company disclosed $3.3 billion of its roughly $40 billion in reserves was sitting at Silicon Valley Bank, which had just gone under.

Here, Circle has the European Central Bank on its side. The ECB and the national central banks that make up the European System of Central Banks also called for scrapping the deposit minimums in their response, proposing instead that a set share of reserves mature within one and five working days. Circle wrote that it "concur[s] with the ECB" that the floor should give way to a "less rigid minimum asset liquidity requirement."

Circle also wants two limits from the EBA's technical standards (the detailed rules written to implement MiCA) thrown out. One caps exposure to any single government at 35% of reserves, which Circle said makes it "impossible" for dollar-denominated tokens to hold mostly sovereign debt like U.S. Treasurys.

The other caps an issuer's exposure to any one bank at 1.5% of that bank's total assets. Under that limit, big issuers would need reserve relationships with "dozens of separate banks," per Circle.

Circle's other priority is protecting multi-issuance, where a MiCA-authorized EU entity and a foreign-regulated affiliate co-issue the same global stablecoin. According to Circle, that's currently the only way tokens like USDC can operate inside MiCA at all.

"Restricting multi-issuance would simply relocate that usage outside the EU's regulatory perimeter," Circle wrote, pointing to the Commission's own 2020 impact assessment for MiCA. Per Circle, that assessment warned a ban on foreign stablecoins would send EU users to offshore providers without MiCA's protections.

The ESCB, meanwhile, said in its response that MiCA needs "legal clarification" on whether third-country multi-issuer schemes are permissible in the first place.

Other responses

German exchange operator Deutsche Börse Group filed on Sept. 29. It proposed a separate category for "settlement EMTs" used as the cash leg in regulated settlement systems, warning that "settlement fails can cascade." Earlier this year, Deutsche Börse announced a $200 million strategic investment into Payward, the parent company of the exchange Kraken.

Tech industry group Chamber of Progress filed on Sept. 30. It said consumers should be able to earn rewards on e-money tokens, which MiCA's interest ban currently restricts, and backed keeping multi-issuance with enforceable EU redemption rights.

"Withdrawing EIP-8363 from consideration for Hegotá," co-author Jérôme de Tychey, president of Ethereum France, wrote in an X post on Thursday morning.

De Tychey said several industry participants, as well as core protocol and client contributors, argued during Hegotá's Consideration for Inclusion (CFI) process that "a fork scoping exercise was not the right venue to settle an issuance policy change."

"We agree and we'd rather acknowledge this now than carry on towards Hegotà in this context," he wrote, noting that the proposal had become "one of the most commented-on EIPs in the history of the Ethereum-Magicians forum." 

The authors committed to a separate process for determining questions of Ethereum's issuance policy. De Tychey thanked liquid staking protocol Lido for offering to help steer it.

A separate, dedicated process

De Tychey grouped the objections raised since August into five categories: security, industry impact, the design of the burn curve, the makeup of the validator set and the effect on solo stakers.

To determine how to proceed with tackling the issues, de Tychey attached a timeline for what he called a "multi-node process." It starts with an issuance forum at Devcon in November, following a first roundtable at EthCC 2026.

Workshops would follow after Devcon and in February and March, with a tentative forum at a Columbia University cryptoeconomics workshop in January.

The schedule ends with a forum at EthCC in April, where the authors aim to engage core developers and reach CFI or Scheduled for Inclusion (SFI) status for a proposal.

De Tychey said the authors stand by the proposal's motivation. He quoted the EIP's view that a very high staking ratio threatens "Ethereum's security, neutrality and resistance to capture" as well as "ETH's role as money."

The proposal

Researchers including the Ethereum Foundation's Justin Drake, Pintail, de Tychey, dapplion, pa7x1 and Ladislaus von Daniels proposed the "Tapered Issuance Burn" on Aug. 4, days before Hegota's deadline for non-headliner EIPs.

Under the EIP, the share of rewards burned would climb with the total level of staked ETH and would reach 100% at about 60.25 million ETH, or roughly half of the supply. The change would phase in over about 18 months.

About 34% of ETH supply was staked in mid-August, The Block reported at the time. At that level, annual consensus yield would fall from about 2.6% to 1.2% under the proposal.

Industry reaction

SharpLink CEO Joseph Chalom formally opposed the proposal in August, saying it would "undermine DeFi." Aave founder Stani Kulechov called it "hurtful for Ethereum" at the time.

On Thursday, Kulechov quote-posted de Tychey's announcement of the withdrawal, saying "Great move."

Developers are still scoping Hegota, an upcoming Ethereum hard fork, which will follow the next update, Glamsterdam. On Sunday, Ethereum co-founder Vitalik Buterin outlined his vision for the future of Ethereum in a blog post, and said Hegota "is likely to be Ethereum's last 'normal' fork, with features and technology that would be recognizable to someone in 2015."

"Everything after that involves recursive STARKs, automated formal verification, highly optimized consensus algorithms, and making it all quantum-safe," Buterin wrote. 

The transaction is expected to raise about $300 million in gross cash proceeds, while investors have contributed XRP in kind, leaving Evernorth expected to hold roughly 473 million XRP at closing.

Evernorth joins spot XRP ETFs as a regulated route to XRP exposure. The deal is expected to close Oct. 7, with the combined company set to trade under the ticker XRPN beginning Oct. 8.

"Going public will offer investors a regulated, transparent way to own XRP exposure and participate in the growth of the blockchain economy," Evernorth CEO Asheesh Birla said in a release. "We're grateful to our shareholders for their support as we complete this important transaction."

Evernorth's investors include Arrington Capital, SBI Group, Ripple, Pantera Capital, Kraken, and GSR.

Stacked Crypto Holdings Value in USD by DATs (Per Asset)

Evernorth first filed the S-4 registration for the $1 billion SPAC deal back in March. Around the same time its registration became effective in August, Evernorth Chief Business Officer Sagar Shah said a new proposal could give the XRP Ledger native lending functionality while reducing smart contract risks.

Ahead of the in-kind contributions expected at closing, Evernorth currently holds approximately 347 million XRP tokens, according to BitcoinTreasuries data. At current prices, that's worth about $512 million.

XRP (XRP) trades around $1.48 at publication time, giving it a market capitalization north of $93 billion. XRP finished the third quarter more than 40% higher.

In an X post, the team said the incident was caused by a bug in how its Omni deposit and withdrawal infrastructure interacted with the NEAR Intents smart contract.

It pledged to fully compensate the lost funds.

The contract vulnerability has been patched, and the team said NEAR Intents and Near.com were expected to open back up operations within an hour. However, deposits and withdrawals on 11 blockchain networks, including BSC, Polygon and Optimism, would be unavailable for roughly another 12 hours.

In his own post on Telegram, blockchain investigator ZachXBT said the protocol's BSC hot wallet showed irregular outflows and that the stolen funds were transferred to the KuCoin exchange and bridged to bitcoin (BTC).

The Block reached out to KuCoin for updates and comments but did not receive an immediate reply.

NEAR Intents said it was already in touch with law enforcement and blockchain analytics platforms to trace the funds and would be releasing a post-mortem report in the coming days.

This comes roughly a month and a half after NEAR reported that it had crossed $25 billion in lifetime volume moved through the platform.

The NEAR Protocol token (NEAR) is down 6.7% on the day and is trading at $4.96. It is also bad timing for those who jumped into Bitwise's NEAR ETF (NRR), which launched just two days ago. NRR is down 6.4% at the time of press, giving back all the gains and then some from Wednesday.

In a statement shared with The Block on Thursday, Arcus said the integration makes it one of several routing providers Robinhood Wallet can use for stock token spot swaps. Eligible users in supported jurisdictions will be able to access Arcus’ liquidity and execution infrastructure through the wallet.

Built by the team behind dYdX, Arcus launched on Robinhood Chain in July with more than 90 stock tokens. Its lineup has since grown to more than 190, alongside perpetual markets that remain in beta, per the statement. 

Its system works differently from a single liquidity pool. Arcus uses a request-for-quote model in which professional market makers compete to price each swap rather than relying on a single liquidity pool.

“If a Robinhood Wallet user's swap is executed through Arcus, they may be eligible for Arcus Points,” the company said in the statement. Arcus will also make limit orders available to Robinhood Wallet users through the wallet’s dapp browser.

Arcus says it has processed more than $5 billion in cumulative trading volume since going live, with over 15,000 unique traders. Total value locked stands at more than $28 million.

"The early traction reinforces what we believed from the beginning: traders want markets that are global, accessible, and always on," Arcus CEO Eddie Zhang said.

BlackRock's usually dominant IBIT product ended its own nine-day, $1.6 billion inflow run, with $9.5 million exiting the fund. Fidelity's FBTC led the day's net outflows with $125.6 million, followed by Bitwise's BITB with $13.6 million. The remaining funds all registered zero flows.

The nine-day streak had marked one of the most positive runs for the bitcoin funds this year, taking cumulative flows back into positive territory for 2026.

"Here's a nice look at the lifetime cumulative flows for the Bitcoin ETFs… getting really close to a new high water mark, which is arguably astonishing given what they've been through over the past 11months," Bloomberg Senior ETF Analyst Eric Balchunas said ahead of the latest daily figures.

However, the funds remain about $5 billion away from their cumulative flow peak on Oct. 10 last year, fellow Bloomberg ETF analyst James Seyffart noted.

Overall, the U.S. spot Bitcoin ETFs have generated over $57 billion in cumulative net inflows since their debut in January 2024 and $970 million year-to-date, with over $100 billion in assets under management, per The Block's Bitcoin ETF Tracker page.

Last week, the newest Bitcoin ETF from Morgan Stanley, which launched in April this year, topped 10,000 BTC in assets under management for the first time, according to the firm's MSBT fund page.

Meanwhile, U.S. spot Ethereum ETFs saw $59.6 million in net outflows on Wednesday, led by $26.6 million exiting Fidelity's FETH fund. That extends their net outflow streak to two days, following a prior seven-day, $850 million inflow streak. Total net inflows for the Ethereum funds, which launched later in July 2024, currently stand at around $14 billion.

Bitcoin whipsaws as soft PCE cools October Fed rate hike bets

Bitcoin whipsawed around the $84,000 level on Wednesday, as a softer-than-expected reading of the Federal Reserve's preferred PCE inflation gauge reduced expectations for another interest rate hike in October.

"A 0.2% monthly rise in core PCE prices is welcome news for the Fed," said Brendan Ma, head of investment strategy at the Arbitrum Foundation. "If September CPI points the same way, the pressure for an October hike eases."

Bitcoin closed positive for September, up 6.4%. It is currently trading at around $83,950 on Thursday, per The Block's (BTC) price page.

Lloyds purchased USDC through UK-regulated digital asset exchange Archax for the series of U.S. dollar settlements. The volume was booked through Lloyds' Corporate Markets branch in Jersey and transferred to Visa in the U.S. Funds reached Visa in under an hour, including during the weekend, the bank said Wednesday.

The pilot dealt with settlement between the financial institutions rather than the payments made by customers. Lloyds said traditional cross-border settlement can take a day or more when initiated outside banking hours. "Settling $750,000 of live payment obligations between Lloyds and Visa using stablecoins has allowed us to move beyond theory and test these capabilities in a real-world setting," Lloyds Head of Digital Assets Peter Left said.

Testing settlement across blockchains

Lloyds also ran its own node on the Canton Network during the trial, while Visa supported settlement on a separate, unnamed, public blockchain.

Visa's stablecoin settlement volume surpassed a $20 billion annualized run rate last month. In April, Visa added Canton and four other blockchains to its settlement pilot, taking the total to nine.

Lloyds was among six major UK banks that began a live pilot of tokenized sterling deposits last year.

Bitwise Chief Investment Officer Matt Hougan took a stab at making sense of it in a new memo posted on Wednesday. He argues that crypto may not have gotten the certainty of federal law, but it also dodged certain compromises that would have stifled major parts of the industry.

This led other regulators like the Securities and Exchange Commission and the Commodity Futures Trading Commission to step in with measures that he sees as more favorable than the bill itself.

The Senate rejected a move to advance Clarity on Sept. 15, with 49 senators voting in favor versus 50 against.

Many expected this to erase much of the crypto market rebound gains seen in the month prior to the vote, but the opposite happened.

Clarity down, crypto up

Bitcoin (BTC) is up nearly 11% while ether (ETH) has added roughly 12%, while other smaller tokens have posted much larger gains.

The total crypto market capitalization, meanwhile, is sitting at roughly $2.95 trillion, up nearly 11% from the $2.65 trillion on Sept. 15.

Stablecoin rewards are one example in Hougan's analysis. He noted that the final bill would have barred platforms from paying customer interest or yields on stablecoin balances. With Clarity stalled, exchanges like Coinbase are free to continue offering rewards under the existing GENIUS Act framework.

He also sees established exchanges benefiting. Clarity would have created a national licensing path that could make it easier for would-be rivals to compete, while limiting firms that combine exchange and brokerage services, he wrote.

On tokenization, the SEC issued a five-year "innovation exemption" just days after the vote, allowing limited trading of tokenized U.S. stocks through onchain platforms.

SEC staff then offered further guidance last week for projects that buy back their tokens. An updated FAQ said announcing a buyback for an already functioning crypto network would not itself make a token sale an investment contract.

The lingering risk in Hougan's memo is that a future administration could come in and change course where Congress has not locked the rules into law.

For now, however, "Crypto sacrificed long-term certainty and got better rules, faster," he wrote.

On Wednesday, the U.S. District Court for the Middle District of Florida entered a default judgment against Brian Early and Alisha Ann Kingrey for their alleged scheme, which the CFTC said also involved an "unincorporated Fundsz entity and its website," according to a statement from the agency.

As board members and moderators of the entity's Telegram group, the court found that Early and Kingrey lied materially about Fundsz's expected profits, past trading performance and risks of loss, while also falsely representing that investors' money could be traded in line with a "proprietary algorithm" and that their funds could be later withdrawn with interest.

When Early and Kingrey realized they were being investigated by the CFTC, they tried to walk back claims, the court found.

"The court further found that when Early and Kingrey learned of the CFTC’s investigation, they began walking back their profitability claims and worked to eliminate Fundsz’s social media presence," the agency said.

Also on Wednesday, the court entered consent orders in two other defendants involved in the scheme — Rene Larralde and Juan Pablo Valcarce, the agency said. Larralde died in 2023, and Rachel Larralde was substituted as a defendant and was ordered to "turnover possession and control of the Larralde Residence 'as is'", according to the consent order.

Meanwhile, as part of his consent order, Valcarce was permanently banned from having crypto or precious metals traded on his behalf and from further violations of CFTC rules.

Validity Transactions enable users to submit time-bound transactions that remain dormant until certain conditions are met, the team explained in a statement shared with The Block ahead of the launch. This allows for more control over the criteria and timing for eligible transaction inclusion on Base.

As an example, a trader could submit a swap that only becomes eligible if the pool price reaches at least a certain USDC value before a certain block, the team said. If the price reaches that level in time, Base can include the transaction; otherwise, it is never included.

"The API is neutral infrastructure that provides advanced traders with the added benefit of keeping their submissions private until they land," Base said.

B20 token standard

The Coinbase (COIN)-incubated Ethereum Layer 2's upgrade also adds enhancements to its B20 token standard, which went live with Base's Beryl upgrade in June.

Composite Policies enable asset issuers to combine existing allowlists and blocklists with OR or AND logic, Base explained.

"This makes it possible to reuse live policies, such as KYC allowlists and sanctions blocklists, without copying member lists or maintaining offchain synchronization," it said.

For example, a fund could require recipients to be on both a KYC list and its own accreditation list. A transfer would fail if the recipient was removed from either one.

Meanwhile, Schedule Multiplier Updates align the B20 Asset multiplier with the ERC-8056 standard and let issuers schedule changes to how an asset's balance is displayed, such as for a stock split. Existing integrations on Beryl will continue to work, while new integrations can adopt the updated standard over time, the team said.

Finally, Cobalt adds a "seizeWithMemo" function for B20 assets and stablecoins, allowing authorized administrators to reassign a holder's balance where seizure has been enabled.

Base gave an example of a frozen account where an authorized administrator moves shares to a recovery wallet. The transaction records the source, destination, amount, and a memo onchain.

Over the coming months, Base said it also plans to reduce block times from 2s to 200ms, make smart accounts native at the protocol level with gas sponsorship and transaction batching, and support a subset of EVM improvements from Ethereum's Glamsterdam upgrade.