Category: Business

The CLARITY Act sets out to answer a question U.S. regulators have struggled with for over a decade: when does a crypto token count as an investment, and when does it behave more like a commodity such as gold. The answer determines who regulates a token, what its creators must disclose, and what rules a platform must follow when it lists that token or holds it on behalf of customers.

Main Problem the Bill Is Trying to Fix

When a company or development team creates a new token and sells it to fund a project, that sale can resemble an investment, since early buyers are often betting on the team successfully building and promoting the network. Years later, the same token might trade widely across a decentralized network with its value no longer tied to that original team. At that point, it starts to look more like a commodity than a security.

U.S. law currently offers no clear rule for when a token crosses that line, and two different regulators are involved. The Securities and Exchange Commission oversees securities, while the Commodity Futures Trading Commission oversees futures markets and has narrower authority over direct commodity trading. Traditional assets fall cleanly into one category or the other. Crypto often does not.

How CLARITY Would Treat Bitcoin

Bitcoin is already generally treated as a commodity, largely because it has no central issuer or company behind it. Under the current system, the CFTC’s authority over spot Bitcoin trading is limited mostly to policing fraud and manipulation. CLARITY would expand that authority, giving the CFTC broader power to directly regulate the platforms where Bitcoin is bought and sold, not just to intervene after something goes wrong.

How CLARITY Would Treat Ethereum and $XRP

For tokens like Ethereum and $XRP, which sit in a greyer zone between fundraising history and current decentralized use, CLARITY attempts to draw a line based on function rather than origin. Fundraising activity would remain under SEC oversight, while later-stage trading in tokens that qualify as sufficiently decentralized could shift to the new CFTC framework. This would not automatically reclassify every token as a commodity. It creates a pathway for tokens to transition out of securities treatment once they no longer depend primarily on a central team.

New Obligations for Platforms and Projects

Platforms operating under the new CFTC framework would be required to register, keep customer assets segregated from their own funds, and follow rules covering disclosures, recordkeeping and conflicts of interest. Projects raising money through token sales would need to publish information about who is behind the project and how the underlying technology works, while insiders would face new limits on how quickly they can sell their holdings.

Why the Bill Has Been So Difficult to Pass

The disagreement is not over whether crypto needs rules, but over what those rules should say and who should enforce them. Three fights have defined the bill’s path so far.

The first involved stablecoin rewards. Some platforms pay users rewards for holding stablecoins, similar to bank interest. Banks argued this could pull deposits out of the traditional banking system, while crypto companies countered that restricting rewards would simply shield banks from competition.

After months of negotiation, lawmakers reached a compromise barring rewards paid simply for holding a stablecoin, while allowing rewards tied to actually using one. Coinbase backed the revised deal, and the Senate Banking Committee advanced the bill in May.

The second fight centers on state authority. CLARITY would replace certain state-level requirements with a single federal framework. Supporters argue this creates consistency, while critics warn it could weaken states’ existing tools for investigating scams and holding platforms accountable.

The third involves conflicts of interest among lawmakers themselves. The latest draft would bar federal officials and their spouses from being paid to issue or sponsor digital assets while in office. Democrats are pushing for stricter limits on lawmakers profiting from crypto, while Republicans backing the bill argue the current draft already goes far enough. The bill needs bipartisan support to pass, and identical versions must clear both the House and Senate before reaching the president’s desk.

If CLARITY Passes

Crypto businesses would gain a clearer federal rulebook for registering and operating in the U.S. Because the U.S. represents such a significant share of global crypto capital and users, businesses and exchanges operating outside the country may also adjust their practices to align with the new framework, extending its influence well beyond American borders.

If CLARITY Does Not Pass

Crypto would not become unregulated. Existing law would continue to apply, enforced through regulators, courts and individual states. The difference is timing. Many of today’s legal boundaries are only clarified after a product has already launched, often only once something has gone wrong. CLARITY is designed to establish those boundaries in advance rather than after the fact.

Official Trump memecoin has experienced extreme volatility over the past day. In fact, the memecoin surged 10.2% and flipped $3 resistance to a high of $3.06.

However, this pump failed to hold and the altcoin dropped again falling $2.6 before rising to $2.7 as of this writing. $TRUMP pumped as investors were tricked to believe the recently launched GOLD was $TRUMP 2.0.

However , after the team behind GOLD was accused of rug pull sentiment flipped shortly after. In fact, Lookonchain reported that 15 wallets that purchased GOLD sold their holdings and exited the market taking over $312k in profit.

$TRUMP investors panic exit amid rising liquidation risk

This market volatility triggered a wave of liquidations for both longs and shorts. Traders who took long eyeing trend continuation, saw over $8.4 million in liquidations, while over $5.1 million worth of shorts were liquidated.

In total, the memecoin recorded over $13.57 million in total liquidations, indicating heightened volatility. Amid these liquidations, most traders both short sellers and longs, hurriedly closed their positions.

According to Coinglass data, Official Trump [$TRUMP] recorded $1.44 billion in futures outflows compared to $1.38 billion in inflows. For that reason, Futures Netflow dropped 5614% to -$68 million.

A negative Netflow suggested that traders mostly closed their positions. The Open Interest further validates this observation.

$TRUMP’s Open Interest dropped 6.4% to $279 million while the Derivatives Volume rose 23% to $3.3 billion. The falling OI and rising volume suggested that most traders exited their positions.

Profit taking returns on the spot too

As $TRUMP crossed $3, holders on the spot also rushed to cash out after the GOLD token launch brought about a negative sentiment.

Previously, the Spot market have been aggressively accumulating, with the Netflow holding negative for five consecutive days. On 29th August, this changed so first, with the Netflow rising to positive zone.

As of this writing Netflow was around $4.5 million, suggesting more $TRUMP entered exchanges, a clear sign of selling pressure.

What’s next for the memecoin?

With sellers active on both the spot and futures, the memecoin is unlikely to hold the uptrend. Historically, intense selling pressure has preceded price drops.

For now, however, $TRUMP momentum still holds bullish. In fact, the Relative Strength Index (RSI) has remained elevated, currently at 73.

At these levels, the RSI suggest the uptrend is intact, with buyers still in control of the market. Likewise, $TRUMP holds above both short term and long term moving averages, further validating this view.

Under these circumstances, the bullish structure is intact and likely to hold. If bulls can absorb the arising pressure, $TRUMP will reclaim $3 and eye to flip $3.6 resistance.

However, if the pressure persist, the memecoin will breach $2.7 with $2.2 as the next support level.

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Final Summary

• Official Trump [$TRUMP] saw extreme volatility, rising 10%, rising to $3.06 then retracing to $2.7 at press time
• $TRUMP saw increased liquidation, with $13 million worth of positions liquidated triggering a wave of panic selling.

Charles Schwab’s director of global equity research, Adam Lynch, laid out the firm’s crypto allocation thinking in a recent appearance, distinguishing between five digital assets the firm views as serving fundamentally different roles in a portfolio: Bitcoin, Ethereum, Solana, $XRP and Hyperliquid.

Not All Crypto Is the Same Trade, Schwab Says

Lynch described Bitcoin as the “classic” debasement hedge, the asset investors turn to when concerned about fiat currency devaluation. Ethereum, he said, carries more functional utility than Bitcoin while still fitting into that broader debasement narrative. Beyond the two majors, Lynch grouped Solana, $XRP and Hyperliquid as higher-volatility, higher-risk allocations he suggested pairing with a core position in the larger assets, rather than replacing them.

Goldman Sachs’ Solana Bet Comes Into Focus

Goldman Sachs has become the largest disclosed holder of spot Solana ETFs, with $88 million in exposure, according to disclosure filings referenced in the discussion. Because not all institutional holders are required to disclose positions, the real scale of Wall Street’s Solana exposure could be considerably larger than what’s currently visible in public filings.

Separately, Schwab confirmed it is adding Solana, Avalanche and Chainlink to its crypto trading platform, expanding beyond the Bitcoin and Ethereum access it already offered. Grayscale Research has pointed to Bitcoin, Ethereum and Zcash specifically as the assets most likely to benefit from what it calls the “debasement trade,” tied to U.S. national debt surpassing $40 trillion and continued fiscal deficits.

Solana’s Supply Squeeze Just Got Bigger

In a separate development, Solana validators passed a proposal to double the network’s disinflation rate to 30%, with yes votes clearing 66.6% in the final hour of voting. The change is projected to reduce planned SOL issuance by close to 20 million tokens, worth an estimated $1.4 billion, over the next six years. Reducing new supply entering circulation is widely viewed as a structurally bullish shift for the token’s long-term valuation.

Bitcoin Drops Below $77,000 as Fed’s Warsh Turns Hawkish

The bullish setup collided with macro reality Friday, when Bitcoin fell below $77,000 after Fed Chair Kevin Warsh signaled the possibility of a rate hike during his Jackson Hole keynote. Warsh has now delivered a hawkish tone in each of his public appearances since taking the role.

U.S. inflation has now remained above the Fed’s 2% target for 65 consecutive months, according to the discussion, a backdrop that continues to complicate the path toward rate cuts.

What It Means

Between Schwab’s differentiated allocation strategy, Goldman’s growing Solana exposure, Solana’s reduced token issuance and a bipartisan regulatory bill gaining bank support, institutional infrastructure around crypto is building even as short-term price action reacts to Fed commentary.

Whether that structural momentum translates into sustained price strength may depend less on any single Fed speech and more on how quickly the CLARITY Act moves through Congress from here.

Kraken users were briefly locked out after the exchange dealt with a flood of sanctioned crypto transactions, according to CoinDesk. The incident links an access disruption to compliance activity, highlighting the operational strain that can arise when an exchange must process a large volume of transactions associated with restricted entities or addresses.

A Compliance-Driven Disruption

A temporary lockout is different from a confirmed loss of customer funds, and the available report does not establish that user balances were permanently affected. The immediate issue was access while Kraken handled the transaction flow and its associated sanctions controls.

Why Sanctions Screening Affects Availability

Crypto exchanges screen deposits and withdrawals against sanctions lists and other risk signals. A sudden burst of flagged activity can require manual review, system throttling or account restrictions. Those controls are designed to limit prohibited activity, but they can also interrupt legitimate users when systems are under pressure.

The Questions for Kraken

The important follow-up points are how long the disruption lasted, how many accounts were affected, and what controls Kraken will change to prevent a repeat. Exchanges must balance rapid access with legal obligations, and a short incident can still expose weaknesses in monitoring, communication or capacity planning.

For context, BlockchainReporter has previously examined how institutional financial systems are testing blockchain settlement in earlier coverage. The new development remains specific to this event and does not establish a broader market outcome.

Deribit will remove its public Proof of Reserves page on Sept. 1, ending a daily check customers could use to verify balance inclusion and compare aggregate liabilities with published wallet holdings. Regulator-required reserve, reconciliation and audit controls will remain, but they do not provide the same daily public visibility.

The exchange said the change reflects a wallet infrastructure overhaul during its integration with Coinbase. Deribit said roughly 90% of client assets have moved into Coinbase custody arrangements since Coinbase acquired the derivatives platform in August 2025. Its disclosures name Coinbase at the brand level but do not identify the specific Coinbase legal entity holding the migrated assets.

Deribit’s existing system uses a privacy-preserving binary Merkle tree and a daily snapshot. Each client can use a unique proof identifier to find the hashed entries representing their balances, while anyone can sum the file’s liabilities and compare the total with wallet balances published by Deribit.

The public snapshot was already narrower than Deribit’s full custody footprint. Its methodology says assets held with third-party custodians are excluded because they are outside Deribit’s direct control, naming Copper ClearLoop as an example. It

The removal does not cancel the obligations applying to Deribit FZE. Dubai’s Virtual Assets Regulatory Authority requires covered virtual asset service providers to maintain reserves equal to 100% of client liabilities, hold them one-to-one in the same asset, reconcile them daily and obtain an independent third-party reserve audit at least every six months.

Deribit’s notice refers both to annual and twice-yearly Proof of Reserves audits. The VARA rule sets the reserve-audit minimum at once every six months. A separate VARA provision requires an annual financial-statement audit and says the annual report must be available to clients and the regulator on request.

Other evidence is regulator-facing rather than public. Covered firms must submit wallet addresses monthly and statements demonstrating compliance with financial requirements, including reserve assets, quarterly to VARA.

VARA’s register lists Deribit FZE as an active exchange and broker-dealer VASP. Its membership terms allow assets to be held directly or through third-party custodians while requiring segregation from company assets and preserving clients’ legal title. A separate service-provider list names Coinbase for custody and self-custody technology without specifying the Coinbase entity.

The page’s removal is not evidence of a reserve shortfall. It is a reduction in what customers can test for themselves each day, leaving controls and reports that are less public, less frequent or available only on request.

A vulnerability in an outdated Rain card contract drained roughly $1.1 million across several Solana-based programs, including $500,800 from 1,685 Avici users, sending the neobank’s AVICI token down as much as 49%.

AVICI — a self-custodial neobank that enables users to spend their crypto via a Visa-integrated credit card — fell from a 24-hour high of $0.43 to a record low of $0.217 before recovering to around $0.378 at the time of writing.

Tria, another crypto neobank, reported that 636 users were affected, resulting in losses totaling more than $430,000. It vowed to repay users in full, even as its token plunged by more than 10% at one point.

Avici said the attack was confined to a Solana contract holding funds after customers topped up their cards. Its self-custodial wallets on Solana and Ethereum-compatible networks were not affected, and the company said every affected card balance would be refunded.

Rain said its monitoring identified the vulnerability in an outdated contract version used by Avici and a small number of other programs. It upgraded every program running that version and reported no further unauthorized activity.

Economist James E. Thorne criticized the Federal Reserve’s tight monetary policy against inflation, arguing that interest rate increases may be insufficient to address the root causes of current price pressures. According to Thorne, Fed Chairman Kevin Warsh and Wall Street circles view supply-driven inflation as a classic overheating problem stemming from excess demand.

Thorne stated that high inflation is not solely caused by strong consumer demand; energy costs, housing shortages, production cuts, and other supply constraints also play a significant role. Therefore, he argued that further interest rate increases, instead of reducing inflation, could weaken the economy’s productive capacity.

Employment Data Does Not Support the “Overheating” Thesis

Thorne specifically drew attention to the decline in quarterly full-time employment data. The economist stated that this decline could be a sign of the structural transformation the economy is undergoing, rather than just a one-month statistical anomaly, and that the fact that a significant portion of the decline stemmed from public sector employment did not diminish the significance of the situation.

According to Thorne, this view indicates not so much that the economy is overheating, but rather that the labor market is adapting to changing fiscal policies, industrial structure, and institutional conditions.

Thorne argued that the housing sector was sending a similar message, stating that the housing market, one of the sectors most sensitive to interest rates, was directly feeling the pressure of tight monetary policy rather than creating inflation.

Thorne argued that the recent growth in the US economy could be explained not by widespread, credit-fueled overheating, but rather by the initial results of the Trump administration’s supply-side economic policies and a long-term investment cycle.

Thorne, particularly highlighting the increase in investments in artificial intelligence, data center and computing capacity, electricity generation, and infrastructure, stated that these investments have the potential to increase the production capacity and efficiency of the economy.

According to the economist, further interest rate increases by the Fed during this period, instead of controlling inflation, could make it more difficult to finance productive investments, hindering future expansion of supply capacity.

“Customs Duties Are Not the Same Thing as Persistent Inflation”

Thorne also added that, according to classical economic theory, real supply shocks should lose their effect over time as prices and production adjust.

Thorne noted that a shock in oil prices does not necessarily require permanently high interest rates, and that tariffs can also create a one-time increase in the price level, but this is not the same as a self-reinforcing, continuous inflationary process.

Thorne also argued that there is no strong evidence to suggest that the neutral real interest rate, considered a stabilizing factor in the economy, or “r*” level, has risen by approximately 100 basis points in a short period of time.

According to Thorne, the fundamental question for the Fed is whether further tightening of monetary policy is appropriate while full-time employment is declining and the housing sector remains under pressure.

The economist said that under current conditions, new interest rate hikes might represent less of “prudent inflation control” and more of a deliberate suppression of demand as a result of supply constraints and a misjudgment that an economy undergoing structural transformation is overheating.

*This is not investment advice.

Grayscale Sees More Room After Zcash’s 19x Rally

Zcash may have further upside despite rising approximately 19-fold over the past year, according to Grayscale Head of Research Zach Pandl. The asset manager said Aug. 25 that Zcash could challenge Bitcoin’s network effects through capabilities that were unavailable or less relevant when Bitcoin established its lead.

Grayscale’s “Currencies” sector groups crypto assets primarily designed to serve as digital money or stores of value. Bitcoin accounts for 93% of the category by market capitalization. The asset manager identified financial privacy, development addressing cybersecurity threats, and cross-chain reach through intents technology as Zcash’s potential advantages.

“Zcash offers financial privacy and other attributes that users may find essential in an age of AI,” Pandl wrote, adding:

“We think it is still undervalued and can continue to capture market share.”

$ZEC’s price as of Aug. 29 via Bitcoin.com Markets

Bitcoin’s Market Cap Remains 114 Times Larger Than Zcash’s

$ZEC remained valued at less than 1% of bitcoin’s market capitalization after its rally sharply improved Zcash mining economics. Grayscale said the disparity could indicate that investors are underpricing Zcash’s features, although it emphasized that $ZEC remains a smaller, more volatile, and higher-risk cryptocurrency.

As of Aug. 29, bitcoin ranked first among all cryptocurrencies with a market capitalization of $1.56 trillion, while Zcash ranked 11th at $13.74 billion. $ZEC’s market capitalization equaled approximately 0.88% of bitcoin’s, leaving $BTC about 114 times larger.

Grayscale calculated how $ZEC could perform if it captured a larger share of bitcoin’s market capitalization over five years. Based on estimated $ZEC supply, the scenarios imply prices of $1,622 at 2%, $4,054 at 5%, and $8,109 at 10%. The figures are hypothetical, not price forecasts.

AI Surveillance Could Strengthen the Privacy Case

Artificial intelligence could make financial surveillance more effective by connecting public addresses with exchanges, counterparties, wallet behavior, and transaction histories. Grayscale’s Aug. 19 Zcash financial privacy analysis argued that AI and blockchain adoption could create another wave of public concern about financial confidentiality.

Intents technology lets a wallet coordinate cross-chain transactions based on the user’s desired result, such as converting another digital asset into $ZEC. This allows users or AI agents to access Zcash’s privacy features without merchants accepting $ZEC directly.

In some respects, Zcash resembles Bitcoin through its proof-of-work security model and fixed supply of 21 million coins. Unlike Bitcoin, the network supports shielded transfers that conceal transaction details using zero-knowledge proofs. These transfers reflect how privacy coins use cryptographic techniques to obscure transaction details, including the sender, recipient, or amount.

Market access expanded Aug. 25 when Grayscale’s Zcash ETF began trading on NYSE Arca under the ticker ZCSH. The fund moved from OTCQX quotations to NYSE Arca, giving investors spot $ZEC exposure through a publicly traded vehicle without requiring them to purchase the cryptocurrency or manage wallets and private keys directly.

Privacy Use and Network Development Build Momentum

Grayscale said in March that privacy and growing network momentum could help $ZEC compete with $BTC. Its March 18 comparison of Zcash and Bitcoin pointed to increasing use of shielding technology and new capital supporting wallet development and Zcash mining.

Pandl wrote:

“Zcash, a privacy-focused digital currency, is the Bitcoin competitor with the best shot at capturing market share over time, in our view.”

Development carries security and execution risks alongside potential benefits. The Zcash Foundation patched two Zebra vulnerabilities involving a critical remote denial-of-service flaw and a high-severity potential chain-split flaw during the first quarter.

Zcash has been one of the best-performing assets this year. It has managed to attract significant institutional capital. This week, asset manager Grayscale Investments launched the first exchange-traded fund that tracks the spot price of $ZEC.

But interest in the privacy-focused token peaked shortly before its price reached a recent high.

Zcash Crowd Showed Up Early

Data shared by Santiment revealed that social chatter faded by the time the $ZEC spot ETF launched. Grayscale converted its 2017 Zcash trust into a spot ETF, which began trading on NYSE Arca on August 25.

Ahead of the launch, the asset climbed from around $509 on August 18 to about $878 on August 23, posting a gain of roughly 72%. Social mentions reached 232 on August 22, which is around six times the usual August baseline. However, that surge in attention did not last.

Mentions had returned to their baseline level by the ETF’s launch day. According to Santiment, social activity peaked one day before $ZEC’s price high, which suggested that much of the crowd interest arrived ahead of the market’s high.

Since reaching about $878, the token has pulled back to roughly $789, a decline of around 10% from the recent peak.

Zcash Challenging Bitcoin?

Grayscale Research believes $ZEC could emerge as a serious challenger to Bitcoin’s network effects as demand for financial privacy grows. In a report by Head of Research Zach Pandl, the firm said Bitcoin remains dominant among digital currencies. While alternatives such as Litecoin have emerged, none has seriously challenged BTC’s position.

Grayscale, however, stated that Zcash could be different because it combines Bitcoin-like characteristics with privacy features that may become more important as AI-powered surveillance expands. The report also points to the ecosystem’s active development, which aims to address cybersecurity risks, including potential threats to traditional cryptography from quantum computing.

Another advantage is its cross-chain reach through “intents” technology built into modern blockchain wallets, which allows Zcash to function as a private asset hub without requiring broad merchant adoption. $ZEC has already gained around 19 times over the past year but remains worth less than 1% of Bitcoin’s market capitalization. Grayscale said Zcash’s financial privacy and other features may be undervalued, thereby leaving room for further upside.