Nathan Allman, founder and CEO of Ondo Finance, died unexpectedly on May 25. He built the infrastructure for putting yield-bearing traditional assets on-chain early enough that the institutions now racing to catch up are building on rails he laid while they were still arguing about whether trains were a fad. He will be missed!
On Friday, BCG published the number. Thirty percent of profits, compounded through 2035, for the institution that leaves the decision to the committee. That is thirty percent of profits, converted by committee, into a very fine PowerPoint and a long lunch. Thirty-seven European banks had confirmed signatures on the alternative before the week ended, which is the speed at which banks move when the competition is real.
On Tuesday, a US Special Forces soldier was arraigned for using classified intelligence about a raid he helped plan to execute prediction market trades before the operation became public. He made $400,000. The acting CFTC Chair is now at MoonPay. The referee has joined the visiting team and is asking for the ball. The family that owns both dominant prediction market platforms announced it is building a third.
The rest of the world kept building. Here is what happened.
The Family Owns the Market. The Market Prices the Family.
There is a governance structure here that the appropriate disclosures describe as an advisory relationship. Both words are doing less work than the sentence requires. The President's son holds investment and advisory positions in both Polymarket and Kalshi, the two platforms that price outcomes of political decisions. The administration is writing the CFTC rules under which those platforms operate. The platforms generate higher volume when political decisions are more unpredictable. The administration's primary output is unpredictable political decisions. The disclosures are current.
A CFTC inspector subsequently came forward alleging she had been dismissed after raising concerns about this arrangement in writing, naming the two platforms and two associated companies. The acting CFTC Chair and a senior CFTC counsel then left for positions at the companies she had named: MoonPay and Gemini Titan respectively. The inspector no longer works at the CFTC. The two officials she named no longer work at the CFTC either. In the restaurant industry, this sequence is called a conflict of interest. In financial regulation, it is called a personnel rotation. Congress opened a formal inquiry on Friday.
Trump Media announced a partnership with Crypto.com to launch a prediction market product on Truth Social. The announcement was made the same week as the congressional inquiry, because nothing communicates institutional seriousness like opening a second location while the first one is under investigation. Both are proceeding on schedule.
The soldier is the part of this story with a courtroom. He used classified operational intelligence about a Venezuelan cartel raid he helped plan to execute winning trades on Polymarket before the operation became public. He made $400,000. A separate, unidentified wallet cluster won 93% of its bets on Iran war outcomes over three months and netted approximately $1 million. The cluster has not been indicted. It is presumably a very lucky, very shy hedge fund run by a sentient spreadsheet that prefers to keep a low profile.
When the President was asked about the soldier, he said the soldier had bet on his own team and therefore he was not a bad person. He added he was not personally a great enthusiast of prediction markets. This is a useful legal principle: insider trading using classified information is, depending on directional conviction, a gratuity.
The platform's UMA oracle adapter was separately exploited for $520,000 during the same week. An oracle that tells the truth got mugged. India blocked access to the platform, because that will fix it.
A practitioner watching this closely said the executive order enabling all of it is bad, and left it there.
The Toll Booth Got Bypassed.
For a hundred years, the pipe between private financial institutions and the Federal Reserve's payment infrastructure had one set of owners: banks. Everyone else leased access at rates the owners set, through relationships the owners controlled. On May 19, the White House asked the Fed to put in writing why that should remain true.
The executive order directs the OCC, FDIC, SEC, CFTC, CFPB, and NCUA to identify every regulation blocking fintech and digital asset firms from financial services within 90 days. The Federal Reserve has 120 days to assess non-bank access to Reserve Bank master accounts and to clarify whether the 12 regional banks hold independent authority to grant them without Board approval.
The banking lobby's response described that authority as "discretionary," which is accurate. The Kansas City Fed used that discretion in March and gave Kraken a master account. The Board has spent the subsequent weeks searching for the regulation that says it should not have done so and has not found it. The lobby is now arguing discretion should not be exercised in the same direction again, and has 120 days before the Fed has to explain whether that argument has a legal basis, or just a historical precedent it would prefer not to examine.
Ripple, Anchorage Digital, Circle, Paxos, Wise, and WisdomTree are either in motion or formally filed. Stablecoin transaction volume reached $33 trillion in 2025. Market cap crossed $300 billion this week. The toll booth just got bypassed.
Nine Thousand Seven Hundred Machines Went Dark.
Bitcoin Depot filed for Chapter 11 on May 18. Nine thousand seven hundred ATMs across 47 states are offline. A lot of machines that looked like arcade cabinets at the back of gas stations have gone dark simultaneously. Revenue down 49% year-on-year. A $12.2 million profit became a $9.5 million loss in a single quarter, with a $3.7 million hack in April contributing. Tennessee became the second state after Indiana to ban Bitcoin ATMs outright, effective July 1. The FBI recorded $389 million in consumer losses through crypto ATMs in 2025, disproportionately targeting elderly users. The regulators were responding to something real.
The response was a patchwork of state bans rather than a coherent federal framework. The result is a Nasdaq-listed company with 9,700 machines gone in a single filing, and no replacement announced for the Americans who used them. This is regulatory fragmentation at its terminus.
The same week: Charles Schwab began a limited retail rollout of spot Bitcoin and Ethereum. Western Union launched USDPT, a Solana stablecoin issued by Anchorage Digital Bank, targeting treasury operations and agent payments across 40+ countries through 360,000 retail locations. Tether partnered with the Government of Georgia on GELT, a Georgian Lari-pegged stablecoin, the first state-backed private stablecoin of its kind.
The on-ramp infrastructure is being rebuilt. The replacement has better compliance, lower fees, and a view of the customer that does not primarily involve a gas station. Whether the people who used the machines know this is not a question the industry is urgently trying to answer.
The ECB Said No. Thirty-Seven Banks Said Yes.
The ECB this week formally rejected proposals to ease liquidity requirements for euro stablecoin issuers, calling the structure a systemic risk. A European Commission official called the ECB's position "nonsense" and "a fundamental misreading of MiCA." The digital euro remains on a 2029 timeline. Europeans represent 38% of global stablecoin volume. Euro stablecoins represent 0.3% of global supply.
The ECB's position on euro stablecoins is the monetary policy equivalent of the Académie française voting to ban the word "email" and insisting on "courriel." The vote was taken in 2003. A second recommendation issued in 2013. Europeans continued to use email. The Académie continued to issue recommendations into an inbox that had already filed them. It is still shouting "courriel" into a hurricane of euros.
Thirty-seven institutions across 15 European countries have confirmed Qivalis membership: MiCA-compliant, De Nederlandsche Bank-supervised, 1:1 euro-backed, H2 2026 launch. The list includes institutions that were not expected to sign, among them Deutsche Bank, Santander, Intesa Sanpaolo, and ABN Amro. Dutch banks that had maintained restrictive crypto policies for years reversed course this week specifically to back this consortium. We covered the full BCG architecture on Friday. It is at cointegrity.io. The condition BCG assessed as outstanding on May 18 had 37 confirmed signatures before the week ended. That is the speed of a bank run, but in the right direction.
Then May 24 arrived. Stablr, which holds full MiCA EMT authorisation and went through the entire compliance process, depegged following a $28 million exploit. Both its EUR and USD stablecoins lost the peg. Tether, which does not hold MiCA authorisation and has been consistently delisted by EU-licensed exchanges, held its peg throughout. Stablr did not cut corners. This is a stress test of whether MiCA's reserve and safeguarding requirements protect users when a determined attacker arrives: a fortress built to the exact specifications of the regulatory manual, and a drone through the chimney. One data point. One data point is what you start building a review from, ideally before the next drone.
Zero Hash this week became the first MiCAR-licensed firm to also hold an EMI licence from the Dutch Central Bank: AFM authorisation under MiCA, DNB authorisation under PSD2's EMI framework, both in the same institution. Most applicants are still reading the guidance pointing there, which is a map that says "here be dragons" where the dragons are paperwork and the treasure is a functioning business.
An inner-circle rumour treats as credible and near-term that ESMA is preparing a paper requiring licensed CASPs to delist unauthorised stablecoins. USDT is the obvious implied target. Nothing published. Readers wishing to place bets on the outcome are directed to the prediction market of their choice, preferably using a wallet cluster with a 93% win rate.
The Consultation Closes August 31. The Cliff Is July 1.
The European Commission published its targeted consultation on MiCA's scope on May 20. Feedback deadline: August 31. The consultation focuses on DeFi certification via a product-licensing model. Practitioners have assessed this approach in terms that are polite in vocabulary and not in substance: the document reflects an institutional model of how DeFi operates that was last updated before the protocols it proposes to certify stopped looking like what the consultation assumes they look like. In practical terms, the EC is drafting safety standards for horses at a time when the horses have become self-driving and are now also buses.
The consultation does not mention bridges. The worst incidents of 2026, MEV attacks, bridge exploits, LayerZero as a propagation channel, were rooted in the infrastructure between protocols. The safety net is positioned under the trapeze artist. The tightrope is on fire. The consultation is live until August 31. The people who understand the actual attack surface have an obligation to respond to it. The alternative is a DeFi framework written by people who do not.
When KYT solutions started re-marking Belarusian entities as "Subject to EU sectoral crypto-asset transaction ban" last week, the first instinct in compliance circles was that something had broken. It had not. The EU quietly expanded its crypto sanctions package against Belarus through Council Regulations (EU) 2026/506 and 2026/513, effective May 24, bringing it in line with the Russian package. The Belarusian regime had been banning foreign CASPs while simultaneously building state-controlled crypto infrastructure the EU assessed was being used to circumvent restrictive measures. The regulation now bans transactions with any CASP established in Belarus, or any decentralised platform with material Belarusian connections. Any CASP that had not updated its screening by last Sunday is non-compliant as of last Sunday. This arrived with no announcement. If you are finding out by reading this newsletter, that is the announcement.
Kriptomat is winding down by June 30, citing MiCA uncertainty in Estonia. Zondacrypto's Estonian licence was partially suspended the same week. Approximately 1,000 pre-MiCA VASPs are still in transition with six weeks to the July 1 cliff. Eight years deserve more than a post.
Hong Kong Issued Two Licences. Thirty-Four Applied.
The HKMA issued two stablecoin licences this week from 36 applicants. HSBC received one. Anchorpoint Financial, a Standard Chartered joint venture with HKT and Animoca Brands, received the other. Japan's FSA finalised foreign stablecoin rules on May 24, permitting them as electronic payment instruments from June 1. Standard Chartered's Zodia Custody acquired Tungsten Custody in the UAE, obtaining ADGM FSRA coverage through the acquisition. Kraken received VARA In-Principle Approval in Dubai. South Korea passed cross-border crypto transaction reporting requirements effective May 26. The Bank of England's deputy governor declared the UK payment network ready for tokenisation.
The jurisdictions building here are not coordinating. They do not need to. The licensing positions being established in Seoul, Hong Kong, Tokyo, Dubai, and London will be the architecture that matters when the cross-border framework meeting eventually produces a document. The meeting will take the credit. The jurisdictions will have the licences. The document will be very proud of itself.
Norway Is the Only Nordic Country Outside Qivalis.
AllUnity, backed by DWS, Flow Traders, and Galaxy Digital, announced SEKAU, a MiCA-compliant Swedish Krona stablecoin, for a June 2026 corporate launch. CEO Alexander Höptner named an "Agentic Payments" layer for AI-to-AI commerce via the x402 protocol as the next phase: settlement infrastructure for autonomous agents transacting across jurisdictions without a human approval loop in the chain. The Swedish Riksdag established the Krona in 1668. It has taken 358 years to reach autonomous AI settlement. Höptner believes June is achievable, the kind of optimism that built empires and occasionally gets them eaten by a rogue trading bot at 3am.
Norway has no representation in Qivalis. Every other Nordic country does. DNB's Head of Emerging Business confirmed publicly that ownership in stablecoin issuance is not right for DNB at this time, while noting DNB follows Qivalis closely. DNB is developing tokenised deposits in collaboration with Norges Bank. The BIS named tokenised deposits as the preferred form of private money in April 2026. That is the sentence DNB is resting its position on. It is a reasonable position, right up until it can turn into a very expensive one.
Hyperliquid Processed 42% of Global Fees. CME Just Noticed.
Hyperliquid attracted $25.5 million in single-day ETF inflows on May 20 and $54 million across seven trading days through Bitwise BHYP and 21Shares THYP. HYPE trades at $55.91 with a $54.7 billion fully diluted valuation. The protocol processes 42% of global blockchain transaction fees. CME Group and ICE filed a formal request for regulatory oversight with Bloomberg on May 18. The filing arrived with the energy of a noise complaint about a nightclub that has been open for three years, holds half the neighbourhood, and has already bought the building next door. The neighbours have called the council. The club has bought the council chamber.
The SEC on May 22 delayed its tokenised equity innovation exemption indefinitely, following opposition from SIFMA, Citadel Securities, Nasdaq, and JPMorgan. The delay triggered $320 million in long liquidations. Bitcoin dropped to $77,500. The firms opposing tokenised equity have built profitable businesses on the settlement latency that tokenised equity removes. The regulatory language is the packaging. The structural interest is the product. The horse-drawn carriage association is citing road safety concerns.
DTCC confirmed this week that its tokenisation service, covering $114 trillion in DTC-custodied assets, enters limited production in July and full rollout in October. JPMorgan Kinexys crossed $1 trillion in cumulative institutional settlement volume the same week. Fifty-plus firms including JPMorgan, Goldman Sachs, BlackRock, and Citi are participating. Describing $114 trillion on a launch schedule as a pilot is a definition of that word the DTCC did not supply. This is a pilot in the same way that D-Day was a beach excursion.
SpaceX's S-1 disclosed 18,712 BTC accumulated since early 2021 at an average cost of $35,320, worth approximately $1.45 billion. More Bitcoin than Tesla. The June 12 IPO targets a $1.75 to $2 trillion valuation. The Bitcoin disclosure was item seven in the filing, right between "Risk Factors" and "We also have rockets."
What Went Under The Radar
The Strait of Hormuz now accepts Bitcoin. The IRGC charged up to $2 million per vessel in Bitcoin or Chinese yuan for passage through Iranian-controlled maritime corridors during the week of May 21. Twenty-six cargo ships paid. The first Middle East oil shipment to South Korea since the US-Israeli strikes cleared on those terms. Trump announced a peace deal on May 23. Iran denied it within 48 hours. The toll booth operated throughout the announcement and its retraction, no refunds, no chargebacks.
An AI rapper headlined a UK far-right rally on May 21. The Node Project created a synthetic persona named Danny Bones whose track "This is England" reached number one on the iTunes hip-hop chart. Bitcoin QR codes for donations were displayed during the performance. Tommy Robinson: "Even the AI characters are on our side." The donation infrastructure functioned without incident. Blockchain's first killer app continues to demonstrate range.
BlackRock's BUIDL has $2.3 billion in AUM, 102 holders, and 19 active addresses in the last 30 days. The world's largest tokenised Treasury fund offers 24/7 settlement and a liquidity profile that would generate a margin call at most conventional money market desks. "24/7 settlement is a property of the token. Liquidity is a property of the market." The 83 holders who have not moved in 30 days own a car that can go 200 mph on a road that is permanently closed.
Bitcoin Pizza Day turned 16 on May 22. Laszlo Hanyecz paid 10,000 Bitcoin for two Papa John's pizzas in Jacksonville, Florida in 2010, when 10,000 Bitcoin was worth $41. Those coins are now worth approximately $770 million. Hanyecz has stated publicly he does not regret the trade because it proved Bitcoin worked as a currency. He appears to be the only person who required that proof at that price. The rest of us would have been fine with a theoretical proof and a frozen pizza.
Coinbase reported a $394.1 million Q1 net loss and announced a 14% workforce reduction. CEO Brian Armstrong published an eight-point financial reform agenda covering RWA, continuous trading, stablecoin payments, and AI compliance. The company with the largest retail crypto trading volume in the United States is unprofitable at current prices and responding by adding prediction markets, commodities, and derivatives. When the shovel business is losing money during a gold rush, the answer is apparently dynamite and lottery tickets. The agenda is ambitious. The loss is $394 million. Both are Q1 figures, and both will be on the test.
The July 1 Cliff Is Six Weeks Away.
Kriptomat ran for eight years before MiCA uncertainty ended it. Stablr held full EMT authorisation and still depegged. Council Regulation (EU) 2026/506 took effect May 24 with no announcement, and the firms that had not updated their screening were non-compliant before they were aware the regulation existed. Receiving a speeding ticket for a road that was not on any map until you drove on it, but the ticket is still valid.
There is a parallel problem that received almost no coverage this week and will surface as a compliance failure at multiple firms in the next two quarters: KYB tooling at complex LLC, trust, and limited partnership structures. Most eKYC providers have solved adequately for individual identity verification. They fall apart when regulators require full beneficial ownership tracing through every intermediary layer, which is the current requirement. That gap is sitting in the same queue as the FATCA/CRS/CARF applicability question for every crypto business that has not mapped which framework applies to which product. The first reporting deadline is January 2027, covering the full 2026 calendar year. Q4 is not enough time to work this out. Q4 is enough time to work out a panic attack.
If July 1 is still an open question for your business, the structure is at micahub.net. Everything after the licence starts at cointegrity.io.
Our Take
The Polymarket story and the White House Executive Order landed in the same week. Both are access questions. Polymarket built a permissionless settlement layer for political risk and is currently explaining this to Congress. The EO is asking the Federal Reserve to explain why a regulated crypto firm should be denied the equivalent for payments. Both questions are being answered at very different speeds. The congressional probe will take months. The 90-day regulatory clock will not wait for it. By the time the hearings conclude, the EO may have already rewired the plumbing and retired to a beach.
Bitcoin Depot's closure is not a cautionary tale. It is a confirmation that the on-ramp infrastructure built for the 2017 cycle is being replaced by infrastructure built for the 2026 cycle. The replacement has better economics and less exposure to patchwork state bans. Whether the millions of Americans who used those machines have found the replacement is a question the industry has not prioritised. They are too busy building infrastructure for clients who already know what a wallet is.
The Stablr stress test is the story the week underreported. A MiCA-authorised stablecoin depegged on May 24. The framework is seven months into production and has its first adversarial data point. The reserve and safeguarding requirements exist. The question is whether they are sufficient under pressure. The consultation that might address this closes on August 31. The July 1 cliff does not. It is a race between a document and a deadline, and the deadline is not known for reading documents.
This is the space we work in. The EU sanctions package that landed on a Sunday with no announcement. The dual-licence structure that Zero Hash completed while most applicants are still reading the guidance. The KYB gap that will surface as a compliance failure at firms that believed identity verification was a solved problem.
The week had two registers. Loud: a congressional probe, nine thousand machines offline, $320 million in liquidations, an AI rapper at a political rally with a Bitcoin donation QR code. Quiet: an executive order directing six regulators to reexamine a century of banking access rules, two HKMA licences from 36 applicants, a sanctions package effective immediately with no announcement.
The loud register gets the clicks. The quiet register builds the future.
If you are building in this space and want to understand what is actually happening versus what is being discussed, this is what we do. The infrastructure is the story. Everything else is weather, and sometimes the weather includes an AI rapper and a Bitcoin toll booth in the Strait of Hormuz.
Related internal resources: Bitcoin, Ethereum, Stablecoin, Blockchain.