Market Maker Flowdesk Doubled Down on the U.S. as Things Looked Bleak. Now That Bet Is Paying Off

Flowdesk's CEO made a contrarian bet on the U.S. while the SEC was waging war on crypto. Fast forward a year, and the country has bitcoin ETFs, ether ETFs are imminent and pro-crypto legislation is before the Senate.

By Sam Reynolds Jul 17, 2024 at 9:51 a.m. UTC

Market Maker Flowdesk Doubled Down on the U.S. as Things Looked Bleak. Now That Bet Is Paying Off

Bitwise Asset Management and the Hyperliquid Policy Center are pressing the US Securities and Exchange Commission (SEC) to revise its proposed crypto rules, seeking clearer guidance on token classifications, airdrops and secondary-market trading in comment letters submitted Monday.

The requests come as the SEC closes public comments Tuesday on its proposed Regulation Crypto Assets, which would create exemptions for qualifying crypto fundraising and a conditional safe harbor for tokens associated with investment contracts.

In an Oct. 19 comment letter, Bitwise Asset Management urged the SEC to clarify how investment managers should determine whether a crypto asset is subject to securities laws, arguing that managers need a standard they can apply using “publicly available information.”

The firm also sought clearer rules on when managers can rely on an issuer’s proposed Form TR filing, which would certify that an investment contract has ceased to exist, and how they should assess tokens when no such filing exists.

Source: US Securities and Exchange Commission

In a separate submission, the Hyperliquid Policy Center urged the SEC to broaden its proposed safe harbor, arguing that it could come too late in a project’s development. The group called for clearer protections for airdrops that reward network participation, as well as guidance on token buybacks.

Hyperliquid also warned that the proposal “fails to provide clarity” on whether unregistered intermediaries can facilitate token trading or whether tokens can trade freely through onchain protocols. It urged the SEC to address secondary-market transactions directly rather than leaving exchanges and decentralized trading venues facing regulatory uncertainty.

Related: House Finance panel chair says regulator actions on crypto ‘fall short’ of CLARITY bill

SEC proposal faces legal and investor protection objections

While industry participants sought changes to the proposed rules, former SEC enforcement official John Reed Stark and Duke University finance scholar Lee Reiners took a different position altogether. In an Oct. 16 comment letter, they urged the commission to withdraw the proposal entirely, arguing that it exceeds the agency’s statutory authority and would weaken investor protections.

Stark and Reiners said that existing securities laws and the Supreme Court’s Howey test already provide a framework for regulating crypto offerings. They argued that the fundraising exemptions would weaken investor protections, while the proposed safe harbor would allow issuers to effectively remove their tokens from securities oversight through self-certification.

The two also warned that adopting the rules in substantially their current form would invite an immediate legal challenge, potentially resulting in the framework being struck down.

With the public comment period closing Tuesday, the SEC will review the submissions before deciding whether to revise, adopt or withdraw the proposed rules. The commission has not announced a timetable for a final decision, and any final rule would require a commission vote before taking effect.

Magazine: Can the SEC and CFTC’s pro-crypto rules be overturned? Legal opinion

Bitwise, Hyperliquid Challenge SEC Crypto Rule Framework

Crypto researcher Stacy Muur has identified 82 digital asset projects and protocols that have reportedly shut down in 2026, raising questions about the financial sustainability of businesses across decentralized finance, blockchain infrastructure and Web3 gaming.

The list, published on X on Tuesday, includes Balancer, Radiant Capital, Neon EVM and Step Finance, among dozens of others. Muur described the number of closures as unlike anything she had previously witnessed.

The shutdowns follow a prolonged bear market, with Bitcoin (BTC) retreating from its October 2025 record high above $126,000 to below $60,000 earlier this year, adding to the financial strain on projects already struggling to attract users and generate revenue.

Source: Stacy Muur

Ethereum layer-2 network Blast is among the most prominent casualties. As Cointelegraph reported, the project announced its shutdown earlier this month, citing no “credible path” to economic viability. The decision marked a sharp reversal for a network that once attracted more than $2 billion in deposits.

Other projects have encountered different problems. In February, Step Finance shut down following a major treasury breach, while Radiant Capital announced in June that it would wind down operations after failing to recover from a 2024 exploit. Meanwhile, Coinbase-backed Satori Finance ceased operations after concluding that its revenue could no longer support the business.

Related: $4.2B crypto bank Anchorage Digital cuts 17% of workforce: Report

Why are so many crypto projects shutting down?

Research published by DeFiLlama in August identified 100 crypto projects that had announced shutdowns in 2026, including 40 in the preceding 90 days. The findings suggest that many projects struggled to attract enough users or generate sufficient revenue to sustain operations.

The most commonly cited reason was a lack of product-market fit, followed by depleted funding, insufficient revenue and decisions to pivot to other products.

Collectively, the projects raised approximately $1 billion and generated $250 million in cumulative fees. Nine raised more than $50 million each, suggesting that substantial financial backing offered little assurance of long-term survival.

The most commonly cited reasons for crypto project shutdowns in 2026. Source: DeFiLlama

The closures come as crypto investment becomes increasingly concentrated. According to DeFiLlama, venture funding rose in the first half of 2026 compared with the previous year, even as the number of deals fell 80%. Meanwhile, mergers and acquisitions totaled 87 transactions at the time of the report, already 65% higher than the previous year.

Related: Crypto Biz: Wealthy investors are buying crypto, but their advisers aren’t sold

Crypto Shutdowns Surge as Funding and Revenue Dry Up

Research Hub Bespoke research, primers, and quarterly updates trusted by allocators and protocol teams.

AI agents are set to become a trillion-dollar market, CEO predicts

Strive, the Bitcoin treasury company led by chairman and CEO Matt Cole, closed its upsized initial public offering of SATS preferred stock on Oct. 20, raising $630 million gross, according to the company’s announcement.

The company has not specified how much of the proceeds it will use to buy Bitcoin (BTC).

Strive sold 7 million shares at $90 each. The company estimated net proceeds of $608.15 million after underwriting discounts, commissions and expenses, according to BitcoinTreasuries.net. In an SEC filing, Strive said it intended to use the funds for general corporate purposes, including Bitcoin purchases, working capital, income-generating assets, capital expenditures, share repurchases and acquisitions.

SATS carries a 15% annual dividend on its $100 stated amount, equivalent to $15 per share annually if paid in full. Dividends are cumulative and payable when declared by Strive’s board. At the $90 IPO price, the stated dividend represents an annualized amount equal to 16.67% of the purchase price.

At an illustrative Bitcoin price of $82,500, Strive’s estimated $608.15 million in net proceeds could purchase approximately 7,372 BTC before fees. If fully allocated to BTC, the purchase would increase Strive’s reported holdings from 36,818 BTC to roughly 44,190 BTC, potentially surpassing Metaplanet’s reported 44,000 BTC.

SATS dividends are scheduled to be payable each business day beginning Nov. 9, subject to declaration. The first payment, if declared in full, will include accruals dating from the Oct. 20 closing.

Strive chief risk officer Jeff Walton said the company has no debt or maturities and is focused on a single obligation: paying dividends.

Magazine: Made an ‘honest’ mistake with crypto taxes? New bill offers way out

Strive Raises $630M in Upsized Preferred Stock Offering

Blockchain network Injective has entered into a memorandum of understanding with South Korean digital asset custodian BDACS to bring a won-backed stablecoin to its tokenized asset markets, potentially allowing institutions to settle transactions without relying on US dollar stablecoins.

According to a Tuesday announcement, BDACS’s KRW1 stablecoin would serve as the exclusive won-denominated settlement asset for real-world assets (RWAs) on Injective, allowing institutions to trade and settle tokenized assets directly in Korean won.

BDACS says KRW1 is fully backed by Korean won reserves. Minting and redemption would initially be limited to approved institutional partners, subject to regulatory approval.

The agreement comes as South Korea develops rules for won-backed stablecoins under its proposed Digital Asset Basic Act, which the government aims to finalize by the end of 2026. In the meantime, the country’s five largest crypto exchanges recorded net stablecoin outflows for 18 consecutive months through June, according to industry data cited by Cointelegraph.

Injective is a layer-1 blockchain that has increasingly focused on tokenized assets. In August, its institutional services arm registered with the US Securities and Exchange Commission as a transfer agent, allowing it to maintain ownership records and facilitate securities transfers. Injective’s native token has a market capitalization of roughly $887 million, according to CoinMarketCap data.

Related: China’s P2P stablecoin wallets surge 43x, Korea’s $450B crypto economy: Asia Express

South Korea moves toward won-backed stablecoin regulation

South Korea is still debating who can issue won-backed stablecoins as lawmakers work on the Digital Asset Basic Act.

A July policy report by Hashed Open Research and the Solana Policy Institute called for greater flexibility in stablecoin issuance and interim licensing guidance while the legislation is being developed. The proposed law would establish a broader framework for digital assets, covering stablecoin issuance, disclosures and market rules.

South Korea’s efforts follow the passage of the US GENIUS Act, which established a federal regulatory framework for payment stablecoins, and the European Union’s Markets in Crypto-Assets Regulation (MiCA), which includes rules governing stablecoin issuers.

Industry data shows the stablecoin market remains overwhelmingly dollar-denominated, with US dollar-backed tokens accounting for more than 99% of the total supply.

Related: Mastercard launches stablecoin risk screening for banks and payment providers





Injective, BDACS Plan Korean Won Stablecoin for RWAs

Stablecoins moved more than $400 million an hour in adjusted transfer volume during the third quarter of 2026, as quarterly activity reached $891 billion, more than quadrupling since early 2023, according to a new report commissioned by Coinbase.

The report found that 73% of screened stablecoin transfer volume occurred outside US banking hours, including nights, weekends and holidays.

Distribution of stablecoin transfer volume by time of day. Source: Coinbase and The Block Research, via Dune Analytics

Seven of the 10 largest US banks have tested stablecoins or tokenized deposits for settlement, while 30% of mid-market companies conducting cross-border business are using or piloting stablecoins, up from 10% in 2024. Business-to-business payment volume also rose 36% year over year.

Conducted by The Block Research, the findings identified 293 million blockchain addresses holding stablecoins, exceeding the combined number of cards issued by American Express and Discover, though researchers cautioned that addresses do not necessarily represent individual users.

The report also estimated that moving 80% of international transactions onto stablecoin networks could add $155 billion to global GDP annually and free up roughly $3 trillion in liquidity currently held by banks to support cross-border payments.

Those projections are based on hypothetical adoption scenarios rather than observed economic gains. Researchers also acknowledged that widespread stablecoin adoption could reduce bank lending, potentially offsetting some of the benefits of faster and cheaper payments.

Related: Visa, Mesh partner to enable crypto spending at 175M merchant locations

Survey finds growing demand for crypto services at US banks

A separate survey released Monday by the National Cryptocurrency Association found that 42% of US adults, representing approximately 112 million people, would be more likely to open an account with a bank offering crypto services or use that institution for more of their financial needs.

The survey found that 18% of US adults would like to buy or use stablecoins through their primary bank or financial institution. However, 64% said their bank, credit union or financial advisor had never raised the topic of cryptocurrency, while 43% did not know whether their bank offered crypto services.

Americans’ interest in crypto banking services by demographic group.

Source: National Cryptocurrency Association, 2026 Crypto at the Bank Report

Stablecoin market cap remains flat despite rising transaction volumes

Despite increasing transaction activity, the stablecoin market capitalization stood at $301.42 billion on Tuesday, a decline of about 0.6% from $303.14 billion on Oct. 20, 2025, according to DefiLlama data.

Last week, Standard Chartered pushed back its forecast for the stablecoin market to reach $2 trillion from 2028 to 2030, citing slower supply growth. Citi, meanwhile, has projected a $1.9 trillion market by 2030 in its base case, with a bullish scenario reaching $4 trillion.

Magazine: Agents can trade 24/7 — but Yat Siu warns you could lose access at any time

Stablecoin Transfers Quadruple to $891B in Q3 2026

More companies are formally objecting to having tokenized versions of their shares available on the stock platform proposed by cryptocurrency exchange OKX and the New York Stock Exchange’s parent, the Intercontinental Exchange.

In a notice updated Monday, the joint venture between OKX and the Intercontinental Exchange (ICE), called OKXICE, reported receiving 16 notices of issuer objection from companies including Microsoft, Google’s parent company Alphabet and Goldman Sachs. The objections did not include specific reasons for the notice to OKX, but one expert told Cointelegraph that they could relate to “not knowing what happens to their price” on the proposed platform.

Speaking to Cointelegraph on Tuesday, OKXICE co-chair and former New York Governor Andrew Cuomo said that these notices were “not objections,” citing the Securities and Exchange Commission (SEC) “opening up to a global 24/7 marketplace.” He characterized objections as some companies standing on the side of a pool while letting others jump in and test the waters for OKXICE’s tokenized stock model.

Cuomo added:

“There are going to be a lot of companies that say ‘we don’t want to be the first, we wanna see how it goes’ [...] that is 100% to be expected, and there will be more.”

Cuomo said earlier this month, when OKX and ICE filed with the SEC, that the proposed tokenized stock trading platform would offer shares for more than 60 companies listed on US exchanges. Of the 62 proposed companies, about 25% have issued objections.

According to OKXICE, the proposed platform would operate 24/7 using permissioned Uniswap v4 liquidity pools deployed on XLayer. Each tokenized stock would be paired with one of three payment stablecoins: Tether’s USDt (USDT), Circle’s USDC (USDC) or Global Dollar (USDG).

Related: JPMorgan projects Bitcoin to outperform US stocks and gold over next decade

’There will be more’ — OKXICE Co-Chair on Companies Objecting to Tokenized Stock Venture

How Stable is building a payments network like Venmo

Crypto traders can put AI agents to work around the clock, but Animoca Brands chairman Yat Siu warns that users risk building their trading routine around a service they don’t control.

An agent can keep searching for new information and alert its user to developments they might otherwise miss, Siu tells Cointelegraph on the sidelines of Token2049 Singapore.

He uses conference planning as an example. A chatbot could supply a list of events when asked, but an autonomous agent would be on the lookout for new announcements and suggest attendance when a worthy event popped up.

But the technology still has teething problems. Siu’s own agent became so focused on crypto trading and investment management that it tried to interpret unrelated questions as being about crypto. The solution is to run multiple, specialized agents instead.

In a 2025 survey, 14.5% of respondents said they would let AI agents manage their entire crypto portfolio. Source: CoinGecko

“If you have one agent that handles your personal schedule, that handles your family schedule, that handles your trips … and on top of it gives you advice on your crypto, that’s not just going to be confusing for the agent. It’s going to be confusing for you,” Siu says.

The questions that set trading strategies apart

It’s also worth noting that running an agent won’t necessarily give you edge. A thousand people asking AI about the same trade could receive roughly the same answer, Siu says.

Regulators have taken note of the possibility that AI-driven traders can pile into the same positions. The Bank of England’s Financial Policy Committee warned in April 2025 that widespread use of similar models could lead investors to take related positions during periods of stress and amplify market shocks.

Related: Tech chief says EU can fend off rogue AI risk: Report

Responses diverge when users ask follow-up questions rooted in their own knowledge and concerns.

“Suddenly you query and you ask, and then your taste or your ideas or your thinking starts forming into it,” he says.

Over time, an agent can learn what its user prefers and begin trading along those lines. Those inputs help shape personalized crypto trading strategies.

AI agents receive wallets and trading tools

Crypto firms are already giving AI agents the tools to handle money alongside information.

Coinbase introduced Agentic Wallets in February, allowing agents to spend and trade crypto within limits set by users. Binance launched AI Agent Skills in March to give agents access to live market data and the ability to place and manage spot orders.

Related: AI potential to drive crypto demand remains ‘underappreciated’: BlackRock

Such tools allow users to delegate to agents more of the work required to follow markets 24/7 and potentially capture opportunities during the wee hours, without compromising sleep.

Siu sees human input continuing through the ideas and questions that guide an agent. AI can learn a user’s preferences over time, he says.

“By human input, I don’t mean human in the loop that approves it,” he says. “But the human is the one that ultimately is going to say, ‘Wait, you should look at this.’”

The privacy cost of an AI that knows you

Siu suggests treating an AI assistant like a third-party adviser. He says that before handing over a document, consider what information the agent needs to answer the question and what can be left out.

“What about your personal finances, what income you make, who your closest friends are?” Siu asks. “These are small little details that they don’t know about you, and now they have permission to know that about you.”

A trader might spend months teaching an agent which markets to follow and what information to digest before making a decision. An agent can remember the conversations to save the user from having to explain the same preferences over and over again.

Some 71% of US adults believe increased AI use will make their personal information less secure, according to a 2026 survey. Source: Pew Research Center

The danger is that the company running that service would still control access and an account suspension could interrupt everything you’re doing all at once.

Siu asks users to imagine an assistant that has learned about them over years, only to disappear one morning.

“At minimum, you have the right to download your data so that you can basically transfer it somewhere else so that another agent might be able to take over,” Siu says.

Magazine: Capital starting to rotate back to crypto from AI: Raoul Pal

Yat Siu Warns of Losing Access to Your AI Trading Agent

The Swiss Financial Market Supervisory Authority (FINMA) approved what it said is the country’s first Bitcoin exchange-traded fund (ETF) that invests directly in Bitcoin and is accessible to retail investors.

The financial regulator’s Tuesday announcement cited a “growing interest” in cryptocurrency investments, particularly Bitcoin (BTC).

While no fund issuer was identified by the regulator, it said multiple providers have submitted or announced Bitcoin ETF applications.

SIX Swiss Exchange announced in August 2025 that iShares would begin trading a Bitcoin exchange-traded product, fully backed by BTC held in cold storage by Coinbase Custody International Limited.

The approval clears a significant regulatory hurdle for the launch of Switzerland’s first retail-accessible ETF that invests directly in Bitcoin. The announcement did not specify a launch date.

In 2021, FINMA first authorized a fund for qualified investors that invests primarily in a basket of cryptocurrencies. The regulator said it granted an exemption from standard risk-diversification requirements, citing Bitcoin’s “long trading history and a particularly high trading volume” compared with other digital assets.

Still, the regulator emphasized that BTC investments carry market risks, such as the possibility of the invested capital losing a significant amount of its value, citing the high volatility of cryptocurrencies.

Switzerland is regarded as one of the most crypto-friendly European countries. In 2023, the Swiss city of Lugano adopted Bitcoin and Tether USDt (USDT) payments for all municipal fees, one of the world’s first city administrations to do so.

Related: Spar supermarket in Switzerland starts accepting Bitcoin payments

FINMA approves Switzerland’s first Bitcoin ETF for retail investors

A wallet linked to the Drift Protocol hack sent about $61 million in Ether (ETH) to Tornado Cash, a service that obscures transaction trails.

The wallet deposited 25,700 ETH to the cryptocurrency mixer over two hours on Tuesday after two months of inactivity, blockchain analytics platform Lookonchain said in an X post.

The exploiter’s addresses held about 81,454 Ether, worth roughly $194 million, according to Arkham. Crypto mixers pool funds from multiple addresses and obscure fund trails, making tracing harder.

Drift, a Solana-based decentralized exchange, reported about $295 million in losses from the April 1 hack. Drift said in June that a forensic investigation by cybersecurity firm Mandiant attributed the attack to UNC6862, a North Korean threat group.

Drift opened claims and redemptions for DFX recovery tokens on Oct. 1. The tokens give affected users a claim on a recovery pool, which held about $3.1 million at launch and receives exchange revenue and any recovered funds.

Drift exploit ranks as the third-largest crypto hack of 2026, according to DefiLlama. Other notable exploits include the $387 million Bitget hack and the $320 million Liquid Network exploit.

Related: Anthropic warns ‘AI worms’ may autonomously spread across devices like a virus

Drift Exploiter Sends $61M in Ether to Tornado Cash

The U.S. dollar has lost at least 20% of its purchasing power in just five years, using the Fed’s own favorite inflation gauge. Sam Callahan explains why financial repression is already happening, from core PCE averaging 3.7% to the U.S. bond market’s steepest drawdown in history. He argues the policy is “working great. It’s just not working for the people.”

Chapters:

0:00 – Sam Callahan on Why Brazil Was Ready for a Bitcoin Treasury Company

2:05 – MSCI’s Exclusion: Why “Bitcoin Is Permanent”

4:18 – The Global Debt Binge and Why Debasement Is the Easy Way Out

5:55 – The Dollar Lost 20% of Its Purchasing Power in Five Years

7:03 – Financial Repression: Working for the Government, Not the People

8:17 – The BIS, Gold’s “Monetary Protest” and Central Bank Credibility

12:13 – When Will Central Banks Adopt Bitcoin?

14:10 – Gold, Bitcoin and the Dollar: The Three Pillars of Reserves

16:50 – Does Bitcoin Need Lower Rates? Why Fiscal Dominance Matters More

19:00 – Why All Roads Lead to Currency Debasement

DISCLAIMER: The views and opinions expressed in this show are those of the participants and do not necessarily reflect the official policy or position of BTC Inc., Bitcoin Magazine, or any affiliated entities. This content is provided for informational and educational purposes only and should not be construed as investment, legal, tax, or accounting advice. Nothing contained in this show constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or financial instruments. Viewers should consult their own advisors before making financial or business decisions.

Market Maker Flowdesk Doubled Down on the U.S. as Things Looked Bleak. Now That Bet Is Paying Off

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