Unchained - Coinbase Acquired Deribit for $2.9 Billion. Here’s Why It Matters - Ep. 831

Episode Date: May 9, 2025

On Thursday, Coinbase announced its acquisition of Deribit in a $2.9 billion deal, the largest merger in the crypto industry to date. In this episode, Owen Lau, executive director and senior analyst at Oppenheimer, delves into why Deribit was such a coveted prize, what this deal means for the global derivatives landscape, and how Coinbase is using its position as a public company to cement its dominance. Plus: The importance of Coinbase paying mostly in stock and barely touching its cash How the derivatives market dwarfs spot trading, and is only getting bigger What this means for CME and smaller crypto exchanges And how Base, Coinbase’s L2, fits into the long game Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Thank you to our sponsors! FalconX Bitkey: Use code UNCHAINED for 20% off Mantle Guest Owen Lau, Executive Director and Senior Analyst at Oppenheimer Timestamps: 👋 0:00 Intro 📢 2:26 What this record-breaking $2.9B deal really means for crypto 🔥 4:39 Why Deribit was the most sought - after acquisition target in the space 📊 5:59 How the derivatives market became bigger than spot — and what’s next ⚔️ 10:16 What this move signals for CME and how the competitive landscape shifts 🛡️ 12:08 Will this deal make crypto safer for everyone? 💸 16:28 Why Coinbase used mostly stock and why that matters 📈 18:59 How the deal changes Coinbase’s revenue outlook going forward 🚀 22:15 Whether Coinbase is building the “WeChat of the U.S.” financial system 🔗 24:32 The role of Base in Coinbase’s future  🤝 25:48 Why M&A is heating up across crypto right now ⚖️ 27:35 How ongoing regulatory uncertainty still casts a shadow 🧠 28:12 What investors should keep in mind when evaluating the risks and rewards 📰 30:40  Crypto News Recap Learn more about your ad choices. Visit megaphone.fm/adchoices

Now what Coinbase offering is, you can come to me, I offer spot, I offer options, I offer future. So that creates a very, like a deeper liquidity pool that can attract traders to come to Coinbase along. That I can trade spots, I can use options to hedge my spot position within Coinbase. I can also use my future position to leverage or to hedge my spot position. So again, this is quite technical, but what that means is it actually reduced the capital requirement for the trader, that is the incentive to move trader from other platforms to Coinbase platform. The capital requirement thing is wheel, so it can attract traders to come to a platform to trade multiple products.

Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. We feature listener comments on every episode, and boy, did we get some hot takes on my recent show on the Ethereum pivot, with Tarun Chitra and Max Resnick. On X, ZK Stim wrote, Why you have Max the Trader talking about Ethereum. Dude is on a crusade to shit on Eith. Very fair and objective take. Let's have Ethereum people talking about Solana now. Also an X, MCF, wrote, but also uniquely positioned. Who else has seen the insides of both houses? Keep the comments coming. We read every single one.

Leave your comment on YouTube, Farcaster, and X, and you might hear it on a future show. This is the May 9th, 2025 episode of Unchained. BitKee is the Bitcoin wallet from the team behind Square and Cash app. It's the first two of three multi-sick hardware wallet with recovery tools that replace the need for a seed phrase. Get 20% off with code unchained. Powered by successful products like Mantle Network and M-Eath Protocol, Mantle is driving the next phase of on-chain finance by supporting ecosystem products, such as the Mantle

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Thank you for having me. So this is the first Unchained Live stream we've done in. while, as I mentioned, but this deal between Coinbase and Deribit is just the biggest deal we've ever seen in crypto history. And you've been covering Coinbase for a while. So what was your reaction upon hearing this news? Yeah, I think maybe three things come up when I heard about these news in the morning. So number one, obviously, you just mentioned this is the largest deal, M&A deal in the crypto industry. I think this is just the beginning of a wave, of crypto MNA and IPO coming up.

The second is, this is a, if you look at the structure of the deal, so this is a large deal, but if you look at the structure of the deal, Coinbase used about $700 million in cash and use $2.2 billion in stock. So I remember during the last crypto winter, a lot of people kind of like Coinbase

was kind of ridiculed by some critics on being a public company. Now I felt like Coinbase finally whipping the benefits of being a public company because they only spend a tiny amount of the cash, use a lot of stock, and make a very large acquisition. This is a very important and positive kind of like set up for Coinbase. We can get into more detail later on if you're interested because this is quite technical. The third one is about Derbit itself is one of the largest or maybe even the largest

crypto option trading platform in the world. I think the number I got was about, they have about 85% market shares in crypto option trading. So that complement with Coinbase spot and also futures offerings into international exchange. So with all three under the same umbrella, it actually provides capital efficient way for traders to trade crypto. So I mean, I know this is again, this is quite technical, but the reason I bring this up is because this is an important deal for Coinbase to expand internationally to challenge some of the largest players outside of the U.S. Yeah, yeah, that makes a lot of sense. So we'll talk a little bit more about that in a moment, but I did also want to ask because I'm sure you're aware that before, there were a number

of companies that were rumored to be trying to buy Deribit. Cracken was one, Robin Hood was another. Why was it in such high demand? I think number one, I just mentioned because they are the dominant player in the crypto option trading. So again, like number 85% market shares, this is highly respectable number. And the second point, I don't think they get enough credit is. Option is actually way more recurring than spot and futures trading. Not many people realize that if you are in the market structure space, you may notice that, you know, exchange like CBOE actually did very well in the first quarter because they focus a lot on the option trading. So from that perspective, you can tell it's not just diversify away Coinbase, you know, core trading from spot and also futures.

It also makes their revenue stream even more stable. It's not obvious, but that's one of the reasons why Deribate is kind of like in high demand. And talk to me a little bit more about the size of the crypto derivatives market and how much bigger you think it can grow. It's a huge number. So if I look at the traditional, by the way, number one is still growing. And if you look at traditional market as an example, the derivative market can be 10x of the sport market. So let's say, you know, that like the spot, like the market cap of like the total crypto companies is let's say $3 trillion. And if the trading volume is let's say, $30 trillion, it could be like 10x higher than that and more than that.

If you look at the crypto space right now, I think 70% of the trading volume actually is in the directed space, not in the spot space. So again, this market is way bigger than a sport market, maybe 10x in magnitude. At the same time, the crypto business is also growing and getting into like trapby space. And, you know, there's a trap by crypto convergence that can even even expand the time. And I would imagine for an exchange, there's an appealing aspect in it's sort of like remove some kind of custody type headaches that are more, you know, of a big concern at a spot exchange. Yeah, exactly. Like custody, it's a big benefit for crypto because it's being digital.

So it's easier for the traders to put their asset into a custody, or maybe you can even have self-custody as well. So there are many ways, many offerings out there already to take care of the custody part. Again, like insufficient trading. don't even think about you can kick your shares and put it under your bed. You have to use like a third-party vendors to handle that. But in crypto, it's way easier. And so as you mentioned, this is already a big part of the market in crypto,

but we would expect that it would grow quite a bit larger. How do you think that will play out over the next several years? Like how do you think that growth will happen? And what will that part of the market look like in a few years? Yeah, so a couple of observations. Number one, I think it may even encourage more private companies, private crypto companies to go public because when they look at Coinbase, right, very large, they only spend $700 million in cash to make a $2.9 billion acquisitions.

Like, think about that, you cannot do that by being a private company. Like, think about it. So if you're private, then you'll think about. how can I leverage my brand? How can I leverage my currency? Going public, it's painful. Believe me, I know Coinbase has gone through a very painful process of being a public company.

People kind of laugh at them, and then they're being tortured by analysts like me being, like they have to answer my questions on a quality basis, and they have to spend extra money on compliance, and also on cost and also on whatever control. So it's a painful process to be a public company. But I think the wave is coming. I think more private companies see the benefit and they will go public.

The second one is M&A. I mean, we have seen like Cracken and also Whipple just, I think it's buying a hidden role. And now you see Coinbase. So I think M&A is coming slowly. The third trend is a little bit unfortunately. But I think it will become a reality. It's the bigger, will become bigger. And the smaller would become more challenging to survive.

So at the end, they either being bought by a larger company or they will disappear slowly. So I think there's a bifurcation trend going on. It's getting more competitive going forward. By the way, the fourth trend is the traffic company. I haven't even mentioned the tributy companies is coming into this space. So what that means is increased competition and the smaller companies need to get the scale. So to me, the scale is the name of the game going forward. Well, talking about competition, CME has a pretty robust crypto derivatives business,

but it just focuses on a couple of tokens and they don't do perpetual swaps. So what do you think this means for the future of this trading instrument in the U.S.? Yeah, so first of all, I think CMD will continue to expand into other tokens. So I think they have XRP, I think they are trying to do. I mean, I think they have the core, Bitcoin and Ethereum. They got into Solonner. And to me, my impression is they will further go down the path and launch more, like, different tokens. So that's one observation.

The other one is, again, they will also go international. So it will only increase competition. I mean, I thought like CMD is just one example. You heard about, I think, Charles Vogue and even Morgan's day. They try to get into this space as well. So I would say competition will increase. Again, it just makes the smaller company harder to operate. So that's why the M&A trend extends to me.

But it doesn't mean that, you know, the fee would go down to zero or there will only be like, you know, like one or two companies remaining. I still think the market is large enough that there will be multiple winners in this space. But I think now it's the moment that they want to capture the momentum. They want to capture the scale so that they can kind of like become bigger down the road. So competition, but it's not new. I just want to go back to like think about the last crypto winter. There were still many competitions.

But at the end of the day, if you are kind of a good actor, if you are compliant, if you are innovative, I think you can still survive. Well, so speaking about, you know, exchanges in crypto that may not survive, I saw that Raul Pal tweeted, not only is the CoinBain's purchase of Deribit a great opportunity for them. It also dramatically removes the left tail risk of a smaller exchange having 80 plus percent of the options market where leverage can cause an issue in a Black Swan event. I just wanted you to elaborate on his comments there. Yeah, I think that's a good point. My interpretation is if you are being a small exchange, your focus may be, you may only have by one or two

products. So what that means is in a good time, you may be fine. But in a bad time, if you are just have one or two products, it may be more difficult for you to survive through the next cycle, right? So we all believe that, you know, have a kind of like agree that the last crypto winter, it's not the last crypto winter. So there will be more and more other cycles coming. So again, go back to the point I try to make earlier.

The scale is better. If you have more diversified product, if you have a more diversified revenue stream, you try to put yourself into a sort of a bigger umbrella under one rule, I do feel like, you know, you can become an all-weather company and survive through the next time cycle. So I think the point is well-ticken. Being part of a larger platform could be the way to go. I mean, if I look at the traditional exchange in the past, I want to say 20 years ago, there were like 20, 30 different exchanges. Now it comes down to like four lodgers.

So after 20 years from maybe 40 to four. So I do believe in some sense the crypto exchange or crypto markets could go through the similar kind of cycle or evolution. All right. So in a moment, we're going to talk about what this means for Coinbase more in depth. We're going to talk about the fact that they're reporting earnings later today. We're going to talk about more M&A activity going on in crypto and just talk more generally about the future of this market. But first, we're going to take a quick word from our sponsors. BitKee is the only Bitcoin wallet on Time Magazine's best inventions list of 2024.

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The heat that Laura is getting from this reminds me of the heat that came to Blackberry owners when the iPhone came out in Canada. And on X, Andrew Fenton wrote, Ethereum is making a play for largest possible total addressable market, not to win a tiny slice of crypto. Amazon sacrificed revenue for years and years to become dominant. That turned out to have been an excellent decision. Please continue writing your reviews or leaving your comments on an episode on YouTube, Farcaser, or X. It might end up on the show. All right. So I'm back to my conversation with Owen. So at the very beginning of the conversation, you kind of referenced what a big deal this was for Coinbase and said we could talk about it more in a bit. So here's your opportunity.

Yeah. So again, go back to the structure of the deal. I think it's worth mentioning because $700 million in cash and $2.2 billion in stock. If you look at the balance sheet, I mean, now I go into quite detail and technical. Like, there. you know, just bear with me. Coinbase had about $8.5 billion in cash on the balance sheet. So what that means is after these $700 million in cash, they still have about $7.8 billion in cash on the balance sheet. And obviously they use tons of stock and 11 million shares in common equity. But what that means is they can still use the cash plus stock combination to make another big acquisitions.

if they find any other opportunities. Why this is important because if you think about many, I don't want to name any other competitors. If you think about some smaller private companies, if they spend $1 billion and $2 billion on one acquisition, they have to make sure this is the right acquisition. Think about it, it can be wrong. If it goes wrong, then it probably used up their whole kind of like dry powder

on their balance sheet. So it just makes the other private companies shop much harder. I'm not saying Coinbase this deal is a bad deal, but what I'm trying to say, hypothetically speaking, even though if it is a bad deal, I don't think so, but just say if this is a bad deal, they still have $7.8 billion on their balance of it. Plus, they still have lots of stock they can use. Of course, if you make a bad deal, then people will be skeptical about making time you use stock, a currency. So the point I try to make it, they just have a lot of dry powder going forward

to take advantage of any additional consolidation or expansion strategy. They are even better right now from a P&L standpoint. Their revenue stream may be even more recurring, going through the next cycle. So the point I try to make here is they have like a very strong balance even after this deal. That makes them, like, put them into a very, like, unique position to take advantage of the next opportunity. Yeah, and I remember that the recurring revenue piece is something that they've been working on. So, yeah, this definitely helps them in that regard. So how do you think this acquisition rounds out Coinbase's business overall? Like, how do you think they have been doing recently? How they have been doing recently? So, again, go back

to their offering. So go back to what Coinbase has. Coinbase is very strong in the US, right? So they have spot trading. They also have derivative trading. Internationally, they just expanded actually last year. They have spot. They just launched, I think, perpetual futures, but they don't have a strong option practice. So these derivative acquisition can actually help their option presence. So now they have spot options and futures. So why is it important? It is because it provides a very strong, like capital efficient value for traders to come. So what that means is if I am a trader kind of outside of the US, if I want to trade options, I have to go to Derriff it.

But if I want to trade spot, if I like finance, I go to Binance or I go to Coinbase or I go to like some other platform. So now what Coinbase offering is, you can come to me, I offer spot, I offer auction, I offer futures. So that creates a deeper liquidity pool that can attract traders to come to Coinbase along. That I can trade spot, I can use options to hedge my spot position within Coinbase. I can also use my future position to leverage or to hedge my spot position. So again, this is quite technical, but what that means is it actually reduced the capital requirement. for the trader. That is the incentive to move trader from other platform to Coinbase platform. Again, I know this is quite technical. Not many people understand what's going on, but the capital

requirement thing is real. So it can attract traders to come to a platform to trade multiple products. Yeah, that makes sense, both from a liquidity perspective and even just like a convenience perspective. So Coinbase recently set up an offshore entity in Bermuda and began selling perpetual swaps to overseas traders. What does that uptake look like? And do you expect that Deerbitt's business will just get rolled into that offering? Yeah, I mean, first of all, when I tracked the number, their first quarter international business was like gigantic. It was like very strong in the first quarter. I think relatively speaking, I think they did internationally. It's even much better than what they did in the U.S. at maybe at least in March volume.

From a structure standpoint, I'm not sure whether how they would roll, like would they roll the Deribet to Bermuda or they would roll Bermuda to the Deribuida. I'm not quite sure if this could be a question for them. But I'm not too concerned about the structure. To me, the number one thing is, you know, don't mess it up, integrate smoothly and preserve the right people, attract the talent to Coinbase. And I think they will do fine. So Coinbase also will report earnings later today. What questions would you want to ask them? Yeah, there are multiple questions in my mind,

depending on when I can ask questions. But I felt like a number of questions come up with, obviously the financials for Derbitt, right? So now we know Derbett, I think, generate positive at just the EBITDA, but are these deals, is these deals are creative or dilative to Coinbase in the near term? So we need to know the exact numbers

and how much that would impact Coinbase trading volume and also the bottom line, most importantly. And number two, just like what you said, is any synergy, like cost synergy that Coinbase can kick out to make these deal more attractive. So that's another thing going on. And then, you know, there are lots of rumors. Or maybe they even confirm that they are getting the banking,

I think federal banking license, right? So that's interesting angle. They are buying a third. They want to become a bank in the U.S. What do they want to be, right? in the future. So sometimes I get this question, what is the end game for Coinbase longer term?

So I felt like those are legit questions for Brian tonight. And well, when you think of that question, is there a path that you feel like would make the most sense for them? I felt like, I don't know for sure, but my sense is they want to be, they want to be a super app. Just like the recheck in China,

they may want to be the recheck in crypto, like global crypto space. That's what I'm needing two words, but I'm not sure I'm not Brian Armstrong, so I would ask him these questions and see how he respond to that. But another kind of question is, do they really want to get into the traffic space? This is pretty important. If you look at other competitors like Cracken and Robin Hood, they play both in track by, like trade equities and bonds and commodities and also crypto. But in the pack, the dollar coin base really want to focus on crypto space. after these deal, I mean, Derby is still crypto, but they want to get a banking license.

I don't know whether they really want to be like, you know, the Amazon or J.T. Morgan or really like the recheck in the crypto space. So I felt like, you know, that could be an interesting conversation tonight. And then when you look at their activities in Defi, how, you know, they have base. Yeah. How do you kind of square this activity with that? Yeah, exactly. This is like the question for many people. They have base. they should be or they could be a technology provider.

Maybe like three years ago, four years ago, that's what I thought they are leaning towards, into, getting to become a more like a technology provider. But the best of my base has gotten a lot of traction in terms of revenue contribution. I'm not saying a number of users. I think they got a very great phase of users. I think they try to get the transaction fast

and cheaper, I think they achieved on that. But in terms of regular contribution, it's still not pretty material. So to me, that's why I thought like a longer term, they could become, or they may want to become the recheck in the crypto space. Yeah, yeah. The way that I view the base activity is more like they are setting up an offering now so that way they don't get disrupted in the future.

It's like they feel like they could probably see where that trend will go over X number of years. So that's my read on that. So, you know, as we mentioned, this is the biggest M&A deal in crypto history. And it comes on the back of a number of other recent $1 billion plus acquisitions in crypto. So in late March, Krakken agreed to acquire a Ninja Trader, a U.S. Retail Futures Training platform for $1.5 billion. In April, Ripple announced plans to acquire Credit Network Hidden Road for $1.25 billion.

So why do you feel like all this MNA activity in crypto is so frothy right now? Yeah, I think the number one reason is people start to realize that there's a day and nice ship in terms of the regulatory clarity or regulatory framework after Trump got elected, right? He's the most pro-cryptal president and then most pro-crypto administration and even look at the SEC regulators. They are pretty pro-fifical and also Congress. So you can feel like almost everybody in that world in DCR ProPripto. And that kind of like it becomes a key catalyst for even trapped by companies to feel comfortable to get into this space or being bought by a crypto company. So the reputation risk is lower right now.

And they also see the potential in crypto, such as like the tokenization, how to use blockchain to make the transactions fast and cheaper. I do think many people see the benefit, but they were scared by the last administration. They didn't want to get into this space. And once they get in, they are being sued. They don't want to put themselves into that situation. So there are lots of pen of demand. Once they see that, there's a path for regulatory clarity, then the activities happen.

So I felt like, you know, regulatory clarity is a key driver for that activity. And has the SEC or any other regulator? discussed this particular market, the crypto derivatives market? The derivative market should fall under CFDC, not the SEC. I'm just looking at me. Now we don't have it. Now we don't have rules, right? Just make it clear.

There's no laws and there's no kind of like rules. Crime C. Right, for the crypto space. In a traditional market, equities fall under SEC, but for derivative, it falls under CFTC. That's why we need regulations. So that's why we need the bill. We need the market structure bill, right? That's what we are waiting for.

All right. Well, last question for you. Now that you're seeing this news and, you know, in the context of everything else that we discussed, what do you see is the biggest opportunities and risks for investors when it comes to, you know, derivatives or really any of these changes that we've discussed? If you look at from an institutional investor standpoint, I do feel like more and more, there could be more and more crypto companies going, So what that means is it offers a lot more opportunities and choices for investors to get into this space and get exposure in crypto, right?

So right now you can put money into Coinbase, you can put money into the miners, you may be able to put money into the spot Bitcoin ETF, right? So those are the instruments. But I felt like once we get more clarity and after these deals, more private companies would go public in in the crypto space that offers investors more choice to get exposure in the blockchain space. So I think that's one key development for me. In terms of the risk, again, like, our company is coming into this space,

competition increases, what does that mean to the other smaller players? I don't know. The reality is it will just create a lot more pressure. It will make the environment a little bit more, you know, competitive to operate. So that could be, that could present some risk to some of the companies going forward. All right, Owen. Well, it has been a fantastic conversation. Thank you so much for joining us on this Unchained live stream.

Thank you very much. Thank you very big knee. Don't forget. Next up is the weekly news recap. Today, presented by Unchained producer Pam Majimdar. Stick around for this week in Crypto after this. short break. Picture this. The crypto market just got wrecked by billions in liquidations. You need to figure out what happened and what's next. But where do you even start? Meet Focal by

Falcon X, your AI-powered crypto analyst. It's like having a legion of experts at your fingertips, ready to break down market-moving events, chart Defi Protocol TVL, or explain why Solana Mindshare is rising. Get clarity in a world of noise with Focal. Learn more at askfocal.com. Welcome to this week's Crypto Roundup. In today's recap, Ethereum launches its biggest upgrade in years. President Trump hosts crypto dinners while Democrats storm out of Congress, and Solana fixes a critical bug. Plus, legal drama for samurai wallet, movement labs shakes up leadership, Robin Hood exploring

blockchain for stock trading, and prediction markets get the green light. Lastly, in the funbits, FTX fumbles of five. $500 million opportunity. Thanks for tuning in to the weekly news recap. Let's begin. Ethereum activates major upgrade. Ethereum has officially launched the Pectra upgrade, a major network overhaul that observers say is its most consequential development since the 2022 merge.

Activated at Epoch 364-032, Pectra combines the Prague and Electra upgrades and implements 11 Ethereum improvement proposals aimed at enhancing staking operations, user wallet functionality and layer 2 scalability. A highlight of the upgrade is EIP 7702. The proposal allows externally owned accounts to temporarily behave like smart contracts, enabling gasless transactions, token-based fee payments, and advanced wallet recovery features. Quote, it is Ethereum's glow-up, wrote pseudonymous developer Binji underscore X on X. Another key change, EIP 7251, raises the maximum effective validator balance from 32-Eath to 2048-Eth. This allows staking operators to consolidate multiple validators, reducing bandwidth needs

and operational costs. Quote, small operators can compound their stake directly, while large ones can consolidate validators, explained Ethereum Foundation's Tambico. The upgrade also includes EIP 7691, which doubles blob throughput, improving layer-to-efficiency, and EIP 6110, which cuts validator onboarding time from hours to minutes. Former Celsius CEO Alex Michinsky sentenced to 12 years. Alex Michensky, the former CEO of collapsed crypto-lender Celsius, has been sentenced to 12 years in prison for orchestrating what prosecutors previously called,

quote, one of the biggest frauds in the crypto industry, according to inner city press. The sentence was handed down by U.S. District Judge John George Qualtell on Thursday in New York. Mishinsky 59 pleaded guilty in December to commodities fraud and a scheme to manipulate the price of Celsius's native token, sell. Prosecutors alleged he misled customers about the company's financial health, contributing to billions and losses before SELCUS filed for bankruptcy in 2022. While defense attorneys requested a sentence of just over a year, prosecutors pushed for 20 years. The judge ultimately ordered Mishinsky to report to prison by September 12. Trump courts crypto donors.

President Donald Trump is ramping up fundraising efforts with two cryptocurrency-themed dinners this month. Even as a report raises questions about profits tied to the Melania meme coin. The first event, dubbed the quote, Crypto and AI Innovators dinner was held to support the MAGA Inc. Super PAC, with seats priced at $1.5 million each. A second dinner set for May 22 will bring together the top 220 holders of the Trump meme coin. News of the gathering pushed the tokens value up more than 50%. quote, I want crypto, Trump said during a Sunday interview on Meet the Press.

Quote, I think crypto is important because if we don't do it, China's going to. It's very popular. It's very hot. At the same time, an investigation by the Financial Times found that 24 wallets purchased $2.6 million worth of Melania tokens just minutes before Melania Trump announced the project online. The token price surged from $2 to nearly $13, with traders liquidating most holdings within 12 hours and earning nearly $100 million. The firm behind the token, MKT World, has reportedly withdrawn $64.7 million in profits from sales and fees.

In related news, Senate Democrat Richard Blumenthal launched an inquiry into Trump's crypto-linked ventures, requesting records from World Liberty Financial and the Trump meme coin project over potential legal violations and foreign entanglements. Crypto hearing derails as Democrats walk out over Trump ties. A congressional hearing on a major crypto market structure bill collapsed into partisan conflict Tuesday as House Democrats staged a dramatic walkout in protest of President Donald Trump's expanding involvement in the crypto industry.

The joint hearing, hosted by the House Financial Services and Agricultural Committees, was set to examine new legislation proposing regulatory roles for the SEC and CFTC. But tensions flared when Representative Maxine Waters, Democrat California, refused unanimous consent to proceed, citing, quote, the corruption of the President of the United States and his ownership of crypto. Waters and several Democrats exited the room, convening a separate event titled the, quote, Democratic hearing to discuss Trump's crypto corruption.

There, experts raised concerns over potential violations of the emoluments clause, referencing reports that Trump's crypto ventures may have added $2.9 billion to his personal wealth. Meanwhile, Republicans rebranded the hearing as a roundtable, allowing witnesses such as Coinbase Executive Greg Tushar and former CFO, FTC chair, Rosten Benman, to continue discussion. But the walkout underscored growing doubts about whether meaningful crypto legislation can pass by the August deadline President Trump has publicly urged. Movement Labs ousts co-founder after secret token deals. Movement Labs has terminated co-founder Rushi Manchay following revelations of undisclosed token agreements and governance failures tied to the move

token launch. The decision came days after Coinbase delisted move, citing concerns about the project's transparency and compliance. In a post on X, movement labs announced Monsche's immediately dismissal, stating the firm, quote, will continue under different leadership. The termination follows a coin desk investigation revealing hidden arrangements between movement-linked entities and market makers, including Rentec and Web3 Port. Internal documents show Monsche facilitated deals that enabled Web3 port to offload 66 million move tokens, resulting in about $38 million in downward pressure. In response, Movement Labs has launched a new entity, Move Industries, appointing Torab Tarabi as CEO and Will Gaines as CMO. The new leadership pledged governance reforms and increased transparency.

The project has also commissioned an independent review by private intelligence firm Groom Lake. CFTC withdraws appeal against Kalshi. The U.S. Commodity Futures Trading Commission has moved to dismiss its appeal against prediction markets platform Kalshi, effectively clearing the way for Americans to trade on political outcomes, such as Congressional and control. The agency's voluntary dismissal filed Monday in the D.C. Circuit Court followed a unanimous three to zero commission vote with one abstention. Kalsh's legal battle began in 2023, after the CFTC denied its request to list event contracts on House and Senate control, citing concerns over unlawful gaming. A federal judge ruled in Kalsh's favor last September,

prompting the CFDC to appeal. However, under acting chair Carolyn Pham, the agency has adopted a more streamlined enforcement strategy and opted to drop the case. Quote, today is historic, Kalshi's CEO, Tarek Mansour, told Reuters. He added that this result is proof that doing things are right way, quote, pays off. As part of the agreement, both parties will cover their own legal fees, and Kauci waived any right to sue the CFDC for past litigation. Salana fixes major bug. The Salana Foundation disclosed that developers had fixed a security flaw that could have allowed

hackers to create unlimited amounts of certain tokens or even take them. from other users. The issue was found on April 16 and affected Token22 confidential tokens, which are designed for private transactions on the network. The problem was tied to how the system checked private transactions using cryptographic proofs. A missing step in the process made it possible for someone to trick the system into approving fake transactions. Salana quickly responded by working with development teams and outside security firms to create a fix. Two patches were sent to validate our operators starting April 17, and most had updated. their systems by the next day. The Salana Foundation confirmed that no one took advantage of the

bug before it was fixed and that all funds are safe. Even so, the quiet way the issue was handled has sparked debate about how decisions are made behind the scenes on the network. Samurai Wallet lawyers accuse prosecutors of hiding key evidence. Attorneys for Samurai Wallet are asking a federal judge to dismiss charges against the crypto-mixing services co-founders, claiming that U.S. prosecutors withheld critical evidence. According to a court filing, the Treasury's Financial Crimes Enforcement Network, FinCEN, told prosecutors in August 23 that Samurai did not require a money transmitter license. Despite that, charges were filed six months later. The U.S. government has accused Samurai wallet of enabling over $2 billion in illegal transactions,

including $100 million linked to online black markets. The company's founders, Kiann Rodriguez and William Hill, were indicted for operating an unlicensed money transmitting business and conspiracy to commit money laundering. Lawyers for the defense say the government failed to disclose Finson's guidance until April 2025, well beyond the required time frame under the Brady Rule, which mandates timely sharing of evidence that could help the defense. The suppressed evidence could have influenced bail decisions and shaped early motions in the case.

A hearing on possible dismissal is expected. Robin Hood explores blockchain to bring U.S. stocks to European investors. Robin Hood is developing a blockchain-based platform to let retail investors in Europe trade tokenized versions of U.S. securities, according to sources familiar with the project. The company is in ongoing talks with Arbitram and Solana as possible partners to support the initiative, though no final agreements have been made. The platform would allow European users to trade U.S. stocks around the clock using tokenized assets, aiming to reduce settlement costs and increased market access. The move follows Robin Hood securing a brokerage license in

Lithuania, enabling it to operate across the European Union. Time for Funbits! FTCSells sells future fortune for pocket change. In what may go down as one of the greatest oops moments in crypto bankruptcy history, FTCS liquidators managed to turn a $200,000 stake into a $500 million regret. Back in April 2020, the FTX estate offloaded its investment in any sphere, the AI startup behind coding assistant cursor, for the same $200,000 Alameda research originally paid. At the time, it probably felt like a routine item on the bankruptcy to-do list. Fast forward to this week. Cursor just closed a $900 million funding round led by Thrive Capital,

ballooning any sphere's valuation to a sizzling $9 billion. That $200,000 stake? It could have been worth half a billion dollars today. Cursor's user base and revenue have exploded, making it one of the fastest-growing AI companies on record. Meanwhile, FDX creditors are left staring at the lost windfall like someone who sold 10,000 Bitcoins for some pizza. And that's all.

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