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Michigan House Rep Loses Primary after $2M Support from Crypto PAC

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Michigan House Rep Loses Primary after $2M Support from Crypto PAC

Michigan State Representative Donavan McKinney won a Democratic primary against incumbent House Representative Shri Thanedar in a race that raised accusations of payback by the cryptocurrency industry.

McKinney won the primary for Michigan’s 13th Congressional District with 51.9% of the vote against Thanedar’s 48.1% as of Wednesday, the New York Times reported. The primary saw a cryptocurrency-backed political action committee (PAC) spending more than $2 million on media in an attempt to re-elect Thanedar, who has voted in favor of many bills favoring the industry while in Congress. 

Election results for Democratic primary in Michigan’s 13th congressional district. Source: The New York Times

McKinney, considered by many to be a progressive challenger to two-term Thanedar, has already received support from the Democratic National Committee and the Democratic Socialists of America on his primary victory. During the campaign, he accused the crypto industry of “paying my opponent back for helping Trump make over $1 billion since taking office,” likely referring to Thanedar’s voting record.

Protect Progress, the super PAC responsible for funding the ads supporting Thanedar and opposing McKinney, is affiliated with Fairshake, a group backed primarily by crypto companies Coinbase and Ripple. After spending more than $170 million in the 2024 US election cycle on similar races involving pro- and anti-crypto candidates, Fairshake and its affiliates have poured additional millions of dollars into media for politicians in this year’s primaries in several US states ahead of the November general election.

Related: Nigel Farage to resign from UK Parliament amid crypto “gift” scandal, will stand in by-election

In addition to voting for bills like the GENIUS Act and CLARITY Act in the House of Representatives, Thanedar also reportedly lost more than $600,000 in the second quarter of 2026 after investing $3.7 million of campaign funds into crypto companies.

”Washington has spent too long serving billionaires and corporate interests,” said McKinney in a Wednesday X post. ”I will always only serve the people I represent.”

McKinney will face off against Republican candidate Taras Nykoriak in the November election. Cointelegraph sought a comment from McKinney’s campaign on Wednesday but did not receive an immediate response.

PAC-supported candidate wins Washington primary

In addition to Protect Progress’ efforts in Michigan, the Fairshake affiliate Defend American Jobs spent more than $65,000 on media to support Republican Amanda McKinney (no relation to the Michigan candidate) in Washington’s 4th congressional district. McKinney will face off against Democrat John Duresky in November, with both candidates securing more than 30% of the vote in Tuesday’s primary to advance to the general election.

Magazine: Here’s why the CLARITY Act’s ethics deal may be so hard to reach

Binance Sues RedotPay, Ethereum Staking plan Sparks Backlash

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Binance Sues RedotPay, Ethereum Staking plan Sparks Backlash

Today in crypto, Binance-affiliated companies sued RedotPay founders over alleged losses of nearly $473 million, as Ethereum’s latest improvement proposal has sparked a fierce debate over the network’s long-term economics. Plus, investigators uncovered more attackers behind the $100 million Coldcard wallet exploit.

Binance sues RedotPay over alleged $473 million user losses: Report

Binance-affiliated companies have sued the founders of Hong Kong-based cryptocurrency payments company RedotPay, alleging it diverted more than 470,000 users from Binance Card in breach of their commercial agreement.

The plaintiffs seek nearly $473 million in damages, alleging the conduct contributed to RedotPay’s valuation as the company considers a potential initial public offering, Bloomberg reported Wednesday, citing a Hong Kong court filing it obtained.

RedotPay said it is defending the proceedings and rejected what it described as “unfounded allegations” against the company and its co-founders. “RedotPay is strenuously defending the proceedings,” a RedotPay spokesperson told Cointelegraph, adding that it will respond through the appropriate legal process.

The legal dispute comes as crypto payments companies compete to expand stablecoin-based spending products, with RedotPay reporting rapid growth and a global user base of more than 8 million customers.

Ethereum researchers want to rein in staking; critics say it could backfire

A group of six Ethereum researchers and developers, including Ethereum Foundation’s Justin Drake, has proposed changing the network’s issuance policy to cut validator rewards more sharply as the proportion of staked ETH rises. 

The draft, called the Tapered Issuance Burn and currently being assigned the provisional number EIP-8363, would burn an increasing fraction of validators’ consensus rewards as the amount of staked ETH approaches a fixed threshold of 60.25 million ETH (around 50% of the current ETH supply), at which point the deduction hits 100%. The changes would phase in over 18 months. 

The proposal has triggered backlash from developers, stakers and DeFi founders, who warn that the reward cuts could force out solo validators before larger institutions are affected, weaken institutional demand for ETH, and disrupt DeFi markets built around staking yield. 

One of the proposal’s authors, Jérôme de Tychey, said the changes are needed to address the rising share of Ether being staked, which passed 33% in April. The authors argue continued staking growth could concentrate ETH in large custodians and liquid staking providers, while unchecked issuance erodes Ether’s role as a neutral, trustless store of value. 

Galaxy identifies at least 15 attackers behind Coldcard exploit

Galaxy Digital said it identified at least 15 attackers who exploited the Coldcard wallet vulnerability, with estimated losses now reaching $100 million and potentially climbing to $130 million across four attack waves.

Galaxy’s head of research, Alex Thorn, said new victim reports helped uncover previously unknown attackers, including one that allegedly siphoned 12 BTC from 126 addresses after a victim reported losing less than 1 BTC. Unlike centralized exchange hacks, the decentralized nature of the exploit made it more difficult to identify all of the actors involved.

The incident also reignited debate over hardware wallet security and AI’s growing role in vulnerability research. Dragonfly managing partner Haseeb Qureshi argued that “about $2 of AI hardening” could have prevented the exploit, citing reports that AI models were able to rediscover the underlying vulnerability within minutes after it became public. However, Tokenomist data lead Tatsapat Saerejittima cautioned that the claims lacked rigorous testing and should not be interpreted as evidence that AI could have found the flaw before disclosure.

Castle Labs co-founder Francesco also said AI is rapidly lowering the cost of discovering software bugs, adding that a firmware issue reducing Coldcard’s private key entropy likely made the vulnerability easier to exploit.

Announcing a Trillion Dollar Security grant for WEBCAT

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Announcing a Trillion Dollar Security grant for WEBCAT

The Ethereum Foundation’s Trillion Dollar Security (1TS) initiative is proud to announce a grant allocation to Freedom of the Press Foundation (FPF) to support the continued development of WEBCAT. WEBCAT is an open source tool that lets browsers verify that code served by an enrolled website matches what its developers published. The grant will also help bring that protection to Ethereum wallets and apps.

Closing the front-end verification gap

The grant targets a gap in how web applications are secured today. HTTPS authenticates the site you connect to and encrypts the connection, but it does not prove that the code the site serves matches what its developers published. Without an independent integrity check, a browser can run an altered front end without warning.

For Ethereum users, the risk lies in the app’s website itself. Your browser loads and executes the site’s code when you visit. Tampered code there can swap the recipient address or ask you to sign something other than what the page showed. Your wallet cannot determine from the connection alone whether the page has been altered.

Trillion Dollar Security has identified front-end hacks as an infrastructure risk and verifiable front ends as a next step. Compromised web interfaces can expose users to supply-chain attacks and UI manipulation, and can increase the impact of incidents like DNS hijacks.

About WEBCAT

WEBCAT, short for web-based code assurance and transparency, lets a browser verify that the resources served by an enrolled site match a signed manifest. If verification fails, the current alpha Firefox extension prevents the page from loading and displays a warning.

Developers sign a manifest describing the files and other assets covered by each release. A distributed, verifiable enrollment system maintains a public record. For each participating site, that record holds a cryptographic fingerprint of enrollment information that specifies the site’s authorized signing identities and validation rules. The extension periodically downloads and verifies a snapshot of the record, so it can verify enrolled sites locally without contacting a third party on every visit.

FPF developed WEBCAT in part because a future version of SecureDrop will need verifiable browser code. SecureDrop is FPF’s open source submission system for secure communication between journalists and anonymous sources.

Today, SecureDrop encrypts submissions on the newsroom’s server as they are uploaded. The server handles unencrypted content during upload but stores submissions in encrypted form. FPF is developing an end-to-end encryption protocol for a future version of SecureDrop. Under the intended design, the source’s browser would encrypt message content before sending it, so the server would store ciphertext rather than hold plaintext in memory until encrypted by the server. The protocol remains under development and does not yet cover file attachments.

Because the encryption code would still come from the server, a compromised server could send altered code that captures content before encryption. WEBCAT is intended to detect and block that kind of alteration. FPF has also tested WEBCAT with other browser-based secure applications through proof-of-concept integrations.

The same code-integrity risk applies when Ethereum users interact with browser-based app front ends, which is why a tool built to protect sources and journalists also fits wallets and apps.

What the grant funds

The grant funds the development of a WEBCAT verification library that wallets can integrate.

A wallet that includes the library can verify enrolled sites, so users get the protection without installing a separate extension. The grant also funds research into supporting Chrome and other Chromium browsers, help for teams adding WEBCAT to their apps, an independent security audit, and an Ethereum Request for Comments (ERC) standard ERC so wallet developers have a standard to follow.

The library will complement other 1TS work, including Clear Signing. Clear Signing helps users understand what they’re approving, while WEBCAT integration would help wallets verify that an enrolled app’s front end matches its signed manifest.

What’s next for wallet and app teams

Bringing this verification into wallets requires adoption on both sides. Wallet extensions must integrate the library, and app teams must enroll their domains and serve a signed manifest with each release. If you’re part of a wallet or app team interested in front-end integrity, we’d love to hear from you at trilliondollarsecurity@ethereum.org.

Read more about risk controls and priority work at trilliondollarsecurity.org.

Bybit Secures Austrian E-Money License for EU Payments

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Bybit Secures Austrian E-Money License for EU Payments

Bybit’s European payments subsidiary has secured an electronic money institution license in Austria, providing the exchange with a regulatory basis to add payment and e-money services to its regional platform. 

On Tuesday, Bybit said Bybit Payments GmbH received the license from Austria’s Financial Market Authority. The authorization provides a legal basis for future payment capabilities, which may include person-to-person payments, merchant payment solutions, open banking features and card products.

The payment services will be offered through Bybit.eu alongside services provided by Bybit EU GmbH, a separate Austrian entity authorized under the European Union’s Markets in Crypto-Assets Regulation since May 2025. Bybit.eu serves users across the European Economic Area (EEA), with Malta excluded. 

Bybit has not specified the reason why Malta was excluded, but said on its website that services are available only in jurisdictions where applicable MiCA passporting requirements have been met.

Bybit said the two entities will maintain distinct regulatory permissions and responsibilities. Bybit EU GmbH is authorized to provide crypto custody, exchange, placement and transfer services, while Bybit Payments GmbH will handle regulated electronic money and payment products as they are introduced.

The exchange said the new regulatory milestone could help strengthen its relationship with banks, payment providers and enterprises while reducing its reliance on third-party payment infrastructure. 

Related: Crypto exchange Bybit launches in Indonesia after NOBI acquisition

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Taiwan Plans Crypto Travel Rule Rollout in October

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Taiwan Plans Crypto Travel Rule Rollout in October

Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.

All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.

MiCA list expands with 12 companies in fourth post-deadline update

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MiCA list expands with 12 companies in fourth post-deadline update

ESMA’s latest MiCA update brings the number of authorized CASPs to 321 and adds three entities to its non-compliant register.

An AI credit bubble could set up bitcoin’s path to $1 million

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An AI credit bubble could set up bitcoin’s path to $1 million

Arthur Hayes thinks everyone has the AI trade filed under the wrong category.

In a new essay, the co-founder of crypto exchange BitMEX and crypto fund Maelstrom said the ongoing infrastructure buildout is a credit story like 2008, not an earnings story like the 2000 dot-com bust.

Hyperscalers, or computing frms borrow against their massive data centers, are stuffed with chips that depreciate fast, and lenders bankroll it believing they are financing technology when the underlying asset is closer to real estate.

The break comes when announced capex stops accelerating, which he pegs for late 2027 into 2028. Credit keeps flowing well past that point, the way mortgage lending did into 2007, until the weakest AI debt cracks and drags down whoever is over-levered on it.

Hayes expects Washington and Beijing to backstop the wreckage in the name of national security, printing more than they did in 2008, and that flood of liquidity is what bottoms bitcoin and drives it toward $1 million.

The nearer-term call is that the recent AI selloff, Korea’s leveraged unwind included, is a dip inside a bull market.

Bitcoin traded near $64,200 on Wednesday, flat on the week and still stuck in the range it has held since May.

This chart says bitcoin’s biggest bragging right over S&P 500 and Nasdaq may be over

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This chart says bitcoin’s biggest bragging right over S&P 500 and Nasdaq may be over

For years, bitcoin BTC$64,196.50 trounced stocks and most other assets, and supporters pointed to that outperformance as proof it was the best store of value around. Now, one chart suggests that edge may be fading.

That chart is the S&P 500-to-bitcoin ratio. It measures how much bitcoin it takes to buy the index. Today it takes roughly 0.12 BTC, versus more than 300 BTC in 2012. The ratio moved largely lower in a steep downtrend since BTC’s inception in 2010, with the 200-week simple moving average, a barometer of long-term trend, acting like a ceiling holding a ball underwater. There were brief instances of stocks outperforming BTC, lifting the ratio, but never beyond that average.

Until now.

In recent weeks, the ratio hasn’t just topped the 200-week average, it’s established a firm foothold above it, clearly visible on the far right of the chart above. It’s not isolated to the S&P, either. The Nasdaq/BTC ratio is showing the same first-ever crossover above the 200-week average.

Bitwise Says Crypto Will Thrive Even Without CLARITY Act

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Bitwise Says Crypto Will Thrive Even Without CLARITY Act

A failure to pass the CLARITY Act this week will put the bill in a “walking dead” state, but won’t stop the crypto industry’s march forward, according to Bitwise chief investment officer Matt Hougan. 

In a blog post on Wednesday, Hougan said while many, including himself, have called it the “make or break” week for the CLARITY Act, the reality is that the crypto industry has made too much progress to “go back in the bottle.” 

“The reality is that Washington is always late to major technology shifts, and it has rarely mattered as much as people feared,” said Hougan. 

His comments come as the Senate faces an Aug. 5 deadline to advance the landmark crypto market structure bill before its summer recess, with many concerned that failure to pass this week could see the bill pushed into the next year as lawmakers focus on the midterm elections in November. 

Prospects for CLARITY this year fade

Market observers are increasingly pessimistic about the CLARITY Act’s passage this year. In July, Galaxy Research lowered its probability of the CLARITY Act passing in 2026 to 30%, while Polymarket currently shows a 23% chance of it being signed into law this year, down from 82% in February. 

On July 24, NYDIG global head of research Greg Cipolaro said the latest draft was more complete but still lacked sufficient bipartisan support.

“The central investor takeaway is that Republicans have produced a substantially more complete bill, but not yet one with a credible path to 60 votes,” Cipolaro said.

According to sources speaking to Punchbowl News, without signs of progress from the White House on a bipartisan ethics deal, and movement on illicit finance and stablecoin yield, Senate Democrats will deny cloture for the crypto bill. 

Polymarket odds for the CLARITY Act passing in 2026 are at 23%. Source: Polymarket

Hougan said failure to pass the bill will put it in a “walking dead” state, stalled, but not permanently defeated. He said there is some hope that the bill could pass in September, or even in December, when Congress returns for a lame duck session.

“Congress often bundles multiple bills into a year-end “omnibus” package, forcing legislators to vote on a single bill that includes things they like and things they hate. Maybe the Clarity Act can pass that way.”

“Crypto will be fine,” Bitwise’s Hougan says

If the CLARITY Act fails to pass this year, Hougan said that the industry will fall back to the SEC-CFTC’s joint interpretation issued in March, which classifies Bitcoin and other assets as digital commodities and replaces the SEC’s 2019 staff guidance. 

SEC Chair Paul Atkins reinforced this last week, saying his agency is “ready, willing, and able to come out with rules that address the same issues as CLARITY and other aspects of the crypto market.” 

Related: CLARITY Act failure could send crypto valuations lower: Bernstein

However, the rules issued by the two regulators aren’t as durable as legislation, and could be challenged in court or reversed by a future administration. Atkins even acknowledged this in March when the two agencies released the interpretation. 

Source: Cynthia Lummis

“Only Congress can ensure that regulation in this area is future-proofed through comprehensive market structure legislation,” Atkins said.

WisdomTree chief legal officer Ryan Louvar has argued that the absence of legislation would continue to impede the market, despite the regulators’ efforts.

“A market cannot function well when its participants cannot tell in advance which agency’s rules apply to them,” Louvar said at a July congressional hearing.

Hougan said “crypto will be fine” despite this, as it would still give the industry two and a half years to accelerate before a new administration could potentially install a new SEC.

“Washington is dysfunctional. It seems crazy to me that we can’t get our act together to pass legislation that would improve investor protections and spark new innovation,” said Hougan.

“But it’s not a referendum on crypto’s validity as a pillar of the global financial infrastructure. That ship has long since sailed. At this point, crypto has enough momentum that it will reshape finance for decades, regardless of what happens in the next few days.” 

Magazine: CLARITY hopes fade, BitMEX shuts as lawsuit looms: Hodler’s Digest, July 26 

Bitcoin is 49% below its record while the S&P 500 hits all-time highs

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Bitcoin is 49% below its record while the S&P 500 hits all-time highs

SK Hynix rose 6.4% after the Seoul open and Nvidia added over 2% after hours, though AMD dropped 9% on a soft sales outlook and SpaceX fell 7.5% on higher projected AI spending.

Brent crude fell 1.1% to about $78.50 a barrel after Axios reported Washington, Tehran and Oman were close to an agreement to reopen the Strait of Hormuz, with an announcement targeted for Wednesday. Treasuries and gold both advanced as traders trimmed bets on further rate hikes.

Equities are printing records while bitcoin sits roughly 49% below the $126,000 it reached last October, and the second-largest asset is falling on the week.

Cheaper oil, easing rate expectations and a risk-on equity bid have now failed to move crypto for three straight sessions, which points the drag inward rather than at the macro.

Watch what happens if the Hormuz announcement lands Wednesday as reported. That is the cleanest macro catalyst crypto will get this week, and a market that cannot rally on a confirmed deal after failing to rally on the prospect of one is telling you the buyers are elsewhere.

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