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The CFTC is betting that borrowing Nasdaq’s “systemic risk” playbook can shield a two-year-old betting product from 50 state regulators, and New York’s $36B lawsuit is about to test whether that argument survives contact with a courtroom.
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In Today’s Email:
**What Matters:CFTC Asserts Authority to Protect Kalshi 👀Case Study:BlackRock Sees Bitcoin Sentiment Shift 🔎Governance & Features:**ENS Foundation Gains Endowment Control 🌐
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WHAT MATTERS
State of play: The CFTC invoked emergency authority to keep Kalshi operating nationwide, escalating a jurisdictional fight with New York over who gets to regulate prediction markets.
CFTC Chair Michael Selig ordered Kalshi to keep operating under federal rules after New York AG Letitia James sued the platform in July.
James alleges Kalshi ran an illegal gambling business and is seeking penalties that could total at least $36B.
The clash is part of a broader CFTC push, having already sued New York, Illinois, Arizona, and Connecticut over prediction market jurisdiction.
Why it matters: This is the clearest test yet of whether federal preemption can override state gambling law for prediction markets. If the CFTC’s authority holds, it sets precedent shielding Kalshi and Polymarket from a state-by-state legal assault.
Our take: Selig’s framing borrows Nasdaq’s systemic-risk logic to defend a two-year-old product category, a stretch that shows how thin the CFTC’s legal footing actually is.
**For builders and investors: **Federal preemption remains unresolved, so treat state-level legal risk as live, not theoretical, until courts or Congress settle it.
CASE STUDY
BlackRock’s Robert Mitchnick says bitcoin’s decoupling from equities signals a subtle sentiment shift, even as the asset remains down nearly 30% year-to-date and stuck in a $60,000 to $65,000 range.
Mitchnick said bitcoin’s July outperformance during an AI equity pullback supports its thesis as a portfolio diversifier and hedge.
US spot bitcoin ETFs logged their best inflow week since mid-April, pulling in about $853.5M over five sessions.
BlackRock’s IBIT fund captured over 80% of those inflows, drawing $693.7M as investors stayed in buy-and-hold mode.
Some analysts link the inflow streak to the Coldcard cold storage exploit, which may be pushing investors toward ETF custody.
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INSIGHTS
**State of play: **Robinhood Chain hit a record 11.6M daily transactions and 32% TVL growth last week, but the gains are coming from the same user cohort trading more, not new participants joining the chain.
Daily active accounts rose just 3.3% week-over-week and remain 11% below the July 16 peak despite record transaction volume.
USDe surged from $17M to $253M in a month, now making up 43% of the chain’s stablecoin float.
The shift toward yield-bearing USDe over native USDG suggests capital is parking on the chain rather than actively transacting.
FEATURES & GOVERNANCE UPDATE
ENS tokenholders voted to hand the ENS Foundation operational authority and administrative control of its $65M Endowment, formalizing a structure born out of June’s governance clash with ENS Labs.
The “Next Era of ENS DAO” proposal passed with about 70% support, creating a five-member board and full-time staff.
The DAO retains 54.6% of ENS token supply and protocol-level authority, sending a one-time 1M ENS grant to fund the foundation.
A nine-day timelock governs endowment transactions, with the Security Council retaining power to cancel them.
Other notable feature updates:
Jupiter𝕏launchesSmart Vaults on Solana.Solstice𝕏launchestranching for STRC yield.Solomon Labs𝕏launchesyield-bearing USDv.Maple𝕏completesfirst SYRUP token buyback.Resupply𝕏launchessyrupUSDC lending market.xStocks𝕏launchestokenized equities on Hyperliquid.FX100𝕏launchesliquidation-protected perps testnet.
QUICK BITES
Twenty One Capitaltakes$414M Q2 loss.ENS Foundationtakesadministrative control of $65M Endowment.Robinhood Chainhits11.6M daily transactions as USDe fuels TVL growth.CFTCflexesemergency authority to keep Kalshi operating amid NY lawsuit.eToroagreesto buy TradeZero for up to $231M as equities drive Q2 growth.New Bitcoin addressesjumpas Coldcard exploit pushes users to move funds.Trump Mediarecords$360.6M unrealized loss on digital assets in H1 of the year.
NOTEWORTHY READS & MEME
FTDA’s𝕏readon The Retirement Industry’s Dilemma.Lorenzo Valente’sreadon Where Does Crypto Value Accrue?Jeff Amico’s𝕏readon How most “RWA credit vaults” work today.
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