分类： Bitcoin

The crypto markets staged a convincing comeback on Nov. 27, snapping a prolonged period of stagnation as a critical shift in the United States’ liquidity forced capital back into risk assets.

While the headline price action saw Bitcoin surge 5% to reclaim the psychologically vital $90,000 threshold and Ethereum clear $3,000 for the first time in a week, the true story lies in the fact that the rally provides much-needed relief to a market that had been grinding lower for a month

Indeed, the extent of the recent capitulation is evident in trailing returns. Data from Santiment shows that, leading into this week, losses among average wallet investments in the major digital assets were deeply underwater.

According to the firm, Cardano’s investors had shed an average of 19.2% of their value, Chainlink traders were down 13.0%, and even the market leaders were underwater, with ETH and Bitcoin nursing losses of 6.3% and 6.1%, respectively. XRP fared slightly better but was still down 4.7%.

So, the current 3.7% lift in total crypto market capitalization appears less driven by sector-specific news and more by a structural reopening of the fiscal spigot, combined with a sudden thawing in risk appetite among institutional allocators.

Why the crypto market rallied

To understand the mechanics of this rally, one must look past the order books and at the US Treasury’s balance sheet.

In an X post, asset management firm Ark Invest explained that the primary catalyst for the reversal was the normalization of liquidity following the resumption of US government operations.

The six-week government shutdown, which concluded recently, acted as a massive drain on the financial system, effectively siphoning approximately $621 billion in liquidity. This contraction left markets parched, hitting a multi-year low in liquidity on Oct. 30.

However, the reopening of federal operations has begun to reverse this dynamic. While roughly $70 billion has trickled back into the system so far, the “tank” is still overly full; the Treasury General Account (TGA) currently holds elevated balances near $892 billion.

Against a historical baseline of $600 billion, this deviation suggests a massive cash deployment is imminent.

So, as the Treasury normalizes this account over the coming weeks, that excess capital is mathematically mandated to flow back into the banking sector and the broader economy.

For macro-aware crypto traders, this represents a predictable wave of liquidity that historically buoys risk assets first.

Meanwhile, the fiscal tailwind arrives alongside a pivot in monetary messaging.

Ark noted that the “higher for longer” narrative that capped upside earlier in the quarter effectively dissolved this week as a chorus of Federal Reserve officials, including Governor Christopher Waller, New York Fed President John Williams, and San Francisco’s Mary Daly, telegraphed a willingness to cut rates.

This coordinated dovishness has repriced the probability of a near-term rate reduction to nearly 90%.

Considering this, the firm highlighted a critical calendar convergence: the TGA cash injection is set to align with the scheduled conclusion of Quantitative Tightening (QT) on December 1. The firm noted that the removal of the Fed’s balance sheet runoff removes a persistent dampener on liquidity, creating a setup where beta assets face fewer headwinds.

Institutional interest returns

Apart from the strong liquidity plumbing, institutional flows have painted a nuanced picture of where allocators are positioning for the year-end.

Spot ETFs saw a distinct rotation toward Ethereum. For the fourth consecutive session, ETH products attracted net inflows, totaling approximately $61 million, according to SoSo Value data.

Meanwhile, Bitcoin funds saw more modest inflows of around $21 million, while XRP investment vehicles added roughly $22 million. Conversely, Solana products faced headwinds, seeing $8 million in redemptions.

This flow profile suggests the current bounce is a “repair” operation rather than a speculative frenzy.

Timothy Misir of BRN told CryptoSlate that while buyers have re-engaged, volumes remain relatively thin. At the same time, he pointed out that open interest has not spiked significantly, despite perpetual futures funding rates having reset to positive territory.

This lack of froth is constructive, as it implies that weak hands have washed out and that accumulation is occurring without the dangerous leverage that often precedes a crash.

Risks ahead

For crypto traders, the immediate focus is whether this liquidity-fueled bounce can turn into a sustained trend, as significant risks loom ahead.

Misir pointed out that the “swing factor” remains the macro environment, as a hot inflation print could force the Fed to walk back its dovish signaling, instantly tightening conditions.

Furthermore, the upcoming holiday season often leads to thinning order books, where lower liquidity can exacerbate volatility. At the same time, a sudden spike in exchange deposits would signal that whales are using this liquidity event as exit liquidity rather than an entry point.

Considering this, Misir concluded that if Bitcoin can hold the $90,000 line, the top asset could eye the $95,000 zone as the next major test.

However, a failure here would likely see a retreat to the $84,000 pivot area.

Bitcoin’s hashrate is near record levels, yet miner revenue per unit of compute has fallen to record lows, pushing the network into a ‘high-security, low-profitability’ phase.

While the network’s hashrate has pinned itself above the one-zettahash watermark, which is a record for aggregate computing power, the revenue underpinning that security has disintegrated to historic lows.

Still, the system appears robust to the protocol. However, the mining sector is undergoing a slow-motion liquidation in the capital markets.

Bitcoin mining difficulty folds, hashrate holds

According to Cloverpool data, Bitcoin mining difficulty slipped approximately 2% at block height 925,344 on Nov. 27 to 149.30 trillion. This was the second consecutive decline this month, yet block intervals remain stubbornly close to the ten-minute target.

This falling difficulty coincides with a period where Bitcoin mining economics have become increasingly punishing.

Hashprice, the industry’s metric for daily revenue per unit of compute, has collapsed almomst 50% in recent weeks to an all-time low near $34.20 per petahash per second. At this valuation, the average operator’s gross margins have evaporated.

Nico Smid, the founder of Digital Mining Solution, explained that this means fleets running hardware with an efficiency below 30 joules per terahash now require all-in power costs below 5 cents per kilowatt-hour to break even, once rent, labor, and maintenance are factored in.

This threshold has forced a bifurcation, where thousands of older rigs are going dark, only to be immediately offset by industrial-scale deployment.

However, this does not explain why total hashrate has barely budged and why aggregate security work remains above one zettahash.

The answer lies in the fleet’s composition. Small miners without access to cheap power are capitulating. On the other hand, deep-pocketed operators with long-term power purchase agreements (PPAs), sovereign-linked facilities, or off-grid generation are holding steady or expanding.

For context, stablecoin issuer Tether has reportedly halted its mining venture in Uruguay, citing high energy costs and tariff uncertainty. So, if a firm of Tether’s stature is unable to lock in durable terms, smaller miners face even steeper odds.

Consolidation through distress

The two consecutive BTC difficulty drops are not a signal that the protocol is faltering. Instead, they are a signal that the network’s competitive set is changing.

When revenue compresses, distressed fleets migrate. Creditors seize inefficient sites, and brokers repackage used rigs for lower-cost regions. The most efficient miners sweep up stranded capacity.

So, the current headline hashrate resilience is, in practice, consolidation. The network appears stronger by the usual metric, while the number of entities capable of funding that strength shrinks.

This concentration carries tradeoffs. Exposure tightens to single points of failure, from extreme weather to grid curtailments and local permitting fights.

At the same time, financing also shifts toward a narrower group of balance sheets that can secure fixed-price energy, post collateral for interconnection, and carry inventory through long drawdowns.

As a result, the capital markets are rethinking the definition of a miner.

So, instead of pure-beta Bitcoin proxies, many investors now treat the sector as power-rich data center businesses with a volatile crypto overlay. This is evidenced by the fact that many miners are now embracing high-performance computing (HPC) clients to shore up earnings amid falling BTC revenue.

Bitcoin mining shifting map of power

Geopolitics is also redrawing the Bitcoin hashrate map. China’s estimated return to roughly 14% of global hashrate, despite the blanket 2021 ban, marks a structural turn.

Underground and gray-market operations have rebuilt a footprint that almost disappeared. Energy-rich provinces with surplus hydro or coal-adjacent industrial loads allow sites to operate intermittently and largely off the radar.

This “zombie capacity” keeps hashrate elevated, acting as a permanent tax on compliant Western miners.

However, the Western Bitcoin miners face a narrowing path.

Squeezed by higher financing costs, stricter disclosure requirements, and volatile interconnection timelines, operators can compete on cost only if they lock multiyear power contracts, migrate to more flexible grids, or share infrastructure with data center tenants.

Unsurprisingly, this has impacted their business, with public mining stocks erasing nearly $30 billion of market value in November.

These BTC miners saw their stock slide from a peak near $87 billion to about $55 billion before a partial rebound toward $65 billion.

What to Watch Next

Considering this, industry players are monitoring three specific dials to gauge the next phase of this restructuring.

The first is difficulty: deeper negative retargets would confirm rolling shutdowns among high-cost fleets. A sharp snapback would imply sidelined capacity is re-energizing as power contracts reprice or as fee spikes return.

The second is transaction fees. Inscription waves and persistent mempool congestion can lift miner revenue for weeks at a time, but the base case is a lean fee environment that keeps hashprice pinned near breakeven for many fleets.

The third is policy and supply chain. Any escalation in export controls, security reviews, or grid interconnection rules could shift the cost of capital overnight.

Miners have already begun adapting by broadening their business mix. Many are repositioning as data infrastructure firms, signing multiyear contracts for AI and high-performance computing to smooth cash flow that Bitcoin alone cannot guarantee.

That model can preserve marginal sites and retain upside exposure if the hash price recovers. Still, it also pulls scarce power toward steadier margins, leaving Bitcoin as the flexible sink that absorbs volatility.

For Bitcoin, the immediate risk is not a collapse in security. The zettahash era has delivered record aggregate work, and the protocol continues to calibrate on schedule.

The risk is structural: a system that looks healthier by aggregate metrics while relying on fewer actors to provide the work.

If capital remains tight and energy costs stay elevated, more asset sales, mergers, and migrations toward friendly jurisdictions are likely. However, if prices and fees rebound, some of today’s idled capacity will return, but often under new owners and new power terms.

That is the paradox of the zettahash age. At the protocol level, Bitcoin has never looked stronger. Beneath the surface, the mining business is facing significant distress.

Tether, the issuer of the USDT stablecoin, has spent the past year accumulating Bitcoin and gold at a pace that puts it on par with several sovereign treasuries.

For context, the firm purchased more gold than every central bank combined over the last quarter alone, pushing its total holdings to 116 tons of physical bullion.

Yet the build-up has not impressed traditional finance.

On Nov. 26, credit rating firm S&P Global downgraded its assessment of USDT’s ability to maintain its dollar peg to a 5, the lowest score in its stablecoin rating structure.

The agency pointed to rising allocations to Bitcoin, secured loans, and other higher-risk instruments, and said these exposures create uncertainty around reserve liquidity. In S&P’s view, these assets’ accumulation sits outside the simple, dollar-denominated model that a stablecoin reserve should reflect.

The result is an unusual split. Tether is buying assets that central banks have used for centuries to signal financial strength. S&P has concluded that the mix weakens the stablecoin’s reliability.

Why S&P took this position on Tether USDT

S&P’s downgrade rests on concerns about liquidity and reserve clarity rather than about asset quality. The agency’s model evaluates whether a stablecoin issuer can meet redemptions quickly and without friction during periods of market stress.

According to the firm, Tether’s increasing allocation to Bitcoin and secured loans introduces price volatility and counterparty exposure. The firm holds approximately $10 billion in BTC and has around $15 billion in secured loans, according to its latest quarterly attestation report.

At the same time, gold is also central to its reserves, with roughly $13 billion in assets. The precious metal, while a hard asset with long-term value, is harder to liquidate on short notice and cannot settle a large redemption as easily as a Treasury bill can.

Considering this, S&P’s view is that the reserve mix has become less suited to a product that promises instant one-for-one redemption.

The agency also highlighted gaps in disclosure. It noted:

“There is no public disclosure about the type of assets eligible for inclusion in USDT’s reserves or the action to be followed if the value of one of the underlying assets or asset classes were to drop significantly.”

Moreover, Tether does not publish detailed information on custodians, counterparties, or the composition of its money-market exposures.

These omissions matter because the quality of those institutions directly affects the reliability of reserves.

Even though Tether’s US Treasury holdings exceed $130 billion, making it one of the largest holders globally, the lack of transparency into its operational plumbing limits S&P’s confidence.

Notably, Tether has defended its approach in the past by presenting a different macro thesis.

Paolo Ardoino, the firm’s chief executive officer, has argued that Bitcoin, gold, and land are long-term hedges against global instability and the erosion of sovereign balance sheets.

The company has backed that view with investments in mining and royalty companies, a growing tokenized-gold business, and partnerships to offer vault services and collateralized lending tied to gold.

In a direct response to S&P’s downgrade, Ardoino said,

“We wear your loathing with pride… The traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system.”

From Tether’s standpoint, these moves strengthen the corporate balance sheet even if they deviate from the conventional stablecoin reserve model.

Why the crypto market does not care

Meanwhile, the market’s interpretation of Tether differs sharply from S&P’s framework.

This is because USDT has maintained its dollar peg across ten years of market cycles, including collapses in exchanges, lenders, and rival stablecoins. That track record shapes user trust more than a formal rating ever could.

Moreover, USDT’s liquidity on global trading venues is deep. The digital asset remains the base pair for much of crypto trading and is widely used for payments in emerging markets that lack stable access to the dollar.

As a result, the stablecoin’s demand continues to rise, and USDT’s market capitalization is at an all-time high of more than $184 billion.

Meanwhile, the most significant feature of Tether’s balance sheet is its earnings power. With more than $130 billion in short-term US bills, the stablecoin issuer earns about $15 billion a year.

That yield creates a rapidly growing equity cushion that can absorb price swings in Bitcoin or secured loans more effectively than standard risk models assume.

For traders and emerging-market users, these details matter more than S&P’s view of asset mix. The market sees a company with substantial US Treasury exposure, a rising gold reserve, a profitable business model, and a stable redemption mechanism.

So, even if part of the reserve is allocated to volatile assets, the scale of Tether’s retained earnings provides a buffer that would be unusual for a regulated bank.

Indeed, Ardoino underlined the extent of the firm’s innovation in an X post, saying that Tether has developed what he described as an overcapitalized business with no impaired reserves, and that it remains highly profitable.

He also added that Tether’s performance highlights weaknesses in traditional finance, which he said is increasingly unsettled by the company’s model.

He added:

“The traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system. No company should dare to decouple itself from it.”

Transparency still matters

Still, none of this removes the need for clearer disclosures.

The main vulnerability in Tether’s structure is not its gold allocation or its Bitcoin exposure. It is the lack of detailed insight into how the reserves are custodied, how counterparties are selected, and how secured loans are managed.

Even a balance sheet supported by significant equity buffers and hard assets is harder to evaluate without transparent reporting.

For institutional users and regulators, this is the central unresolved issue.

Thus, greater visibility would reduce uncertainty for large holders and align USDT with the standards expected of a global settlement asset.

Market chop aside, Wall Street is rolling out Bitcoin (BTC) exposure to advisors through structured notes and ETF-collateralized lending.

The bank simultaneously faces debanking blowback after Strike CEO Jack Mallers said his personal Chase accounts were shut. The juxtaposition spotlights institutionalization for clients versus risk-control for crypto-native principals.

On one side, JPMorgan moves BTC exposure into familiar wrappers, such as structured notes tied to spot-ETF performance, and lets select clients pledge Bitcoin-ETF shares as loan collateral.

On the other hand, Strike’s Jack Mallers says JPMorgan closed his personal accounts without explanation.

Together, they show the split-screen of crypto’s mainstreaming: products for wealth platforms, scrutiny for industry figures.

The asymmetry isn’t subtle. JPMorgan filed with the SEC for a leveraged structured note referencing BlackRock’s iShares Bitcoin Trust (IBIT), offering investors 1.5x IBIT’s gains if they hold to 2028.

The $1,000 note includes an early call: if IBIT trades at or above a preset level by December 2026, the bank pays out at least $160 per note, a minimum 16% return over roughly one year.

Miss that trigger and the note runs to maturity, delivering what JPM describes as “uncapped” upside as long as Bitcoin rallies. The downside buffer ends abruptly, as a roughly 40% drop from the initial IBIT level wipes out most of the principal, with losses beyond that threshold tracking the ETF’s decline.

This is not principal-protected. It’s classic structured-product math: limited cushion, leveraged gains, and the real possibility of large losses if Bitcoin sells off into 2028.

The product sits at the “filed with the SEC” stage, with no public disclosure yet on distribution channels or volume expectations. Structured notes of this design typically flow through broker-dealer and private-bank channels to advised or accredited clients, not walk-in retail.

JPMorgan tests a BTC-linked payoff within the same wrapper that high-net-worth clients already see for equities and indexes, but availability and sizing remain unknown.

The collateral play expands the playbook

Bloomberg reported that JPMorgan plans to let institutional clients use Bitcoin and Ethereum holdings as collateral for loans by year-end, using a third-party custodian and offering the program globally.

The move likely builds on an earlier step of accepting crypto-linked ETFs as loan collateral.

JPM has already been accepting crypto-linked ETFs as collateral and is now moving to accept spot Bitcoin ETFs, such as IBIT, for secured financing.

In parallel, it stands up a program for institutional clients to borrow against direct BTC and ETH positions held with an external custodian.

Public reporting does not list the full ETF roster or haircut schedule. Still, the examples given are mainstream US spot BTC ETFs, with the program described as global and initially aimed at institutional and wealth clients rather than the mass market.

Scale and distribution details remain sparse. The signals available point to “selected institutional and wealth clients” and “building on a pilot of ETF-backed loans” rather than broad availability across every advisor on the platform.

ETF-collateral lending would naturally sit in the private bank, wealth management, and trading client stack rather than in basic branch banking.

Public reporting gives no hard numbers on volumes or explicit advisor channels yet.

The closure that breaks the pattern

Jack Mallers wrote that “J.P. Morgan Chase threw me out of the bank” last month. His father has been a private client for more than 30 years.

Every time Mallers asked why, the staff told him, “We aren’t allowed to tell you.” He posted an image of what he says is the Chase letter. That letter cites “concerning activity” identified during routine monitoring, references the Bank Secrecy Act, and says the bank commits to “regulatory compliance and the safety and integrity of the financial system.”

It also warns that the bank may not open new accounts for him in the future. Mallers’ personal banking has moved to Strike.

There is no detailed on-the-record explanation from JPMorgan of the specific trigger for Mallers’ account closure.

Coverage notes that a spokesperson either declined to comment or stressed generally that the bank must comply with federal law, including the Bank Secrecy Act, when reviewing customer accounts.

JPMorgan declined to provide details on the rationale, citing Bank Secrecy Act obligations.

The timing is excellent. On Aug. 7, President Donald Trump signed the “Guaranteeing Fair Banking for All Americans” executive order, framed squarely at “politicized debanking.”

Legal analyses describe it as directing regulators to identify and penalize banks that deny or terminate services to customers based on their political or religious views or industry affiliations.

Following the order, the OCC issued guidance in September telling large banks not to “debank” customers over politics or religion and to limit unnecessary sharing of customer data in suspicious-activity reports.

However, the guidance concerns how banks weigh reputational risk and fair access; it does not relax their duty to monitor accounts and report suspicious activity under the Bank Secrecy Act.

The compliance track runs separately

On one track, a friendlier White House and Congress try to stop banks from blocklisting whole categories, such as crypto, on “reputational” grounds. On the other track, nothing in the executive order or OCC bulletins rewrites BSA/AML statutes.

When JPMorgan invokes “concerning activity” found during BSA surveillance, it leans on obligations that predate the Trump order and remain fully in force.

Regulators pushed banks to crack down on politically motivated account closures and to remove “reputational risk” from safety-and-soundness assessments. However, banks still file suspicious-activity reports and manage money-laundering risk.

The split shows how institutionalization proceeds on two planes. Product teams wire Bitcoin exposure into structures that wealth advisors already understand, such as notes with call features, loans backed by ETF shares.

Meanwhile, compliance teams keep running the same KYC and transaction-monitoring playbooks they ran before the election.

The executive order changes rhetoric, not the underlying BSA framework. Banks can no longer cite “crypto is too risky” as a blanket reason to exit relationships, but they retain full authority to close accounts when transaction patterns trip internal controls.

What’s at stake is whether banks treat crypto-industry principals differently from crypto-owning clients.
A wealth-management customer who buys IBIT through a managed account gets access to structured notes and collateralized lending.

A CEO who built a Bitcoin payments company gets a form letter citing “concerning activity” with no further explanation. The products roll out, and the principals get cut off.

JPMorgan tests whether it can serve one without accommodating the other, betting that Washington’s fair-banking push will not override BSA-driven closures and that clients will keep buying exposure even as the bank distances itself from the industry’s executives.

The bank decides the line between acceptable and unacceptable crypto participation, and so far, that line runs between holding the asset and building the infrastructure.

This is a speculative report translated for non-specialists. The narrator is an investigator who arrived long after humans were gone. Everything described as measured relies on real Bitcoin mechanics: block intervals, difficulty/target, timestamp rules, and data available from block headers and the coinbase transaction.

We arrived on a silent planet. The last clocks still ticking were embedded in a ledger whose authors were gone.

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REPORT START

Team: Survey Unit 3
Artifact: Global ledger (“Bitcoin”)
Technique: Lightweight chain analysis (headers + coinbase), mapped to solar time

Method

We analyzed the digital artifact known as Bitcoin using what we identified as block headers (timestamp, target / “bits”, version) and each block’s coinbase transaction (height, output value, and tag text).

From our previous initial review we’ve constructed the following data points:

• Fees were treated as: coinbase output − programmed subsidy (fees actually claimed by the miner).
• Timestamps were calibrated to the planet’s solar day and year and bounded by Bitcoin’s median-time-past (MTP) rule.
• Evidence of tip contention (stale blocks) was inferred from timing irregularities and MTP edge effects; where any stale-block archives survived on isolated nodes, they corroborated those periods.
• Difficulty retargets occurred every 2016 blocks with the actual_timespan clamped to 0.25×–4× of the two-week target, implying a per-epoch difficulty change bounded to at most 4× in either direction.

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Findings

Cessation of payments

We recorded ΔH (blocks before present) to be ≈ 86,000. Coinbase outputs were equal to the programmed subsidy, implying fees ≈ 0. Over that same interval, average block spacing settled near ~60–70 minutes with a long-segment mean of ~65 minutes.

Interpretation: Human-directed payments had ceased. Mechanical issuance continued.
Dating: 86,000 blocks × ~65 minutes ≈ ~10.6 years before our arrival.

Power-source timing signatures

Post-collapse block arrivals were not memoryless. Diurnal and seasonal cadence encoded the unattended power mix:

• Daytime clusters with nighttime gaps repeated across low-latitude longitudes → unattended solar with degrading storage.
• Irregular multi-hour bursts punctuated by multi-day voids at mid-latitudes → wind that faulted during storms and wasn’t reset.
• Persistent overnight presence at a few longitudes → small hydro or geothermal operating islanded.

We aligned repeated intraday timestamp clusters to local solar noon to estimate longitude bands of surviving sites. The strength of seasonal variation in block arrivals gave coarse latitude bands. Precise site coordinates were not recoverable.

Difficulty terraces (the fade, timed)

Immediately after the hashrate shock, average block time jumped from ~10 minutes to hours. Because difficulty only retargets every 2016 blocks and each epoch’s change is bounded, the chain formed terraces, plateaus of near-constant average interval separated by discrete down-steps.

Representative sequence observed in the global ledger:

• Terrace A: ~16–17 h/block for 2016 blocks → elapsed ~3.8 years.
• Terrace B: ~4.1 h/block for 2016 blocks → ~0.95 years.
• Terrace C: ~62–65 min/block for 2016 blocks → ~87–91 days.
• Terrace D: ~15–16 min/block for ~22 days, after which renewed hardware failures re-slowed the chain.

Where residual hashrate was ≈1% of pre-event, Terrace A alone spanned ~3.8 years at ~16.7 h/block. At ≈0.1%, the same 2016-block epoch would have stretched to ~38 years at ~167 h/block, still within the protocol’s adjustment bound. One region’s cadence matched the ~16–17 h/block case.

How to read a terrace (worked calc):

Epoch length = 2016 blocks. If the observed interval on a plateau is 16.7 hours, elapsed time for that epoch ≈ 2016 × 16.7 h ≈ 3.84 years.

Network decay captured in the record

Once accurate clocks vanished, miner timestamps drifted in coherent regional patterns. Bitcoin’s MTP rule limited abuse of timestamps (each new block had to be later than the median of the prior 11) but did not eliminate drift signatures.

Interval variance and clustered MTP-bounded timestamp advances revealed intermittent partitions and tip contention; when any link resumed (e.g., satellite, microwave), competing branches reconciled and only the winning branch remained canonical.

Without preserved stale-block archives, measured contention is a lower bound.

Maker marks that outlived their makers

Coinbase tag strings (pool labels) and stable nonce/version fingerprints persisted for years after fee activity ended. Defaults were never changed once operators were gone, leaving software/hardware families identifiable in the record. (Coinbase tags are visible via the coinbase transaction; headers alone do not carry them.)

Dating key events (worked examples)

• “Payments ended.” Window where coinbase output = subsidy began at ΔH ≈ 86,000. Using the observed ~65 min/block: ~10.6 years before present.
• First post-shock retarget completed. The initial 2016-block reduction finished ~3.8 years after the hashrate collapse (plateau at ~16.7 h/block).
• Final detectable hydro cadence. The last night-heavy, near-constant signature ceased ~1.9 years before present; the prior seven spring seasons showed increasing multi-day outages consistent with intake clogging and flood damage.

All conversions use observed segment averages, not the nominal 10-minute target.

Duration estimate (how long machines ran)

• Minimum confirmed: >10 years after economic activity ceased (from fee collapse to last hydro-like cadence).
• Plausible upper bound (regional): Multi-decadal operation at extremely low hashrate, where a single 2016-block epoch spans decades due to the adjustment bound.

The only requirements were: (a) at least one surviving power source and (b) an intermittent path for some blocks to reach the global network.

Summary report

Ultimately, the ledger shows when payments stopped, how energy tapered, how networks frayed, and how long unattended machines kept writing time, enough to reconstruct the end of activity from headers and coinbase alone.

END OF REPORT

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What readers should take from this

• Bitcoin behaves like an instrument. Difficulty rules and timestamp constraints transduce physical reality, power availability, operator absence, and network partitions into a durable time series.
• Physical failure, not price, ended the write. Dust, clogged screens, tripped breakers, drifting clocks, broken links.
• These forensics apply today. Block spacing, fee pressure (via coinbase delta), timestamp drift, and retarget dynamics are actionable diagnostics for present-day outages and partitions.

Limits

• Longitude bands were estimable; precise sites were not. Latitude was inferred only coarsely from seasonality strength.
• Fully isolated “shadow mining” may have produced blocks that never reached the global ledger.
• Without preserved stale-block archives, contention estimates are lower bounds; some races leave no canonical trace.
• Once synchronized time sources failed, MTP primarily preserved relative ordering, not accurate civil time; long-range calendar dates carry additional uncertainty even when intraday/seasonal structure is clear.
• In very low-hashrate regimes dominated by a single surviving operator, timestamps could be marched within MTP limits, partially masking diurnal signatures; cross-checks with nonce patterns and coinbase tags mitigate but do not eliminate this.
• Most OP_RETURN payloads were not decodable at scale and were not interpreted.

Bitcoin’s recent slide below $80,000 has triggered a wave of sleep disruption across the retail trading community, according to a new report from CEX.io.

The flagship digital asset has since rebounded to about $88,000, but the roughly 31% drawdown from its recent peak left many investors monitoring prices through the night.

This behavior has moved beyond simple anxiety, as nearly 70% of surveyed traders attribute execution errors and “bad trades” directly to sleep deprivation, creating a scenario where physical fatigue is compounding portfolio losses.

Late-night monitoring

CEX.io’s survey points to a striking shift in behavior: 68% of respondents say they check prices after going to bed almost every night or every night, while only 8% say they never do.

This pattern highlights how market swings increasingly influence daily routines and nighttime habits.

Moreover, the data suggests that sleep loss is becoming normalized in crypto trading.

According to the report, more than half of the surveyed participants said they have stayed awake until at least 2 A.M. because of market moves, and another 33% said they remain awake until 4 A.M. or later. In total, 81% reported losing sleep while waiting for a favorable setup or a key event.

Meanwhile, the psychological drivers of this behavior indicate a market increasingly driven by emotion rather than technical analysis.

The primary culprit for sleeplessness is not fear of liquidation, but the Fear of Missing Out (FOMO), cited by 59% of respondents.

This aligns with findings that sleep quality is inextricably linked to market direction: 64% sleep better in bull markets, compared to just 10% in bear markets.

BTC’s Nighttime volatility

CEX.io argued that this insomnia is not merely a reaction to price, but to a shift in the timing of volatility.

The firm, citing Blockworks Research data, noted that the most violent price swings have shifted to the overnight window.

The data shows the highest realized volatility clustering between 18:00 and 06:00 UTC. This timeline coincides with a thinning of institutional order books as US liquidity providers go offline.

So, with reduced market depth during the Asian-Pacific crossover, relatively smaller order flows are triggering outsized moves.

For retail traders in EMEA time zones, this volatility window overlaps directly with rest periods, forcing a binary choice between sleep and active risk management.

Texas has taken the first formal step toward becoming the first US state to hold Bitcoin as a strategic reserve asset.

On Nov. 25, Lee Bratcher, president of the Texas Blockchain Council, reported that the world’s eighth-largest economy, valued at $2.7 trillion, purchased $5 million worth of BlackRock’s spot Bitcoin ETF, IBIT.

He added that a second $5 million allocation is already lined up for direct Bitcoin acquisition once the state finalizes a custody and liquidity framework required under a new reserve law.

The two tranches create a bridge between today’s institutional rails and a future in which governments do not just buy Bitcoin but hold it.

Texas builds the first state-level blueprint

The initial exposure did not go directly on-chain. Instead, Texas entered via IBIT, which has become the default wrapper for large allocators seeking Bitcoin access within familiar regulatory and operational infrastructure.

This purchase was enabled by Senate Bill 21, a law signed by Governor Greg Abbott in June that established the Texas Strategic Bitcoin Reserve.

The framework allows the state Comptroller to accumulate Bitcoin so long as the asset maintains a 24-month average market capitalization above $500 billion. Bitcoin is the only cryptocurrency that meets the threshold.

The structure places the reserve outside the state treasury, sets governance channels for how the assets are held, and introduces an advisory committee to monitor risk and oversight.

Meanwhile, the first $5 million is small relative to the scale of state finances, but the mechanics matter more than the number.

Texas is testing whether Bitcoin can be formalized as a public reserve instrument within a state-level financial system that already manages hundreds of billions of dollars across different pools.

Once the operational processes are in place, the second tranche will involve self-custodied Bitcoin, which introduces very different implications for liquidity, transparency, and audit practices.

The state is designing procedures that resemble sovereign-grade custody rather than institutional brokerage. The reserve will require a qualified custodian, cold-storage capacity, key management protocols, independent audits, and reporting schedules.

These are the building blocks of a repeatable template that other states could adopt without reinventing the governance architecture.

Why BlackRock’s IBIT comes first

The decision to enter through IBIT was not a signal of preference for ETFs over native Bitcoin. It was an operational workaround.

IBIT is only in its second year, yet it has emerged as the most widely held Bitcoin ETF among major institutions. The fund is the largest Bitcoin ETF product, with cumulative net inflows of more than $62 billion.

Moreover, the apparatus for public-sector self-custody does not exist in most jurisdictions, and creating that infrastructure requires procurement, security modeling, and political signoff. So, the state used IBIT as a placeholder, a temporary facility that allows it to express exposure while finalizing the permanent structure.

This detour is instructive because it mirrors the trajectory of other large allocators.

Harvard University disclosed that IBIT became one of its largest US equity holdings in the third quarter. Abu Dhabi Investment Council tripled its IBIT exposure over the same period, reaching roughly eight million shares. Wisconsin’s pension system disclosed more than $160 million across spot Bitcoin ETFs earlier this year, also routed through IBIT.

The pattern is clear. Large institutions with different mandates, geographies, and risk frameworks are gravitating toward the same instrument. IBIT offers custody through a known intermediary, simplified reporting lines, and a clean accounting presentation under the new fair-value rules that took effect in 2025.

These conveniences have turned the ETF into a de facto entry point for public and quasi-public entities. Texas is unique only in the fact that its IBIT exposure is meant to be temporary.

What happens if others follow?

The broader question is whether Texas becomes an anomaly or a blueprint.

Bitcoin analyst Shanaka Anslem Perera said:

“The cascade is mathematical. Four to eight states are positioned to follow within eighteen months, collectively commanding over $1.2 trillion in reserves. Institutional inflows projected between $300 million to $1.5 billion in near-term mimicry. This is not speculation. This is game theory in motion.”

Already, politically aligned states like New Hampshire and Arizona also have Bitcoin reserve laws because they view the top crypto as a strategic hedge to the global financial system.

More states could follow, as they could use their structural surpluses to allocate to Bitcoin for diversification, especially under the new accounting standards that neutralize earlier mark-to-market penalties.

Moreover, the implications of state-level involvement extend beyond symbolism. ETF purchases do not alter the circulating supply because the trust structure issues and redeems shares without removing coins from liquid markets.

Self-custody does the opposite. Once coins are purchased for cold storage, they leave the tradable float, reducing the supply available to exchanges and market makers.

This distinction matters if Texas scales the reserve beyond its initial $10 million. Even modest state-level demand introduces a new type of buy-side participant, one that behaves countercyclically to noise traders and does not churn positions.

The effect resembles a stabilizing anchor rather than a source of volatility. If other states adopt similar policies, the Bitcoin supply curve becomes more inelastic, increasing price sensitivity.

Bank of America forecasts US real GDP growth of 2.4% in 2026, propelled by five different tailwinds. Meanwhile, JPMorgan stressed various headwinds for the macroeconomic landscape next year.

The OBBBA fiscal package adding roughly half a point through consumer spending and capex, lagged Fed cuts boosting activity in the second half, more growth-friendly trade policy, sustained AI investment, and base effects lifting measured output are listed in BofA’s forecast.

Additionally, headline PCE runs at 2.6%, core at 2.8%, unemployment drifts to 4.3%, a soft landing with mildly sticky inflation, and a Fed partway through its easing cycle.

For equity bulls, that reads like permission to stay long. For Bitcoin holders, the question is whether 2.4% growth arrives with the falling real yields and expanding liquidity that historically fuel BTC rallies, or whether tariffs and deficit pressures keep the real-yield environment too restrictive for a non-yielding asset to shine.

JPMorgan sketches the risk map that could turn BofA’s base case into a bumpier ride.

The S&P 500 gained roughly 14% in 2025 on AI enthusiasm, but 2026 brings stress points. Supreme Court review of President Donald Trump-era tariffs that generate nearly $350 billion in annual revenue ties directly into the projected 6.2% of GDP deficit.

US-China tensions and China’s leverage over critical minerals introduce a risk of stagflationary supply shocks. The 2026 midterms could flip the House, raising the odds of gridlock.

Early labor-market strain and cost-of-living pressure could sap consumption even with a positive GDP.

BofA and JPMorgan describe the same canvas, modest growth, above-target inflation, partial Fed easing, but BofA leans into tailwinds while JPMorgan warns the setup is fragile.

Why real yields determine Bitcoin’s path

The key variable for Bitcoin isn’t whether GDP prints 2.0% or 2.4%, but where inflation-adjusted yields sit.

S&P Global research finds Bitcoin has developed a clear negative correlation with real yields since 2017, outperforming when policy eases and liquidity expands.

A 21Shares analysis argues that in the post-ETF era, BTC trades as a macro asset whose pricing reflects ETF flows and liquidity rather than just on-chain fundamentals.

Binance’s macro explainer frames it plainly: Bitcoin “thrives when liquidity is abundant and real yields are low or negative,” because that’s when investors pay up for long-duration, zero-yield assets.

Current real-yield levels complicate the bullish case. Two- and 10-year TIPS yields in 2025 sit near the top of their 15-year ranges. When real yields spike, cash and Treasuries offer attractive positive real returns.

Crypto analysts frame falling real yields as the precondition for a renewed BTC leg higher: when real yields decline, capital rotates into growth and high-beta exposures.

Forecasts show policy rates settling in the mid-3% range by end-2026, implying mildly positive real rates if inflation behaves as BofA projects. That’s looser than the 2022-23 hiking peak but not 2020-style negative territory.

The question is whether that mild easing pulls real yields down from current levels, or whether tariffs and deficit pressures keep them sticky.

ETF flows as the transmission mechanism

BlackRock’s IBIT and its peers have become the primary conduit for US Bitcoin demand.
Single-day movements can be both inflows and outflows of over $1 billion.

When real yields fall, and the dollar softens, flows swing back into risk, and the ETFs amplify that move. When yields spike on tariff or deficit fears, flows can reverse just as violently.

Just as ETF flows can create a cushion against retail selling pressure, the funds’ structure can make Bitcoin more sensitive to macro shifts. Traditional portfolios can now express a view on real yields through BTC exposure as easily as they rotate into tech or commodities.

Additionally, Bitcoin’s correlation with risk-on sentiment has tightened. In 2022, Bitcoin followed global liquidity down as central banks tightened. Between 2023 and 2025, it followed liquidity back up.

If 2026 brings the clean easing BofA envisions, ETF flows support a rally. If JPMorgan’s risks materialize and real yields stay elevated, those same channels amplify the downside.

Mapping JPMorgan’s risks back onto the real-yield curve

JPMorgan’s tariff, China, and political risks aren’t abstract. They are transmission channels that could keep real yields higher than 2.4% growth alone would suggest.

UBS analysis warns tariffs are likely to keep inflation elevated into the first half of 2026, with core PCE peaking around 3.2% and staying above 2% into 2027.

If nominal yields remain sticky while inflation drifts slowly lower, the TIPS curve stays at the high end of its recent range.

That’s precisely the environment analysts identify as hostile for Bitcoin: real yields high enough that cash and short-duration bonds offer attractive returns, competing directly with a non-yielding asset.

Tariff uncertainty adds another layer. If the Supreme Court upholds current structures, revenue supports deficit financing but keeps import inflation alive. If tariffs are rolled back, the deficit widens, potentially forcing the Treasury curve higher on supply concerns.

Either outcome complicates the Fed’s easing path and could leave real yields elevated longer than equity markets price.

China’s control over critical minerals introduces supply-shock risk that skews stagflationary: weaker growth, higher inflation, tighter conditions.

That combination historically crushes risk assets, including Bitcoin.

The 2026 midterms add political volatility. Together, these risks describe a world where 2.4% growth on paper coexists with higher-for-longer real yields, a setup in which Bitcoin competes with Treasuries rather than front-running them.

The conditional answer

If BofA’s world materializes cleanly, with 2.4% growth, OBBBA-boosted spending, AI capex, inflation easing toward but staying slightly above target, and a Fed that keeps cutting into 2026, the odds favor Bitcoin benefiting rather than fading.

That combination usually means softer real yields and looser financial conditions. Bitcoin has tended to rally in those environments, especially now that ETF rails allow traditional portfolios to quickly express that macro view.

Falling real yields pull capital out of fixed income and into long-duration, high-beta assets. ETF flows amplify the move. BTC front-runs the easing rather than lagging it.

If JPMorgan’s world dominates, with tariffs keeping inflation sticky, Supreme Court uncertainty disrupts revenue assumptions, US-China tensions shock supply chains, midterm politics spook risk sentiment, then 2.4% growth on paper can still coexist with higher-for-longer real yields.

The opportunity cost of holding BTC against 4% to 5% nominal yields and positive real TIPS stays high, and ETF flows would remain choppy or negative. Bitcoin would fade amid macro strength, as that strength comes with inflation and yield pressures that make competing assets more attractive.
The 2.4% US growth figure by itself is neither bullish nor bearish for Bitcoin.

The real story is whether that growth comes with falling real yields and expanding liquidity, in which case BTC is a prime beneficiary, or with tariff-driven, deficit-fueled inflation and sticky real yields, in which case Bitcoin ends up competing with Treasuries for capital instead of capturing flows from them.

BofA gave the tailwinds, JPMorgan gave the ways those tailwinds could stall. For Bitcoin, the difference between those two worlds isn’t measured in GDP points. It’s measured in basis points on the TIPS curve and billions of dollars of ETF flow reversals. That’s the hinge.

The Dec. 4 meeting of the SEC’s Investor Advisory Committee opens with a question the agency has spent years avoiding: “What does it actually look like when publicly traded equities live on a blockchain?”

Not as wrapped derivatives on offshore exchanges, not as speculative tokens detached from shareholder rights, but as registered securities trading inside the same regulatory framework that governs Apple shares today.

The two-hour panel, titled “Tokenization of Equities: How Issuance, Trading, and Settlement Would Work with Existing Regulation,” assembles market-structure architects from Nasdaq, BlackRock, Coinbase, Citadel Securities, Robinhood, and Galaxy Digital to sketch that path in public for the first time.

The timing reflects pressure the SEC can no longer deflect. Nasdaq recently filed a formal proposal to trade tokenized versions of listed stocks alongside traditional shares on the same order book, arguing that blockchain settlement requires no carve-outs from the national market system.

Commissioner Hester Peirce made clear in July that tokenization “does not have magical abilities to transform the nature of the underlying asset.” Additionally, tokenized securities remain securities and are subject to the full federal regime.

What Dec. 4 tests is whether that framing can survive contact with implementation details: Who holds the keys? How does the NBBO work when trades settle in seconds instead of two days? Can you short a token the same way you short a share?

The compliant stack: same rules, different plumbing

Nasdaq’s blueprint offers the clearest view of what “inside the system” tokenization looks like. The exchange proposes allowing listed equities to trade in either traditional digital form or as tokens, with both versions sharing the same CUSIP, execution priority, and economic rights.

The token lives at the settlement layer. Issuers still register under the Securities Act, exchanges still operate under the Exchange Act, broker-dealers still route orders through consolidated feeds, and the Depository Trust Company (DTC) still guarantees delivery.

Blockchain replaces the back-end ledger, not the front-end rulebook.

That structure keeps tokenized equities inside Regulation NMS, which means trades still contribute to the national best bid and offer, market makers still face quote obligations, and surveillance still flags wash trades and spoofing.

Nasdaq warns that parallel venues outside NMS would fragment liquidity, undermine price discovery, and leave issuers blind to where their stock actually trades.

The filing explicitly rejects exemptions: tokenization is a settlement technology, not a new asset class that warrants lighter-touch oversight.

On settlement, Nasdaq points to DTC building blockchain infrastructure so token trades can clear on-chain while the exchange’s matching engine and data feeds remain unchanged.

If that plumbing arrives on schedule, live trading could start as early as the third quarter of next year.
The model assumes that transfer agents maintain tokenized registers the same way they maintain book-entry registers today, with the same custody standards and financial responsibility rules, just with a different database underlying them.

Where the fight actually sits: native issuance versus wrappers

The Dec. 4 agenda flags a distinction the crypto press often collapses: natively issued tokenized shares versus wrapper structures.

Native tokens mean the issuer itself places equity on-chain or directs its transfer agent to maintain a blockchain register, conveying full voting rights, dividend claims, and liquidation preferences.

Wrapper tokens, common on offshore platforms, offer only economic exposure: price goes up, investors profit, but they can’t vote the shares or sue in a derivative action.

Nasdaq’s filing uses European venues as a cautionary tale. Tokens tracking Apple and Amazon traded there at prices wildly divergent from the underlying stock, required no issuer consent, and granted holders neither voting rights nor liquidation rights.

When those tokens crashed, buyers discovered they owned synthetic derivatives, not shares.

The exchange argues that letting such products proliferate without registration would gut investor protections and create a shadow equity market that regulators can’t see.

The panel will probe how ownership rights flow through tokenized structures, not because the SEC is confused about what a share is, but because wrapping introduces intermediaries who may or may not pass through governance and economic rights.

If a token only tracks price, it can start to resemble a security-based swap, triggering different disclosure and margining rules.

The Securities Industry and Financial Markets Association (SIFMA) commentary explicitly stated that investors must retain the same legal and beneficial ownership in tokenized form, or the product morphs into something entirely different.

What probably works under current law (and what doesn’t)

The Dec. 4 agenda spans a spectrum of regulatory friction. At the low-friction end are issuers registering tokenized shares, listing them on national securities exchanges, and trading them interchangeably with traditional digital shares, as Nasdaq proposes.

Existing statutes already permit that if tokenization is treated as a settlement method rather than a product innovation.

Blockchain as record-keeping technology also fits, provided registered clearing agencies and transfer agents meet current custody and books-and-records standards.

Earlier SEC staff statements on digital asset custody frame this as compliance engineering, not boundary-pushing.

At the high-friction end, there is actual 24/7 trading of listed equities, which collides with Reg NMS assumptions about market hours and consolidated data.

Regulators float 24/7 markets in the crypto context, but applying that to tokenized Apple shares means rewriting how best execution works when New York sleeps and Tokyo trades.

Models where tokenized equities trade only on non-NMS blockchain venues, unregistered as exchanges or alternative trading systems, also clash with existing rules.

Nasdaq and SIFMA both argue that allowing equity volume to migrate to unconnected platforms would shred the National Best Bid and Offer (NBBO) and leave retail investors with stale quotes.

Senate work on the Responsible Financial Innovation Act points in the opposite direction, explicitly classifying tokenized stocks and bonds as securities and cementing SEC oversight.

That suggests any attempt to treat tokenized shares as outside the agency’s remit will hit legislative headwinds, not tailwinds.

What Dec. 4 decides and defers

The Investor Advisory Committee can submit findings and recommendations, but it does not write rules.

The panel is a stress test to see if Coinbase, Citadel, and Nasdaq can agree on what compliant tokenization looks like when they’re forced to reconcile custody models, interoperability standards, and short-selling mechanics in the same room.

If they can, the SEC gains a reference architecture for evaluating filings like Nasdaq’s. If they can’t, the agency learns where the technical or incentive mismatches sit before approving anything.

What the panel won’t do is approve Nasdaq’s proposal, rewrite the definition of a security, or bless offshore stock tokens that skip issuer consent.

It also won’t resolve whether 24/7 trading or cross-chain interoperability requires new exemptive relief, as those questions depend on engineering details the advisory body isn’t equipped to answer.

At most, Dec. 4 yields a menu of options the Commission can reference when deciding whether tokenized equities belong in the national market system or require a parallel structure that current law doesn’t yet contemplate.

The meeting matters because it forces the question into the open. The answer still depends on whether the market wants to retrofit blockchain into existing rails or build new ones, and the SEC has to authorize it from scratch.

A 284-page complaint filed Nov. 24 against Binance in North Dakota federal court represents 306 American families who lost relatives in the Oct. 7, 2023, Hamas attacks.

The lawsuit demands roughly $1 billion from Binance, former CEO Changpeng Zhao, and executive Guangying “Heina” Chen, with the amount automatically tripling to $3 billion if the plaintiffs win under the Anti-Terrorism Act.

The evidence trail combines on-chain analytics tying $1 billion in flows to Hamas, Palestinian Islamic Jihad, Hezbollah, and the Islamic Revolutionary Guard Corps with Binance’s 2023 guilty plea for willfully failing to report suspicious transactions involving those organizations.

What makes extra depth to the case is both the legal mechanism and the firepower behind it.
Willkie Farr & Gallagher leads the plaintiff team, where crypto lawyer and former CFTC chair Christopher Giancarlo practices. Lead attorney Lee Wolosky co-heads Willkie’s litigation department and served as Ambassador under multiple administrations.

As Consensys lawyer Bill Hughes noted, that profile signals a strategic bet that the Anti-Terrorism Act’s (ATA) treble-damages mechanism can reach centralized exchanges when compliance failures cross into knowing assistance, not speculative litigation fishing for settlement.

The complaint builds on the February Raanan v. Binance decision, in which a Manhattan federal judge refused to dismiss JASTA claims against Binance.

Raanan cracked the door for the lawsuit walk-through with transaction data, internal compliance messages, and a 70-page section on Binance’s relationship with Iran’s Nobitex exchange, which Elliptic calls “critical infrastructure” for IRGC sanctions evasion.

For centralized exchanges rebuilding banking relationships, the case asks: when does running a platform become indispensable infrastructure for sanctioned flows?

How ATA liability works and why Twitter won where Binance might lose

The Anti-Terrorism Act lets US nationals injured by international terrorism recover triple damages from anyone who aided the attackers.

In 2016, JASTA added explicit secondary liability: plaintiffs must show the defendant had “general awareness” of their role in terrorist activities and provided “knowing and substantial assistance.”

The Supreme Court’s 2023 Twitter v. Taamneh decision ruled that merely providing “ordinary” services that terrorists also use isn’t enough. Plaintiffs must prove “conscious and culpable participation.”

Social media platforms escaped liability after Taamneh because their services were generic, and moderation efforts cut against conscious complicity.

Crypto exchanges face different math. The new lawsuit points to FinCEN’s 2023 consent order documenting that Binance “failed to report to FinCEN transactions associated with terrorist groups including Al Qaeda, the Islamic State of Iraq and Syria, Hamas’ Al-Qassam Brigades, and Palestinian Islamic Jihad.”

The complaint layers in internal messages where compliance staff allegedly said clients are “here for crime” and “we see the bad, but we close two eyes.”

That’s the pivot: from “we’re just a platform” to “you knowingly built core infrastructure for sanctioned groups.”

The off-chain architecture that makes liability stick

The complaint targets Binance’s internal mechanics, alleging that Binance built its exchange to evade AML and KYC obligations, exempt VIP customers, encourage location obfuscation, and undermine monitoring that CZ allegedly directed.

Centralized exchanges pool client crypto in omnibus wallets and record balances on internal ledgers rather than on-chain.

Deposits pool into exchange-controlled wallets, trades net internally, and only final withdrawals touch the public blockchain. That architecture, plaintiffs argue, provided “financial plumbing” for foreign terrorist organizations to move funds without leaving public blockchain traces.

FinCEN’s 2023 consent order documents Binance’s duty to maintain an AML program and file suspicious-activity reports, then catalogs systematic failures.

The complaint alleges internal alerts and vendor reports tied specific accounts to Hamas, yet Binance avoided filing SARs, protected flagged customers, and promoted “international circumvention of KYC.”

Additionally, it alleges Binance processed roughly $7.8 billion in flows with Iran’s Nobitex exchange, which handles approximately 70% of Iranian crypto volume.

Because flows settle internally on Binance’s ledger, only Binance sees the full path: FTO-linked deposit through market makers to dollar off-ramps.

The complaint details one Hezbollah-linked account with nearly $17.8 million in deposits and withdrawals in under two years, including direct flows from an OFAC-designated financier.

The complaint’s core allegation: Binance knew Hamas and related actors used the platform. Internal alerts and vendor reports flagged accounts tied to designated terrorist organizations, yet Binance allegedly chose profit over counter-terrorism obligations.

The CFTC’s 2023 complaint preserves messages where compliance staff described clients as “here for crime” and “we see the bad, but we close two eyes.”

If plaintiffs demonstrate Binance’s architecture and VIP exemptions were purposefully designed to facilitate sanctioned flows, they satisfy Taamneh’s “conscious and culpable participation” standard.

Plaintiffs allege Defendants knowingly provided substantial assistance, transferring funds, maintaining wallets, enabling access to US dollar liquidity, such that the Oct. 7 attacks were a foreseeable result.

Wolosky framed the stakes:

“When a company chooses profit over even the most basic counter-terrorism obligations, it must be held accountable—and it will be.”

Where the tail risk actually lands

The immediate threat isn’t a $3 billion judgment, as discovery will take years, and Binance has jurisdictional defenses. The risk is that Raanan and the current Balva lawsuit create a template that other plaintiffs can replicate.

Even without a final ruling, litigation compounds regulatory and banking friction.

Considering 2023’s fallout, Binance.US suspended dollar deposits when banking partners cut fiat channels. BUSD collapsed from $12 billion in daily volume to under $1 billion by mid-2025.

Additionally, the European Securities and Markets Authority warned that Binance accounts for over half of global crypto trading volume, creating systemic risk if legal pressures force it to curtail operations.

Banks price legal risk into servicing decisions. Repeat ATA suits make offshore exchanges more expensive to serve, pushing stricter KYC and heavier reliance on blockchain analytics. This raises compliance costs that flow into wider spreads or fees.

Binance’s 2023 FinCEN settlement installed a five-year monitor with authority to demand real-time controls around Iran, Syria, Lebanon, and Gaza. Fragmenting liquidity in USDT, TRX, and BTC/ETH pairs becomes unavoidable.

Spot Bitcoin and Ethereum ETFs concentrate dollar access in regulated US broker-dealers, which face no AML monitor or ATA exposure.

For traders needing high-frequency access or altcoin depth, the choice sharpens: stay on offshore CEXs and absorb compliance drag, or migrate to DEXs that lack fiat on-ramps but also lack centralized chokepoints.

If the current complaint survives motions to dismiss, more ATA/JASTA suits against platforms with enforcement scars are likely to appear.

The legal mechanism for treble damages exists. The factual questions about the strength of the evidence and the extent of the assistance remain contested.

What’s been decided is that exchanges now operate in jurisdictions where terror-financing liability can triple claimed damages and where touching the dollar system via centralized infrastructure becomes costlier.

Willkie Farr’s involvement adds weight that other plaintiff firms can’t match. A firm housing crypto-friendly lawyers and a former CFTC chair lending litigation firepower to an ATA case sends a message: severe compliance failures override industry sympathy.

The families behind the complaint don’t need to win to reshape liquidity flows. They just need to survive long enough to make every exchange with similar compliance records wonder if they’re next.