Federico Variola says AI has diverted capital from crypto and is empowering attackers, while rising cybersecurity costs could push the industry toward greater centralization. Phemex CEO Federico Variola says AI has been a ‘net negative’ for crypto, despite the crypto exchange announcing an AI-focused transformation earlier this year. Speaking on Cointelegraph’s Chain Reaction, Variola said AI has diverted capital away from the industry, while empowering attackers and driving up cybersecurity costs for smaller teams — pressures that risk pushing crypto toward greater centralization. “It’s difficult to be bullish about AI in crypto,” he said. “Liquidity have been significantly diverted to to that industry on one side. On the other hand, AI has empowered a lot of bad actors that have been exploiting protocols.” Read more
The former employees allegedly earned more than $50,000 each by trading Hyperliquid perpetuals ahead of Robinhood token listings. US prosecutors on Tuesday charged two former Robinhood engineers with commodities fraud and wire fraud for allegedly using confidential information about upcoming cryptocurrency listings to profit from perpetual futures trades on Hyperliquid. According to the US Department of Justice (DOJ), Hefu Chai and Huaisong “Jerry” Xiang bought perpetual contracts linked to tokens ahead of Robinhood Crypto listings. The DOJ alleged each profited more than $50,000 from the trades between 2025 and 2026. The DOJ said Chai and Xiang had access to a private company Slack channel containing information about planned listings. Prosecutors allege they used that information to open long positions on Hyperliquid, closing them when their value increased after their debut on Robinhood. Read more
The $450 million withdrawal came as Bitcoin fell 2.5% and the CLARITY Act failed to advance in the Senate, with Fidelity and BlackRock funds leading the outflows. Spot Bitcoin exchange-traded funds recorded their largest day of outflows since late June after a major crypto bill stalled in the Senate. The 13 US-listed funds saw a net $450.4 million outflow on Tuesday, after attracting $159.9 million on Monday, according to data from Farside. It marks the largest outflow since June 24, when Bitcoin ETFs lost $469 million as a tech stock sell-off pressured risk assets. Data shows Fidelity’s FBTC saw the biggest outflows, shedding $214.8 million, followed by $161.7 million from the BlackRock iShares Bitcoin Trust, $44.1 million from Grayscale’s Bitcoin Trust ETF (GBTC), $17.4 million from ARK 21Shares Bitcoin ETF (ARKB) and $12.4 million from Bitwise Bitcoin ETF (BITB). Read more
The CLARITY Act still has a procedural path after Senator Thom Tillis moved to reconsider the failed cloture vote, though industry executives are divided over whether Congress has enough time left. Crypto industry leaders are looking to US financial regulators to fill the regulatory gap after a major crypto bill establishing a regulatory framework for digital assets stalled in the Senate on Tuesday. The Senate voted 49-50 on a motion to invoke cloture and advance the CLARITY Act, short of the 60 votes needed as Democrats raised concerns over US President Donald Trump’s crypto investments. Industry executives said the result was a disappointment, but pointed to potential rulemaking from the US Securities and Exchange Commission and Commodity Futures Trading Commission as the next best source of regulatory clarity. Read more