Five Crypto Firms Shutter as Newsom's AI Order Targets Layoffs, Ark Buys $5M Bullish

Crypto News

Everclear announced this week that its foundation and labs entity will wind down after the cross-chain solver protocol failed to convert healthy volume into sustainable revenue. Monthly throughput reached around $500 million, yet usage skewed heavily toward price-sensitive flows rather than recurring commercial activity. Over the past six months the team pivoted toward a business-to-business-to-consumer arrangement, signing partnership deals with several industry names, but onboarding timelines outran available runway. The team is now exploring open-sourcing the protocol and a possible token buyback in the $50,000-$200,000 range if liabilities settle favorably. The token plunged on the announcement, deepening losses across the broader Decentralized Finance (DeFi) sector.

California Governor Gavin Newsom signed what his office described as a first-in-the-nation executive order Thursday, directing state agencies to prepare workers and small businesses for artificial intelligence disruption. The order convenes universities, economists, labor specialists, and industry executives to draft policies covering severance rules, employment insurance, transition payments, and worker-owned company structures. The Employment Development Department will build a public dashboard tracking AI impact by sector, while the Labor and Workforce Development Agency must recommend updates to the state's WARN Act within 180 days. The action lands as Silicon Valley sheds roughly 114,000 jobs and as automation accelerates pressure on white-collar employment categories across the technology corridor.

Crypto trading card platform Fantasy.top confirmed it will shut down operations in June after two years, citing insufficient volume to sustain long-term operations. The team experimented with adjacent products including prediction markets but did not reach durable market fit. Co-founder Kipit acknowledged the project attempted to layer crypto economics onto a model that was never designed for tokenized incentives, attracting speculators chasing card price appreciation rather than players who enjoy trading card competitions. The closure adds to an accelerating list of consumer projects winding down amid the prevailing bear market, with the broader correction shrinking discretionary engagement across collectibles, gaming, and social finance niches.

The shutdown wave widened with crypto ATM operator Bitcoin Depot filing for Chapter 11 bankruptcy in the United States on Monday, citing financial strain and tightening regulatory pressure across state licensing regimes. Ethereum infrastructure firm Syndicate Labs separately announced it was winding down after five years, pointing to a shrinking rollup market that has consolidated activity around a small number of dominant layer-2 blockchain networks. At least five major crypto companies have folded in a single week, while the industry has now cut more than 5,000 jobs in 2026. Many publicly listed crypto firms reported widening first-quarter losses as compression hit trading fees and lending revenue.

ZERO Network framed its closure differently, describing the wind-down as a strategic refocus by parent wallet provider Zerion on its consumer wallet and data application programming interface offerings. Bridging into the ZERO layer-2 has been disabled, while withdrawal bridges out remain open until July 31 to give users a window to repatriate assets. The team said the underlying vision had not changed, only the delivery vehicle, and pledged to channel the talent and lessons from ZERO into a cross-chain wallet experience. The decision underscores how layer-2 economics have hardened against new entrants as fee compression and rollup commoditization erode the case for standalone chains.

While operators retrench, institutional flows tell a different story. Cathie Wood's Ark Invest snapped up an additional $5 million of Bullish shares Thursday, acquiring 139,117 shares across its Innovation, Next Generation Internet, and Blockchain and Fintech Innovation ETFs. The latest tranche follows roughly $4.4 million in Bullish purchases earlier in the week, despite the stock closing down 2.73% to $35.96 and trading 14.2% lower over the past month. Bullish reported a wider quarterly net loss of $604.9 million alongside higher adjusted revenue of $92.8 million, and recently announced a $4.2 billion acquisition of Equiniti aimed at accelerating tokenization infrastructure. The firm still holds roughly 24,300 Bitcoin (BTC) on its balance sheet.

This week's headlines crystallize a defining tension of the 2026 cycle. Operators across DeFi, infrastructure, gaming, and on-ramps are capitulating as drained liquidity exposes business models that survived on speculative throughput rather than recurring economics, even as policymakers like California's governor scramble to manage automation-driven labor shocks unfolding in parallel. Yet long-duration capital allocators continue accumulating exposure to the surviving infrastructure layer, including listed exchanges and altcoin-adjacent franchises, betting consolidation hardens the firms that emerge. The dominant narrative is no longer broad expansion but selective survival: weak hands fold while institutional balance sheets quietly compound positions, setting the stage for a sharply more concentrated industry.