Trump Orders Fed Crypto Master Account Review as Truth Social Pulls 3 ETFs, Bankr Loses $150K

Crypto News

President Donald Trump has directed the Federal Reserve to review its policies on granting fintech and crypto firms direct access to the central bank's payment rails. Signed Tuesday, the executive order titled "Integrating financial technology innovation into regulatory frameworks" instructs regulators to remove rules deemed "overly burdensome" to innovation. The Fed must submit a report within 120 days clarifying whether the 12 regional Reserve Banks can independently grant master accounts. The move escalates a long-running debate over whether non-bank crypto firms should connect directly to high-value U.S. dollar settlement rails, following the Kansas City Fed's earlier approval of a limited-purpose account for Kraken parent Payward.

Yorkville America Equities has withdrawn registration statements for three Truth Social-branded crypto ETFs filed with the Securities and Exchange Commission on May 19. The pulled filings covered the Truth Social Bitcoin ETF, the Truth Social Bitcoin & Ethereum ETF, and the Truth Social Crypto Blue Chip ETF, all submitted between June and July 2025. The sponsor invoked Rule 477(a) for the withdrawals and Rule 457(p) to credit paid filing fees toward future submissions. Yorkville said it would redirect product development to the Investment Company Act of 1940 framework, citing stronger investor protections and broader access to institutional distribution channels rather than abandoning the strategy entirely.

The U.S. Senate voted 50-47 on Tuesday to advance a war powers resolution that could force President Trump to seek congressional authorization to continue the conflict with Iran. Four Republicans joined Democrats in supporting the procedural measure, sponsored by Senator Tim Kaine of Virginia. The U.S.-Israeli war with Iran has stretched nearly three months, pressuring global markets through surging fuel and energy prices after the closure of the Strait of Hormuz. The bill still faces a full Senate vote, a Republican-led House, and a likely presidential veto. Crypto markets have traded sideways for four months as geopolitical risk and inflation weigh on risk-asset appetite.

AI Financial Corp., the World Liberty Financial token treasury vehicle chaired by WLFI chief executive Zach Witkoff, warned of substantial doubt over its ability to continue as a going concern. The firm, formerly known as ALT5 Sigma, reported a first-quarter net loss of $271.5 million, against a $2.4 million loss a year earlier. A working capital deficit of roughly $5.5 million, $39.1 million in liabilities and $32.2 million in assets underline the strain. AI Financial holds 7.3 billion WLFI tokens valued at $703.4 million, down from over $1 billion in December, producing an unrealized loss of $348.3 million against a $1.46 billion purchase cost.

AI-powered trading assistant Bankr has disabled swaps, transfers and token deployments after confirming an attacker accessed at least 14 user wallets, with reported losses reaching $150,000. The team said it would reimburse affected users in full while the investigation continues, and three identified attacker addresses collectively hold $440,000 in crypto. SlowMist founder Yu Xian attributed the incident to a social engineering exploit targeting the trust layer between automated agents, specifically an interaction between Grok and Bankrbot that enabled unauthorized transaction signing. The episode is the second prompt-injection-style compromise tied to Bankr this year and renews scrutiny over agentic DeFi security models.

The Commodity Futures Trading Commission, under sole Chair Michael Selig, sued Minnesota, Governor Tim Walz, Attorney General Keith Ellison and the state's public safety director after lawmakers passed Senate File 4760, the first outright state ban on prediction market platforms. Signed Monday and effective August 1, the law prohibits advertising, creating or operating event-contract venues such as Kalshi and Polymarket, treating their contracts on sports, military conflicts and weather as wagers. The CFTC argues exclusive jurisdiction under the Commodity Exchange Act and asked the court to permanently block enforcement, framing the contracts as federally regulated swaps protected from state criminalization. Several similar disputes are pending nationwide.

Taken together, the day's developments outline a market caught between aggressive U.S. policy intervention and persistent operational fragility across crypto rails. Washington is simultaneously opening the door to bank-grade infrastructure for digital asset firms while retreating from politically branded ETF vehicles and litigating states over prediction markets. Geopolitical risk in the Middle East continues to cap risk appetite, even as on-chain treasuries built around politically affiliated tokens unwind under mark-to-market losses. The Bankr incident underscores that agentic trading still lacks a hardened blockchain security layer, while regulatory consensus on altcoin and DEX-adjacent products remains the cycle's defining open question.