News

TLDR:

The SEC reduced the stablecoin capital haircut from 100% to 2%, in line with money market fund treatment. 

Broker-dealers previously needed $2 million in capital reserves just to hold $1 million in stablecoins. 

The rule change allows regulated firms to use stablecoins for settlement, collateral, and tokenized assets. 

Lower capital requirements are expected to drive broader institutional demand and stablecoin adoption in 2026.

Stablecoins have cleared a major regulatory hurdle in 2026. The U.S. Securities and Exchange Commission revised capital treatment rules for broker-dealers holding stablecoins.

Previously, firms faced a 100% haircut on stablecoin holdings, making institutional use prohibitively costly. The SEC now aligns stablecoin treatment with money market funds at a 2% haircut.

This change removes a long-standing barrier for regulated institutions looking to adopt stablecoins in daily operations.

SEC Cuts Capital Burden on Broker-Dealers

Under the old framework, broker-dealers faced a steep capital penalty for holding stablecoins. A 100% haircut meant every dollar in stablecoins required an equal dollar set aside.

A firm holding $1 million in stablecoins effectively locked up $2 million in balance sheet capacity. That structure made stablecoins costly and unattractive for regulated financial institutions.

This arrangement gave Wall Street little reason to integrate stablecoins into daily operations. The capital cost far outweighed any operational benefit stablecoins could realistically offer.

Consequently, traditional finance largely stayed away from stablecoin use under these rules. Regulated broker-dealers could not incorporate them without visibly straining their capital ratios.

Crypto market commentary account Bull Theory addressed the change directly in a post. “The SEC has changed the rules, which forced Wall Street to need $2 million in capital to hold $1 million in stablecoins,” the account stated.

CRYPTO MARKET JUST SECURED ITS BIGGEST WIN OF 2026

The SEC has changed the rules, which forced Wall Street to need $2 million in capital to hold $1 million in stablecoins.

TradFi broker dealers must follow capital rules. When they hold an asset, they must set aside capital… pic.twitter.com/cfTt751EAA

— Bull Theory (@BullTheoryio) February 21, 2026

The revised haircut now stands at 2%, consistent with money market fund treatment. Firms now set aside only a small buffer rather than freezing the full amount.

This correction makes stablecoins balance sheet friendly for the first time under U.S. regulatory rules. Broker-dealers can now hold stablecoins without straining their capital positions or compliance standings.

The change applies broadly across regulated institutions operating in traditional finance. It stands as one of the most practical regulatory adjustments for crypto in 2026.

Stablecoin Integration Into Traditional Finance Now More Viable

With the capital burden reduced, broker-dealers can bring stablecoins into everyday institutional workflows. Settlement, collateral transfers, and tokenized treasury transactions all become accessible for regulated firms.

These are standard financial functions that previously excluded stablecoin participation entirely. The revised rule opens those operational pathways directly to Wall Street.

Stablecoins have long served as the bridge between traditional finance and crypto markets. That bridge becomes far more functional when institutions can cross it without a capital penalty.

Greater institutional participation strengthens stablecoins as core financial infrastructure over time. Demand grows as more firms incorporate stablecoins into routine operations.

More demand for stablecoins also supports broader crypto market activity going forward. Settlement becomes more efficient when institutions move stablecoins freely across platforms.

On-chain transactions grow more practical for regulated entities operating at meaningful scale. The crypto market gains a more reliable and institutional-grade liquidity layer as adoption expands.

This regulatory shift did not expand the risk profile of crypto for institutions. Rather, it corrected a disproportionate treatment inconsistent with comparable low-risk financial instruments.

Stablecoins backed by short-term assets were previously treated far more harshly than similar products. The 2% haircut now aligns regulatory treatment with the actual financial risk stablecoins carry.

The post Stablecoins Clear Major Regulatory Barrier as SEC Revises Capital Rules appeared first on Blockonomi.

BlackRock plans to stake up to 95% of ETH in ETHB, sharing 82% of rewards with investors for steady yield.

The ETF lets institutions earn from Ethereum without handling complex staking themselves.

ETHB launch reflects a major U.S. policy shift, now allowing staking rewards in exchange-traded products.

BlackRock is gearing up to launch a groundbreaking Ethereum staking ETF, signaling a new era for institutional crypto investors. The iShares Staked Ethereum Trust, trading under the ticker ETHB, could transform ETH from a passive holding into a yield-generating asset. 

According to Arkham, the ETF plans to stake up to 95% of its Ethereum while sharing 82% of the rewards with investors. This initiative follows BlackRock’s successful spot Ethereum ETF, ETHA, which has already accumulated over $6 billion in assets.

The fund got its first funding from a “Seed Capital Investor,” who bought 4,000 shares at just $0.25 each. BlackRock has officially filed with the SEC, but there’s still no set launch date. Experts expect the ETF to start sometime in the first half of 2026. 

Besides getting regulatory approval, this move also reflects a big shift in U.S. rules, now allowing staking rewards to be included in ETFs—something that wasn’t possible before.

Staking Structure and Revenue Model

BlackRock intends to stake between 70% and 95% of the Ether held in ETHB. To meet redemption demands, the fund will maintain a “Liquidity Sleeve” of 5% to 30% in unstaked ETH. This setup ensures investors can access liquidity even while the majority of assets generate staking rewards. 

Additionally, the fund will share 82% of staking rewards with investors, while BlackRock and Coinbase, as the prime execution agent, retain 18%. The trust carries a sponsor fee of 0.25% on top of staking revenue cuts.

Investors can monitor ETHB’s real-time performance and holdings through Arkham’s Intel Platform. BlackRock already ranks as the fourth-largest entity on Arkham, with over $57 billion in on-chain holdings as of February 2026. 

However, traders should note that T+1 settlement in traditional finance delays on-chain evidence of ETH purchases by one business day. Monitoring BlackRock’s entity page reveals these significant capital movements as they settle on the blockchain.

Despite Ethereum trading below $2,000 during the ongoing “crypto winter,” institutional participation in DeFi continues to rise. The ETHB ETF represents a convergence of traditional finance with decentralized finance infrastructure. 

Moreover, it opens opportunities for institutions seeking yield on long-term ETH holdings without navigating complex staking processes. Consequently, ETHB could redefine Ethereum’s utility for large-scale investors.

The post BlackRock Prepares ETH Staking ETF Amid Institutional Push appears on Crypto Front News. Visit our website to read more interesting articles about cryptocurrency, blockchain technology, and digital assets.

European Central Bank (ECB) president Christine Lagarde is stepping down sometime before the French presidential election next year.

Under her leadership, the ECB has consulted on the Markets in Crypto Assets (MiCA) legislation that defined the crypto landscape in the European Union. The preeminent European bank also began work on the digital euro — the next iteration of the Eurozone’s currency.

But there is still work to be done on crypto policy in Europe. MiCA does not, in its current form, regulate decentralized finance (DeFi), and policymakers at the ECB are still deliberating over the digital euro’s final details.

While the exact timing of Lagarde’s departure has not yet been determined, observers are already speculating about who will take her place and how it will affect crypto policy in Europe.

Lagarde was a crypto-skeptic, critical of stablecoins

Like many central bankers, Lagarde has been cautious at best when it comes to cryptocurrencies. In 2022, she said regarding crypto, “My very humble assessment is that it is worth nothing.”

“It is based on nothing ... There is no underlying asset to act as an anchor of safety.”

She said that crypto should be regulated, citing concern that investors did not understand the risks associated with crypto investing and would “lose it all.”

This set the tone for the ECB consultations on MiCA that would follow. The ECB itself does not create laws, but throughout the legislative process, the ECB advised, observed and offered comments, particularly over areas related to monetary policy and payments regulations.

Even after MiCA was passed, Lagarde advocated for tight regulations on stablecoins and aligning international standards. In September 2025, she called on lawmakers in Europe to provide safeguards for stablecoins and equivalence for foreign stablecoin issuers to prevent the risk of stablecoin runs.

“European legislation should ensure that such schemes cannot operate in the EU unless supported by robust equivalence regimes in other jurisdictions and safeguards relating to the transfer of assets between the EU and non-EU entities,” she said.

“This also highlights why international cooperation is indispensable. Without a level global playing field, risks will always seek the path of least resistance.”

She further stated that stablecoins are a threat to national sovereignty and turn money from a public good into a privately controlled enterprise.

“When stablecoins are left unchecked, we risk creating a system in which money is controlled by the private sector. That is not the mandate we were appointed to serve as public servants.”

Demand for digital cash and the euro

While a noted crypto skeptic, Lagarde acknowledged the demand for digital currencies back in 2021. In an interview that year at the World Economic Forum, Lagarde said, “If customers prefer to use digital currencies rather than have banknotes and cash available, it should be available.”

“We should respond to that demand and have a solution that is European based, that is secure, that is available, and friendly terms that can be used as a means of payment.” At the ECB level, this response took the form of the digital euro.

But the wheels of Brussels do not turn quickly. The investigation phase for a digital euro began all the way back in October 2021. In October 2025, the ECB completed the preparation phase when its governing council decided to start preparing for issuance.

Envisioned timeline for digital euro rollout. Source: PwC

The digital euro has faced harsh criticism, namely that it will give central banks yet another tool to monitor consumer behavior, control spending and eradicate anonymous transactions. There have also been concerns over offline operability and overreliance on digital systems.

The ECB claims that the digital euro will have strict privacy standards and that it will bring all the same benefits of cash to the digital monetary space. In October 2025, Lagarde said that the ECB wants to make the euro “fit for the future, redesigning and modernising our banknotes and preparing for the issuance of digital cash.”

Her colleague, ECB executive board member Piero Cipollone, iterated that the digital euro “will ensure that people enjoy the benefits of cash also in the digital era. In doing so, it will enhance the resilience of Europe’s payment landscape, lower costs for merchants, and create a platform for private companies to innovate, scale up and compete.”

New ECB frontrunners unlikely to depart from cautious stance

Lagarde’s decision to step down comes at a politically fraught time. Leaving before the next French presidential election will allow President Emmanuel Macron to participate in picking her replacement.

France is the second-largest economy in the EU, and according to Reuters, no ECB president has been picked without a nod from Paris.

The right-wing National Rally has been ascendant in the polls recently, while Macron has failed to offer stable governance, with seven different prime ministers serving under his tenure. National Rally president Jordan Bardella claims that, in choosing a new ECB president, Macron would be able to exercise influence beyond the end of his official term.

According to the Financial Times, the current frontrunners to replace Lagarde are former Spanish central bank governor Pablo Hernández de Cos and former Dutch central bank governor Klaas Knot.

In 2022, Hernández de Cos said at a Bank of International Settlements (BIS) conference that crypto can “pose highly significant risks that are hard to understand and measure, even for the most experienced agents.”

He called for a robust regulatory framework to transition crypto from “that hyperbolic ‘Wild West’ myth to a more desirable orderly ‘railroad of civilisation.’”

Knot has been similarly cautious. Speaking before the BIS in 2024, he acknowledged the possible benefits of certain aspects of blockchain technology.

“Creating a digital representation of an asset and placing it on a distributed ledger could bring benefits to the financial system. This includes efficiency gains and potentially increased liquidity of certain assets. Of course, there may also be risks for financial stability.”

Still, he stressed the regulators were assessing the implications these technologies would have on broader financial stability, stating that, “We cannot presume that this innovation, and potentially more decentralization, will bring significant benefits to the global financial system.”

In June 2025, he addressed stablecoins specifically. Knot said that whether the next form of money comes via stablecoins or already established payment networks “should be something we are agnostic on.”

While neutral on the manner of technology supporting financial innovation, he said that “fostering innovation must not come at the expense of stability.”

While often criticized for the glacial pace of progress, the EU managed to pass a comprehensive crypto framework earlier than the far more crypto-friendly United States. This framework included guidance and input from a crypto-cautious central bank, with a skeptic at the helm.

Magazine: Bitcoin may take 7 years to upgrade to post-quantum: BIP-360 co-author

TLDR:

RWA integration reaches a new level as BlackRock’s $2.4B BUIDL fund goes live on UniswapX for 24/7 trading

Apollo Global Management is authorized to acquire up to 90M MORPHO tokens over 48 months.

MORPHO token surged 17.8% after Apollo’s formal cooperation agreement was publicly announced.

Wall Street’s governance token purchases signal a major shift in institutional DeFi confidence.

RWA momentum reached a new milestone this week as BlackRock and Apollo Global Management moved beyond pilot programs into deep infrastructure integration.

BlackRock connected its tokenized fund to Uniswap’s trading rails, while Apollo signed a formal agreement with Morpho’s lending protocol.

Together, these moves mark a structural shift in how traditional asset managers are engaging with decentralized finance. Wall Street is no longer testing the waters; it is now actively building within them.

BlackRock Plugs BUIDL Into Uniswap’s Trading Infrastructure

BlackRock partnered with Securitize and Uniswap Labs to integrate its BUIDL fund into the UniswapX system. The fund currently holds approximately $2.4 billion in assets under management. Eligible institutional investors can now trade BUIDL against USDC around the clock, seven days a week.

Notably, the integration bypasses traditional AMM liquidity pools entirely. Instead, it uses UniswapX’s off-chain order routing system, which settles transactions on-chain.

Orders flow through a Request-for-Quote framework to whitelisted market makers, including Wintermute and Flowdesk, acting as solvers.

Sentora’s newsletter captured the weight of the moment, noting that “the era of testing is over,” and that Wall Street is now “actively utilizing decentralized protocols to trade and lend” tokenized assets.

RWA momentum continued as two of the world’s largest traditional asset managers, BlackRock and Apollo Global Management, moved to deep infrastructure integration.

We break it down in our latest newsletterhttps://t.co/ZLRaKbNfEM

— Sentora (@SentoraHQ) February 21, 2026

Securitize handles compliance by pre-qualifying all participating wallets. This structure keeps institutional capital separate from non-KYC retail pools.

Beyond the technical setup, BlackRock also purchased an undisclosed amount of UNI governance tokens, marking its first direct financial engagement with a DeFi protocol’s governance structure.

Apollo Enters Decentralized Credit Through Morpho Agreement

Apollo Global Management, which oversees $940 billion in traditional assets, signed a formal cooperation agreement with Morpho.

The deal centers on building and scaling on-chain lending markets using Morpho’s infrastructure. Apollo and its affiliates are authorized to acquire up to 90 million MORPHO tokens over the next 48 months.

Sentora  framed the broader trend clearly, stating that these institutions are “natively plugging tokenized assets into Uniswap’s liquidity rails and Morpho’s lending markets.”

The MORPHO token rallied 17.8% in the week following the announcement, according to CoinGecko data. Apollo’s acquisition strategy combines open-market purchases with over-the-counter transactions, with strict ownership caps and transfer restrictions built into the agreement.

Morpho’s architecture suits institutional needs because it allows permissionless market creation. Apollo can launch isolated lending pairs and custom vaults without waiting for a DAO governance vote.

This flexibility lets large managers set their own collateral ratios and interest rate parameters within a controlled environment.

Wall Street’s Growing Appetite for DeFi Governance Tokens

The RWA narrative is evolving beyond asset tokenization into active protocol ownership. Both BlackRock and Apollo are now acquiring governance tokens, a practice that traditional institutions previously avoided due to regulatory concerns.

As Sentora analyst Gabriel Halm put it, these firms view governance tokens as “essential infrastructure stakes,  analogous to holding equity in a clearinghouse or a traditional exchange network.”

This shift also reflects a broader efficiency argument. Traditional markets carry T+1 or T+2 settlement delays and fragmented liquidity.

Halm noted that by “plugging tokenized Treasuries into decentralized routing and building structured credit on permissionless rails, institutions are actively upgrading their operational efficiency.”

These advantages are increasingly difficult for institutional managers to overlook as competition for yield tightens.

Meanwhile, the broader DeFi market shows mixed conditions. TVL and token supply remain flat, and leveraged ETH restaking strategies have moved into negative carry territory.

The debt-weighted average cost of borrowing ETH now sits at 3.40%, exceeding yields across all major liquid staking and restaking protocols tracked as of February 20, 2026.

The post RWA Goes Mainstream: BlackRock and Apollo Plug Billions Into Uniswap and Morpho Protocols appeared first on Blockonomi.

Robert Kiyosaki’s long game from 'Rich Dad Poor Dad' to Bitcoin (3:28)

I’ve been following Robert Kiyosaki for almost a decade now, to understand why he just loaded up on Bitcoin again.

Back when Rich Dad Poor Dad was being passed around like contraband in office cubicles. I remember my best friend at work,  ready to buy a house purely as an “investment” and stopping mid-process because of Kiyosaki’s philosophy.

That one idea that your home is not an asset if it takes money out of your pocket.

A lot of people (including me) grew up believing in owning the house, leasing the car, climbing the salary ladder, trusting the system to reward patience. That’s the traditional playbook. Buy property. Hold dollars. Contribute to a retirement plan. Let the institutions handle the rest.

Kiyosaki challenged that mindset. And that's why his timing any asset matters.

Related: Rich Dad Poor Dad author has a harsh warning to 10 states 'collapsing'

Rich Dad Poor Dad author buys Bitcoin 

The Rich Dad Poor Dad author said this week that he picked up another whole Bitcoin at $67,000, arguing that a coming wave of money printing, what he calls “The Big Print”  will eventually lift hard assets.

“Although Bitcoin is crashing I bought one more whole Bitcoin for $67k,” he wrote. “Because the Big Print will begin when the US debt crashes the dollar…When the 21st millionth Bitcoin is mined…. Bitcoin becomes better than gold.”

Let’s start with the obvious. Bitcoin isn’t crashing. You can call it a correction as the price is down 46% from an all-time high of $126,080.

It’s hovering near $68,000. But the good news is that the broader crypto market cap is sitting above $2 trillion. ETFs are trading. Wall Street is involved. This isn’t a panic tape

Trending on TheStreet Roundtable:

New IRS Form 1099-DA may trigger inflated tax payments

U.S. state retirement fund boosts MicroStrategy stake despite stock downgrade

U.S. senator warns Treasury Secretary against 'bailing out billionaires'

The debt bet

To sum up Kiyosaki’s philosophy (based on years of reading his books, listening to his podcasts, and following his lengthy posts) he believes U.S. debt is fundamentally unsustainable, and that policymakers will ultimately respond the only way they historically have through monetary expansion.

Related: Analysts warn U.S. debt will surge to $64 trillion

Federal debt sits above $34 trillion. Interest costs are climbing. Fiscal deficits remain elevated. And even this week, markets got a reminder of how fluid policy can be, the Supreme Court struck down President Trump’s emergency tariff authority under IEEPA, only for a new 10% global tariff to be announced under a different statute hours later.

His argument is that high-debt systems historically avoid prolonged austerity. When pressure builds, expansion becomes politically easier than contraction.

If that pattern holds again, hard assets tend to benefit.

Why Bitcoin, not just gold?

Kiyosaki has long favored gold and silver. Bitcoin is a newer addition to his playbook.

The appeal is straightforward, its capped supply.

Gold supply grows slowly but still grows. Bitcoin issuance, by contrast, is programmatic and capped at 21 million coins.

Markets have known about it for years. But scarcity narratives tend to matter most when monetary conditions are uncertain.

We’ve seen versions of that before.

During the 2020 pandemic stimulus cycle, Bitcoin rallied from below $4,000 to above $60,000 within a year as global liquidity surged. In 2022, as the Federal Reserve tightened aggressively, Bitcoin retraced sharply, falling to the mid-teens.

Related: New IRS Form 1099-DA may trigger inflated tax payments

Hayden Adams, founder of the decentralized exchange Uniswap, has warned users about fraudulent ads impersonating the platform, highlighting a case in which a victim reportedly lost everything.

It comes after January saw the highest amount of money stolen in crypto scams in 11 months.

“Scam ads keep returning despite years of reporting,” Adams said in an X post on Friday. “There were scam Uniswap apps while we waited months for App Store approval,” he said.

Scammers are increasingly buying ads on popular search engines targeting keywords like “Uniswap,” so when crypto users search for it, the top result looks official.

Unsuspecting users may then connect their wallets and approve a transaction, allowing scammers to drain their entire funds.

A consequence of a “long chain of bad decisions”

An X user named “Ika” said in an X article, titled “I lost everything, what’s next?” that his crypto wallet, valued in the mid-six-figure range, was drained despite his extreme care. “Disciplined for two years. Half-searching for a web3 job, half-hoping to make it fast enough not to need one,” he said.

“I believe that getting drained isn't bad luck. It's the final consequence of a long chain of bad decisions,” Ika said.

Source: Ika

The lengthy post on X came shortly after he posted a screenshot of a top Google search result with an inauthentic Uniswap link. 

It isn’t the first time that Uniswap has experienced this issue. In October 2024, Cointelegraph reported that scammers recognized the website’s lack of domain authority and created a version of the site that looks exactly like the real one, except that it featured a “connect” button where “get started” should have been and a “bridge” button where “read the docs” should have been.

More recently, the value of cryptocurrency stolen through exploits and scams reached $370.3 million last month, the highest monthly figure in 11 months and a nearly fourfold rise from January 2025. 

Crypto security company CertiK said that of the 40 exploit and scam incidents over January, the majority of the total value stolen came from one victim that lost around $284 million due to a social engineering scam.

Magazine:  Is China hoarding gold so yuan becomes global reserve instead of USD?

BlockBeats news, on February 21, according to The Block, the GENIUS money market ETF launched by ProShares set a record of $17 billion in trading volume on its first day, holding assets that meet the legal reserve requirements for USD stablecoins, including U.S. Treasury bonds. The fund aims to help issuers meet daily redemption requests without having to sell long-term bonds at a loss during periods of market pressure.

According to reports from Caixin, along with the joint announcement by the People's Bank of China and eight other departments (regarding further prevention and handling of risks related to virtual currencies, referred to as "Document No. 42"), the regulatory framework for the issuance of RWA (Real World Assets) from domestic assets to overseas is taking shape. The overall tone of Document No. 42 is that domestic issuance is strictly prohibited and overseas issuance is strictly regulated. According to sources familiar with the regulations, Hong Kong is one of the overseas issuance locations for RWA, and RWAs based on assets in Hong Kong are not within the regulatory scope of Document No. 42 and are not under the jurisdiction of domestic regulatory authorities. Currently, there are no RWAs based on domestic securities or funds as underlying assets in overseas locations like Hong Kong. If there were, they would fall under the responsibility of the China Securities Regulatory Commission's Institutional Department. Additionally, "it was originally not allowed at all". Now, "it is not stated that it is not allowed at all", but there is strict regulation on the outbound RWA of domestic assets. There is no implication of 'encouragement' in this; it must not be interpreted as 'promoting development'.

OpenAI has told investors it now plans to spend about $600 billion on total compute by 2030. That replaces the earlier $1.4 trillion infrastructure figure that CEO Sam Altman had discussed months ago.

The new number comes with a clearer timeline. US media alleges that the lower target follows concern that expansion plans were too aggressive compared with expected revenue.

OpenAI is now projecting more than $280 billion in total revenue by 2030, with consumer and enterprise segments contributing almost equally.

Reportedly, the revised spending plan ties directly to that revenue outlook.

OpenAI resets spending plan

As Cryptopolitan reported during the second half of last year, OpenAI announced many multibillion-dollar infrastructure agreements after partnering with major chipmakers and cloud providers to expand supercomputing capacity.

Meanwhile, Nvidia has confirmed that it is in talks to invest up to $30 billion in OpenAI as part of a funding round. That round could value OpenAI at a $730 billion pre-money valuation. The potential $30 billion investment is separate from the $100 billion infrastructure agreement announced in September between Nvidia and OpenAI.

A person familiar with the matter said the $30 billion is not tied to deployment milestones. The September framework was different. It outlined Nvidia investing over several years as new supercomputing facilities came online. At the time, it was said that Nvidia’s first $10 billion would be deployed once the first gigawatt facility was completed.

The possible $30 billion investment does not follow that same structure. However, the person said Nvidia could still participate in future rounds that align with the September framework. OpenAI reported $13.1 billion in revenue for 2025. That exceeded its $10 billion target. The company burned $8 billion during the year, below its earlier $9 billion spending target. These numbers were shared by sources familiar with internal figures.

Nvidia faces earnings spotlight

OpenAI started in 2015 as a nonprofit research lab. It became mainstream after launching ChatGPT in 2022. ChatGPT now serves more than 900 million weekly active users, up from 800 million in October, according to people with knowledge of the data. The coding tool Codex has passed 1.5 million weekly active users. Codex competes with Anthropic’s Claude Code, which has gained adoption over the past year.

Nvidia is set to release quarterly earnings on Wednesday. Investors are watching closely as concerns grow about returns on artificial intelligence spending. Nvidia is currently the largest company in the world by market capitalization. Its stock surged after ChatGPT launched in late 2022. So far in 2026, shares of Nvidia and other Magnificent Seven companies have stalled.

Markets are also watching upcoming earnings from Salesforce and Intuit. Software stocks have fallen this year. Investors worry that artificial intelligence will disrupt traditional business models.

In November, Nvidia stated in its quarterly report that there was “no assurance that we will enter into definitive agreements with respect to the OpenAI opportunity or other potential investments.”

Sam Altman responded to speculation on X, writing that OpenAI loves working with Nvidia and that he does not “get where all this insanity is coming from.”

Earlier this month, Jensen Huang told Jim Cramer there was “no question” Nvidia would invest in OpenAI’s next funding round.

Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.

The post Why WLFI Price is Rising Today: Trump-Backed RWA Deal and Apex Integration Fuel Demand appeared first on Coinpedia Fintech News

While the broader crypto market has been rotating capital selectively this week, Trump-linked World Liberty Financial (WLFI) is quietly building momentum, climbing over 3% today and extending its weekly surge to around 12% as institutional headlines and on-chain movements converge. Here’s a closer look at the catalysts fueling the recent WLFI price rally.

RWA Expansion Anchors WLFI’s Next Growth Chapter

World Liberty Financial confirmed a strategic partnership with Securitize and DAR Global to launch institutional-grade real-world asset offerings. The first asset tied to this initiative is Trump International Hotel & Resort, Maldives, marking a direct connection between blockchain infrastructure and a branded physical property.

JUST IN – The Next Generation of RWAs We are officially partnering with @Securitize and @dar_global to bring institutional-grade RWA offerings. (Availability limited to supported jurisdictions)The first asset on the list? Trump International Hotel & Resort, Maldives. … pic.twitter.com/lSuN652g6U

— WLFI (@worldlibertyfi) February 18, 2026

For the broader market, this matters. Tokenized real-world assets are increasingly being positioned as the bridge between traditional finance and decentralized infrastructure. By anchoring its first RWA initiative to a Trump-branded property, Trump-linked WLFI is embedding political branding into a financial product narrative, a combination that drives both retail curiosity and institutional evaluation.

 This development reinforces the argument that the WLFI crypto ecosystem is not limited to speculative token activity but is positioning itself within compliant asset tokenization frameworks.

Apex Group Integration Expands Stablecoin Utility

Beyond the RWA announcement, WLFI’s collaboration with Apex Group to pilot the USD1 stablecoin as a settlement rail for tokenized funds has strengthened the infrastructure thesis behind the WLFI token. Stablecoin settlement layers are often overlooked because they operate in the background. Yet institutional adoption depends on backend reliability. 

LATEST: Global financial services provider Apex Group is partnering with World Liberty Financial to pilot using WLFI's USD1 stablecoin as a payment rail for its tokenized fund ecosystem. pic.twitter.com/7tYZWae0Pj

— CoinMarketCap (@CoinMarketCap) February 19, 2026

By integrating USD1 into structured fund settlement workflows, WLFI crypto transitions from concept to operational functionality. Markets typically reward that shift. The combination of tokenized real-world assets and settlement infrastructure signals vertical integration ,something investors increasingly look for when assessing long-term protocol viability.

WLFI Price Structure Turns Constructive as Bulls Reclaim Ground

WLFI price had been in a downward trend for several weeks, consistently forming lower highs while defending horizontal demand between approximately $0.10 and $0.11. The recent bounce originated directly from that demand zone, reclaiming short-term moving averages and pressing against the upper boundary of the descending channel. Alongside the rise, volume rise during this push suggests buyers are attempting to reclaim structural control rather than merely executing a relief bounce.

Immediate resistance now sits near the $0.125–$0.13 region. A sustained break and acceptance above that level could open upside toward the $0.15-$0.16, the trendline hurdle, where prior distribution occurred. Failure to maintain support above $0.11 would shift structure back into consolidation.

Whale Wallet Activity Signals Strategic Positioning

Adding to the momentum, multiple large WLFI transfers were recorded from a tracked wallet, including over 133 million WLFI moved to a proxy-linked address and an additional 26.6 million WLFI to another wallet. Large token transfers during periods of positive news tend to attract trader attention. While internal restructuring cannot be immediately classified as accumulation, the sequencing of institutional announcements and high-value token movement often contributes to bullish interpretation.

Final Thoughts

WLFI price is approaching a structural inflection point as institutional headlines and on-chain activity converge with technical compression. A sustained move above the $0.13 resistance zone would likely expose the $0.15–$0.16 liquidity pocket, where prior supply emerged. However, failure to hold above the $0.11 demand band could return the WLFI token to consolidation mode. Momentum currently favors buyers, but continuation will depend on volume expansion and sustained narrative follow-through rather than isolated news catalysts.

According to DeBank data, the WLFI multi-signature contract: 0x5b...7dbb deposited 890 million WLFI (worth approximately 104 million USD) as collateral to Dolomite at 5:33 UTC+8 today, and subsequently lent out 20 million USD1. It is noteworthy that this WLFI multi-signature contract: 0x5b...7dbb appears to be engaging in cyclical stablecoin interest generation, having cumulatively deposited 890 million WLFI, 97.553 million USDC, and 17,700 WETH as collateral and lent out 110 million USD1; subsequently, 109.9 million USD1 continued to be used along with 1,497.9 WETH as collateral and lent out 88.282 million USDC.

The post IoTeX Bridge Hacked for $8.8M via Private Key Exploit, IOTX Price Dips appeared first on Coinpedia Fintech News

IoTeX’s cross-chain bridge was hit by a private key exploit on February 21, draining over $8 million in crypto assets and sending the IOTX token tumbling. The attack, which unfolded between 7 and 9 AM UTC, gave the hacker control over IoTeX’s TokenSafe and MinterPool contracts.

On-chain analyst Specter was among the first to flag the breach, reporting that the attacker drained $4.3 million in tokens including USDC, USDT, IOTX, PAYG, WBTC, and BUSD. The stolen assets were quickly swapped to ETH, with approximately 45 ETH bridged to the Bitcoin network.

But that was only part of the damage.

Attacker Minted Millions in CIOTX and CCS Tokens

Beyond the initial drain, the hacker exploited the compromised contracts to mint $4 million in CIOTX tokens and $4.5 million in CCS, pushing total estimated losses toward $9 million.

Blockchain security firm PeckShield confirmed the exploit on X, writing: “The IoTeX Bridge has been hacked for over $8M worth of crypto due to a compromised private key. The hacker has swapped the stolen funds to $ETH and has started bridging them to BTC via THORChain.”

#PeckShieldAlert The IoTeX[.]io Bridge @iotex_io has been hacked for over $8M worth of crypto due to a compromised private key. The hacker has swapped the stolen funds to $ETH and has started bridging them to #BTC via #Thorchain. pic.twitter.com/uNWHzahk4F

— PeckShieldAlert (@PeckShieldAlert) February 21, 2026

Three attacker addresses have been publicly identified so far.

IoTeX Says Actual Losses Are Lower

IoTeX confirmed the breach by 10:30 AM UTC and pushed back on the circulating estimates. The team stated that “initial estimates indicate the potential loss is significantly lower than circulating rumors suggest.”

The company added that it has “already coordinated with major exchanges and security partners, which are actively assisting in tracing and freezing the hacker’s assets.”

We are aware of recent reports regarding suspicious activity involving an IoTeX token safe. Our team is fully engaged, working around the clock to assess and contain the situation. Initial estimates indicate the potential loss is significantly lower than circulating rumors…

— IoTeX (@iotex_io) February 21, 2026

IOTX Price Reacts to the Exploit

IOTX is currently trading near $0.0049, down 9.2% over the last 24 hours, with daily volume surging over 507%.

This incident follows a rough stretch for cross-chain bridges in 2026. Just three weeks ago, CrossCurve lost $3 million in a separate bridge exploit, and January alone saw nearly $400 million in total crypto thefts industry-wide.

IoTeX says the situation is “under control” and has promised continued updates. Analysts are now watching whether the frozen funds can be recovered before the attacker moves them further.

Tether ends CNH₮ minting and starts a two-phase exit after reviewing usage and demand.

Redemptions remain available for one year as the token exits across supported chains.

The firm reallocates resources to products with stronger adoption and durable utility.

Tether has announced a strategic transition for CNH₮, its offshore Chinese yuan-pegged stablecoin, and said it will phase out the token through a structured two-phase process. The company has already stopped issuing new CNH₮ and said it plans to discontinue redemption support one year after the announcement date. Tether linked the move to market demand, operational sustainability, ecosystem conditions, and community adoption.

Review Process Tied to Community Adoption

Tether said it regularly evaluates its stablecoin offerings to keep them aligned with real-world usage and long-term sustainability. It also said product decisions must match the needs of the communities that use its tokens. 

Tether pulls plug on CNH₮ !

Tether will discontinue support and new issuance of its offshore yuan-pegged stablecoin CNH₮, citing limited demand and market conditions, while allowing redemptions for one year.#Tether #Stablecoin $USDT #CryptoTale pic.twitter.com/EoBPs1kIO1

— CryptoTale (@cryptotalemedia) February 21, 2026

In its blog post, Tether described how it decides whether to maintain or introduce a token. Tether said, “Community interest and adoption are central to every product decision we make.” 

“When evaluating whether to maintain or introduce a Tether token, we assess market demand, operational sustainability, and broader ecosystem conditions that influence long-term usability.” Tether added that its priority is to allocate resources to strengthen “security, reliability, and innovation” across digital assets.

Decision to Discontinue CNH₮

Tether said it reached its decision after review and then set out a planned wind-down. “After careful consideration, Tether has decided to discontinue support for CNH₮.” It also said the transition will follow a process used in earlier product sunsets. 

The company said the transition will proceed in two phases. First, it has ceased all new issuances of CNH₮, so it will not mint additional tokens going forward. It framed the step as a way to reallocate resources toward products with stronger adoption and longer-term relevance. 

Tether also tied the decision to CNH₮ usage levels and to the standards it applies across its stablecoin portfolio. It said the token’s demand did not support continued operational focus at those standards.

Redemption Timeline and Holder Guidance

Next, Tether said it plans to discontinue redemption support for CNH₮ one year after the announcement date. It told holders across supported blockchain networks to redeem their CNH₮ as soon as possible, and to meet the deadline it will set. 

Until that date, Tether said it will continue to facilitate redemptions in line with its Terms of Service. It also said it will publish a separate reminder notice before the final redemption deadline so holders can track the timeline. 

Related: Tether Moves Toward Top 10 Position in US Treasury Bill Market

Tether said shifting market dynamics and limited community demand contributed to the move. It said the wind-down allows it to streamline its lineup and focus work where it can deliver more value, including core stablecoin liquidity, tokenization infrastructure, and tools for global users and builders. How will this shift shape demand for region-linked stablecoins? 

The transition shows Tether’s approach to product management through its data-based methods, which respond to market needs by converting tokens that fail to maintain user interest and reallocating resources to more valuable assets and infrastructure.

Tether uses three factors to decide which products to support: market conditions, customer demand, and community engagement to maintain its focus on stablecoins and value-adding solutions. The strategy creates a sustainable business model that meets customers’ current needs while adjusting to ongoing changes in the market and customer patterns.

The post Tether Halts CNH₮ Minting as Two-Phase Wind-Down Starts appeared first on Cryptotale.

The post Tether Halts CNH₮ Minting as Two-Phase Wind-Down Starts appeared first on Cryptotale.

Wu said that Uniswap Labs announced the launch of 7 new 'Skills' that allow AI Agents to perform operations on Uniswap. Through the open-source uniswap-ai repository, developers can gain structured access to core protocol operations, providing a starting point for on-chain agent workflows. According to the official terminal operation demonstration, users can introduce this feature through commands. The 7 core skills specifically include: v4-security-foundations, configurator, deployer, viem-integration, swap-integration, liquidity-planner, and swap-planner.

BlockBeats news, on February 21, Sonic Labs released the 2026 ecosystem update (Part One), announcing that CEO Mitchell Demeter and business head Evan Owens have resigned, and management is currently being temporarily undertaken by the board while seeking a new CEO. Sonic stated that the development fund has formed a long-term operational reserve, alleviating pressure from risk investment unlocks, with fund allocations covering S tokens, stablecoins, and government bonds among other assets.

At the strategic level, Sonic Strategy holds approximately 127 million S (multi-signature custody and prohibited from sale) and has ended its collaboration with CMCC Resonance Fund. On the product side, the AI smart contract generation platform Spawn is currently undergoing internal testing; FeeM has allocated over 2.6 million S to developers, and in the future may adjust the 90% rebate to a tiered structure; at the same time, it has terminated the Meme Season and Sonic & Sodas incentive programs, focusing on long-term ecological construction and token economic integration going forward.

BNP Paribas Asset Management issued tokenized fund shares on Ethereum.

Access remains permissioned, with wallets and keys managed by BNP Paribas Securities Services.

Pilot tests public blockchain fund operations within regulated governance controls.

BNP Paribas Asset Management has issued a tokenized share class of a French-domiciled money market fund on Ethereum. The issuance took place recently through an internal pilot led by BNP Paribas. The project explores how public blockchain infrastructure can support regulated fund operations using controlled access.

How the Tokenized Fund Was Structured

According to the announcement, BNP Paribas Asset Management acted as the fund issuer. Meanwhile, BNP Paribas Securities Services served as transfer agent and fund dealer. The tokenization and blockchain connectivity relied on BNP Paribas CIB’s AssetFoundryTM platform.

Notably, the tokenized shares were issued directly on the public Ethereum network. However, access remains restricted through a permissioned model. Only eligible and authorized participants can hold or transfer the tokens, in line with regulatory requirements.

Additionally, BNP Paribas Securities Services operated the wallet infrastructure and held private keys. This setup applied only within the limited intra-group pilot. The bank said the structure allowed end-to-end testing while maintaining governance controls.

Why Public Blockchain Was Used This Time

This initiative follows an earlier tokenized money market fund issued in Luxembourg on a private blockchain. However, this second project used a public blockchain with a different operational design. Both pilots reflect BNP Paribas’ approach to testing multiple tokenization models.

According to Edouard Legrand, Chief Digital and Data Officer at BNP Paribas Asset Management, the project builds operational knowledge. He said the issuance supports efforts to improve efficiency and security within regulated frameworks. Julien Clausse, Head of AssetFoundryTM at BNP Paribas CIB, added that the pilot helps assess governance implications.

Money Market Funds as Tokenization Test Beds

Money market funds play a central role in institutional liquidity management. Therefore, BNP Paribas used this structure to examine blockchain-based issuance and transfer processes. The bank stated the experiment remains a one-off internal test.

According to Paul Daly, Head of Distribution Product Solutions at BNP Paribas Securities Services, the setup streamlines fund operations. The pilot allows the group to evaluate public blockchain integration while preserving investor protections.

The post BNP Paribas Tests Tokenized Money Market Fund on Ethereum appears on Crypto Front News. Visit our website to read more interesting articles about cryptocurrency, blockchain technology, and digital assets.

BlockBeats message, on February 21, Aave Labs DeFi Marketing Director Kolten stated that Aave is currently not in a hurry to replace V3 with V4, and V3 will continue to operate normally in the foreseeable future, even after the release of V4. Over the past year, Aave Labs has continuously promoted the V3 version and actively participated in integration projects built on V3. Although the V4 version is about to be released, the official has not attempted to slow down the growth rate of V3. After the launch of V4, a steady and gradual promotion strategy will be adopted, with deposit limits being set and gradually increased.

Bitcoin (CRYPTO: BTC) has traded in a narrow corridor, effectively flinging up a question mark over the next directional thrust for the market. The past week has seen the benchmark crypto oscillate between roughly $65,900 and $70,500, a range that has left traders parsing for catalysts amid a broader risk-off climate. While momentum has oscillated, the risk of a sudden liquidation cascade remains a live concern: a modest rally could force a wave of short-covering in futures, squeezing risk assets higher and drawing new buyers back into the market. Against this backdrop, the network’s fundamentals have shown resilience, even as macro data continues to shape sentiment.

Key takeaways

A 4.3% rise to about $69,600 could trigger more than $600 million in forced liquidations on short BTC futures, according to liquidation heatmaps. This dynamic underscores how quickly sentiment can flip on a price move.

Hashrate has rebounded toward multi-week highs, with the seven-day average hovering near 1,100 exahashes per second, challenging earlier fears that miners were diverting capacity away from BTC toward other sectors.

The BIP-360 proposal aims to bolster long-term security by enabling post-quantum protection through a backwards-compatible soft fork, addressing concerns about quantum threats while preserving on-chain privacy until spending.

Macro data in the United States showed slower growth than expected, with Q4 2025 GDP at an annualized 1.4%, while inflation remained persistent, complicating expectations for near-term rate cuts and potentially nudging traders toward on-chain hedges.

Futures funding dynamics show continuing pressure from bears, with periods of negative funding and persistent undercurrents that keep the market sensitive to any upside surprise that could trigger a short squeeze.

Tickers mentioned: $BTC, $NVDA

Sentiment: Bearish

Price impact: Positive. A rally toward the $69,600 area could force substantial short liquidations and tilt momentum back toward bulls.

Trading idea (Not Financial Advice): Hold.

Market context: The market sits at a crossroads where macro weakness and on-chain resilience collide: macro data suggests a slower economy and sticky inflation, while the Bitcoin network shows signs of structural strength through rising hashrate and post-quantum security planning, a combination that could set up a short squeeze if price action turns decisively higher.

Why it matters

The immediate price action for Bitcoin is heavily tethered to traders’ expectations about liquidity and leverage in the futures market. When the price nudges, as it did toward the $69,600 region, liquidations—especially on short positions—become a dominant driver of momentum. In recent cycles, a sharp move higher from a tight range has repeatedly triggered a cascade of liquidations, squeezing out speculative bets and luring fresh capital back into the market. This mechanism is particularly potent when the market trades below psychologically important levels and a sudden uptick can trigger a cascade that shifts market psychology from pessimism to renewed risk appetite.

On the fundamental side, the resurgence of network hashrate to around 1,100 exahashes per second signals that participants remain confident enough to invest in BTC mining hardware despite external price pressures. This resilience is notable because it counters early fears that mining capacity might drain away toward other sectors, including AI. The reacceleration in hashrate contributes to a sense of on-chain security and network durability, factors that historically underpin longer-term valuations rather than short-term price skews.

Another dimension of the story is the technical roadmap embodied by BIP-360, a proposal designed to address post-quantum security risks without disrupting current operations. By safeguarding the spend-path and concealing public keys on-chain until spend time, this plan reduces the potential exposure to quantum computing threats while preserving privacy in ordinary conditions. If such a soft fork progresses smoothly, it could restore some bullish confidence by clarifying the long-term security narrative for Bitcoin, helping to offset near-term macro headwinds.

Meanwhile, macro data remains a headwind for many traditional assets. The United States posted GDP growth in the fourth quarter of 2025 at an annualized rate of 1.4%, below expectations, a development that tends to sap risk appetite in equities and dampen immediate expectations for aggressive monetary easing. Coupled with inflation data that showed the PCE price index excluding food and energy rising 0.4% month over month, investors have had to recalibrate their outlooks for rate trajectories. In this environment, on-chain markets can appear attractive to macro traders seeking uncorrelated or counter-cyclical exposure, even as the total market risk remains elevated.

Another layer to consider is the broader risk-off mood evident in traditional markets, including the S&P 500 and gold. As equities waver, gold has emerged as a potential hedge, but the relative stock-bond dynamic remains unsettled. The trading landscape—characterized by muted upside momentum yet persistent volatility—suggests that Bitcoin could act as a catalyst for a broader reallocation if fundamental improvements align with a technical breakout above key levels like $70,000.

In terms of funding dynamics, BTC perpetual futures have shown a mix of negative and neutral readings in recent sessions. This indicates that bears have remained committed to their positions even as price tests important supports. The combination of tighter funding and a risk-off tilt has kept upside momentum in check, even as the network-side improvements create a foundation for possible reversals should liquidity and sentiment align in favor of bulls.

For investors watching the space, the question remains whether this confluence of macro weakness, on-chain resilience, and a clearer security roadmap can coalesce into a sustainable rally or whether the market will continue to drift in a wide range until a new catalyst emerges. In the near term, the path of least resistance may hinge on the balance between fear of macro risks and the lure of a short squeeze driven by liquidations and forced unwindings on the downside bets.

In sum, Bitcoin remains at a pivotal juncture. The combination of a rebuilt hashrate, a tangible post-quantum roadmap, and an expected price re-pricing driven by liquidations could tilt sentiment in favor of bulls, but only if macro catalysts align and the market can sustain buying interest above critical thresholds. As traders monitor the interplay between on-chain fundamentals and macro headlines, the next move could redefine the near-term trajectory for BTC and potentially ripple through the broader crypto complex.

What to watch next

Watch for a move back above $70,000 and the subsequent response in long vs. short positioning in BTC futures.

Track the seven-day hashrate trend toward or above 1,100 EH/s and any updates on the deployment or consensus around BIP-360.

Monitor U.S. macro releases, including GDP and PCE data, for potential shifts in risk appetite and liquidity conditions.

Observe funding rates on BTC perpetual futures for signs of shifting trader sentiment or emerging short squeezes.

Follow ETF flows and commentary around the Bitcoin investment vehicle landscape for potential liquidity influx or withdrawal pressures.

Sources & verification

CoinGlass liquidation heatmap estimates for a move toward $69,600, illustrating potential short BTC futures liquidations exceeding $600 million.

U.S. GDP growth for Q4 2025 at 1.4% annualized, as reported by Yahoo Finance.

U.S. personal consumption expenditures price index ex food and energy rising 0.4% month over month, contributing to the inflation backdrop.

HashrateIndex seven-day hashrate data showing a recovery to around 1,100 EH/s.

BIP-360 post-quantum security framework and its intended soft-fork approach for hiding public keys on-chain until spending time.

BTC perpetual futures funding rate observations from market data providers, including notes on recent negative funding periods.

Bitcoin price dynamics and network resilience

Bitcoin (CRYPTO: BTC) is navigating a delicate phase where on-chain security fundamentals converge with macro headwinds to shape the near-term path of least resistance. The range-bound price action has left the market vulnerable to abrupt shifts driven by leveraged positions, but it is precisely this dynamic that can catalyze swift reversals when liquidity returns and short positions are forced to unwind. CoinGlass estimates suggest that a move to around $69,600 could unleash substantial short liquidations, potentially flipping sentiment from fear to momentum if buyers reenter with conviction. This interplay between price, leverage, and liquidity remains a defining feature of the current market backdrop.

Beyond price, the on-chain story has gained clarity. The seven-day average hashrate has climbed back toward the high end of recent ranges, signaling ongoing mining activity and network resilience even in the face of price pressure. While early concerns that miners would pivot away from BTC toward other sectors have cooled, the resilience of hashrate underscores a broader risk-reward calculus: the network’s security and stability continue to be a central factor for long-term investors evaluating BTC’s role in diversified portfolios. The BIP-360 proposal further reinforces this narrative by addressing post-quantum threats through a backwards-compatible mechanism, significantly reducing the risk posed by quantum computing to on-chain security while preserving user privacy until spend moment.

Market participants are also weighing macro data that remains less than supportive of a rapid risk-on rebound. The GDP print and inflation metrics paint a picture of a still-fragile macro environment, where the quest for yield remains tempered and risk assets require a clear catalyst. In such an environment, Bitcoin’s potential for a short squeeze depends on a combination of technical breakouts, improved on-chain fundamentals, and a shift in risk sentiment—a trifecta that could redraw the balance of power between bears and bulls in the months ahead. Traders will be watching for sustained buying pressure above key levels, and the emergence of a decisive narrative that can both reassure existing holders and entice new entrants into the market.

As the market continues to digest these inputs, the path forward will likely hinge on how quickly macro volatility evolves and how effectively the Bitcoin ecosystem communicates its security and scalability roadmap to a broader audience. The balance between fear and opportunity remains delicate, but the confluence of improved network metrics, post-quantum safeguards, and the potential for liquidity-driven reversals means the coming weeks could redefine Bitcoin’s standing in the risk spectrum. For now, observers should remain cautious but attentive to any shift that could unleash a new cycle of momentum in this evolving market.

This article was originally published as Bitcoin Bears Face $600M Liquidation Risk, Sparks $70K Rally on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Foresight News reported that according to Onchain Lens monitoring, the Pump.fun associated address starting with 77DsB has sold 3.376 billion PUMP again and received approximately 7.23 million USDC. The address currently has about 373.5 million PUMP left, worth approximately 788,000 dollars.

Foresight News report, Circle's official information shows that in the week ending February 19 local time, approximately 5.3 billion USDC were issued, about 4.6 billion were redeemed, and the circulating supply increased by approximately 700 million. As of February 19 local time, the circulating supply of USDC is approximately 73.7 billion, with reserve assets valued at about 74 billion dollars.

BlockBeats news, on February 21, according to Onchain Lens monitoring, whale '0xaCB' deposited 5 million USDC into HyperLiquid and increased its GOLD short position (4x leverage) while opening a new SILVER short position (3x leverage). Current positions:

· 2,978.17 pieces of GOLD (worth 15.21 million USD)

· 97,085.91 pieces of SILVER (worth 8.22 million USD)

TLDR:

Algorand warns that smart contract vulnerabilities cause immediate, irreversible fund loss with no legal recovery path available.

AI tools may store user data in LocalState, a flawed pattern where ClearState drains critical accounting data permanently.

Algorand recommends using Plan Mode and agent skills to design secure contract architecture before writing a single line of code.

Private keys must stay out of AI reach entirely, with OS-level keyrings handling all transaction signing away from the agent.

Algorand is urging blockchain developers to adopt disciplined, AI-assisted practices before deploying smart contracts to MainNet.

The blockchain platform has drawn a clear line between reckless AI-generated code and responsible agentic engineering.

With AI agents now capable of building and deploying contracts in a single conversation, the stakes have never been higher. Deploying vulnerable smart contracts means immediate, irreversible loss of funds with no path to recovery.

The Risk of Unreviewed AI-Generated Code

Algorand developers have identified a growing problem in the broader web3 space. AI coding tools allow developers to ship products faster, but unchecked code carries serious risk.

Unlike web2 breaches, smart contract vulnerabilities cannot be patched after the fact. Funds drained from a poorly written contract are gone permanently, with no legal recourse available.

The Algorand team shared a concrete example of how AI can mislead developers. An AI might store user balances in LocalState, which appears to be the correct pattern.

However, users can clear local state at any time, and ClearState succeeds even when a program rejects it. This means critical accounting data can disappear without warning. Developers who do not understand the code they ship are exposed to exactly this kind of subtle failure.

Algorand’s developers formalized this concern through a public post from the @algodevs account. The post draws from Addy Osmani’s distinction between “vibe coding” and “agentic engineering.”

Shipping with AI? Read this first.

From vibe coding to agentic engineering, here’s how to build secure dApps on Algorand https://t.co/TgP0LBuTjl

— Algorand Developers (@algodevs) February 21, 2026

Vibe coding means accepting all AI output without review. Agentic engineering means the developer remains the architect and final decision-maker throughout the process.

The platform advises developers to use BoxMap instead of LocalState for data that cannot be lost. This kind of nuance is what separates a working contract from a broken one.

AI tools trained on outdated patterns will not flag these issues automatically. Developers must bring their own understanding to every deployment.

How Algorand Recommends Building Safely With AI

Algorand outlines several practices to keep AI-assisted development secure and maintainable. Developers should use Plan Mode before writing any code, allowing the agent to design architecture first.

This produces a spec covering state schema, method signatures, and access control. Reviewing this plan catches design flaws before any implementation begins.

Agent skills play a major role in guiding AI toward correct Algorand patterns. These are curated instructions that encode current best practices directly into the development workflow.

Without them, AI is likely to use deprecated APIs or outdated patterns. Structured prompts reduce hallucinations and produce more reliable contract code.

Private keys must remain completely out of reach of AI agents at all times. Tools like VibeKit use OS-level keyrings so that AI requests transactions without ever accessing signing credentials.

Additionally, developers should use algokit task analyze and simulate calls to catch edge cases. Testing should mirror how an attacker would approach the contract, not just how a user would.

The post Algorand Warns Developers Against “Vibe Coding” Smart Contracts to MainNet appeared first on Blockonomi.