a16z, Saylor blast crypto grey zones

August 01, 2025

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From Italy to a Nasdaq Reservation

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a16z slams crypto bill loopholes, Saylor calls for clearer rules

Key points:

  • Andreessen Horowitz urged lawmakers to scrap the “ancillary asset” model in draft legislation, warning it undermines investor protections.

  • Michael Saylor joined the broader push for a formal crypto taxonomy, calling regulatory clarity essential for innovation.

News - Venture capital giant Andreessen Horowitz (a16z) has issued a strong warning to U.S. lawmakers, urging them to rethink parts of the proposed CLARITY Act. In a letter to the Senate Banking Committee, a16z argued that the bill’s current language around “ancillary assets” risks opening legal loopholes that could enable insider enrichment and weaken the foundational Howey test that defines securities law.

Ancillary assets, the firm explained, are tokens often sold with investment contracts but without offering equity or governance rights. a16z criticized attempts to build legislation around this construct without clear decentralization milestones or transfer restrictions. The firm recommends using a control-based decentralization framework to determine when an asset should transition from security to commodity status.

Industry pushes back on regulatory ambiguity - a16z also took issue with the bill’s approach to primary versus secondary markets, warning it could let insiders bypass oversight through exempted token resales. It called for tighter controls until decentralization is provably achieved. The firm further argued that core functions like staking and running consensus algorithms should not fall under securities law.

Saylor: Formal definitions are long overdue - Michael Saylor, Executive Chairman of MicroStrategy, echoed the call for clarity, urging the U.S. to establish a digital asset taxonomy. He emphasized the need to define what counts as a digital security or commodity, and when tokenization is legally permissible. Saylor believes upcoming legislation like the Digital Asset Market Clarity Act of 2025 could unlock mainstream tokenization if done right.

Crypto treasury boom hits $100B, but Galaxy warns of fragile foundations

Key points:

  • Galaxy Digital flagged systemic risks in the growing crypto treasury trend, likening it to the 1920s investment trust bubble.

  • Over $7.8 billion in corporate crypto buys were announced this week, with firms chasing equity premiums and stacking BTC, ETH, and altcoins.

News - Galaxy Digital has issued a stark warning about the accelerating boom in crypto treasury companies, or DATCOs, which now hold over $100 billion in digital assets. In a new report, the firm compared the trend to the speculative frenzy of 1920s investment trusts, cautioning that the model could become “structurally fragile” if equity premiums to net asset value (NAV) begin to erode.

The standard DATCO strategy, raising equity, using proceeds to buy crypto, and repeating, depends on strong market sentiment, rising token prices, and accessible capital. A downturn in any of these variables could trigger redemptions, stock buybacks, or distressed sales, Galaxy warned.

Massive weekly buying spree raises eyebrows - This week alone, over $7.8 billion in new crypto buys or funding commitments were disclosed by 16 companies. ETH dominated the activity, with firms like BTCS, Sharplink Gaming, and ETHZilla ramping up exposure. Strategy led BTC accumulation with a $2.7 billion buy, while Metaplanet and The Smarter Web Company also made sizable Bitcoin investments. Altcoins like TRX, SOL, SUI, and BNB were also targeted in multi-million and billion-dollar plans.

Premiums, risks, and a crowded trade - Galaxy and Breed VC warned that overreliance on NAV premiums could expose firms to cascading failures in a downturn. If equity premiums flip to discounts, treasury companies may be forced to unwind holdings, putting downward pressure on the broader crypto market. With the trade becoming increasingly crowded, consolidation and acquisitions by stronger players like Strategy may follow if weaker firms falter.

As U.S. sets stablecoin standards, Tether surpasses nations in treasuries

Key points:

  • The GENIUS Act brings sweeping U.S. stablecoin regulations, sparking adoption among banks and fintechs, but leaves foreign issuer rules vague.

  • Tether’s record-breaking $127 billion in U.S. Treasuries underscores growing demand for offshore stablecoins despite rising domestic regulation.

News - The recently signed GENIUS Act has introduced the first comprehensive regulatory framework for U.S.-issued stablecoins, aiming to boost market trust, drive adoption, and strengthen the dollar’s reserve currency status. Industry experts say the law marks a turning point for regulated stablecoins, with major banks, fintechs, and retailers now eyeing issuance strategies.

However, concerns persist over the Act’s ambiguous language around foreign issuers. While U.S. entities face stringent compliance, offshore stablecoins like Tether’s USD₮ remain loosely regulated. Former CFTC Chair Timothy Massad warned the so-called “Tether loophole” could create a competitive imbalance if left unresolved.

Tether’s lead grows amid policy gap - Tether has rapidly expanded its dominance in 2025, issuing $20 billion in new USD₮ and increasing its U.S. Treasury holdings to $127 billion, surpassing South Korea and nearing Saudi Arabia. The firm also reported $4.9 billion in Q2 profit, fueling U.S. infrastructure investments and broader stablecoin usage across 150 countries. CEO Paolo Ardoino emphasized that rising trust in USD₮ reflects its utility in global finance, especially as demand for digital dollars grows in emerging markets.

Stablecoin adoption spreads, but utility faces tradeoffs - While the GENIUS Act prohibits yield-bearing stablecoins to protect consumers, some experts argue this limits their use as a store of value. Investors may turn to DeFi to regain yield exposure, especially as institutional players weigh compliant alternatives. With offshore issuers continuing to grow and regulatory gaps still in play, the full impact of the Act remains uncertain.

Crypto hacks hit $142M in July as offchain attacks rise

Key points:

  • Seventeen major hacks drained $142 million in July, a 27% rise from June’s losses

  • CoinDCX, GMX, and WOO X suffered the largest breaches, with malware and social engineering tactics used

News - The crypto industry saw a fresh wave of security breaches in July, with 17 confirmed hacks leading to losses of approximately $142 million, according to data from blockchain security firm PeckShield. This marked a 27% increase from June’s $111.6 million, making July the fourth-most damaging month of 2025 so far.

India-based CoinDCX suffered the largest single loss at $44.2 million. The breach stemmed from malware installed on an engineer’s laptop, which gave hackers access to an internal operational account. Though user funds remained untouched, Bengaluru police arrested the employee in question after discovering the extent of the compromise.

Decentralized exchange GMX was hit next, with $42 million siphoned through an exploit in early July. The attacker returned over $40.5 million days later, including 10,000 ETH and 10.5 million FRAX. Meanwhile, BigONE lost $27 million in a hot wallet breach on July 16.

On July 24, WOO X experienced a $14 million theft after attackers used social engineering to access a team member’s device and manipulate the platform’s backend. The company later restored affected user balances from its treasury.

Offchain threats take center stage - Rob Behnke, chairman of Halborn, emphasized the growing trend of hackers targeting offchain systems rather than smart contracts. He warned that attackers now exploit backend infrastructure, such as compromised employee devices or development environments, to bypass conventional security audits.

A record-breaking year in the making - With over $2 billion already lost in the first half of 2025, this year is on track to become the worst in crypto crime history. While some platforms are introducing bug bounty programs, July’s data suggests more aggressive security protocols are urgently needed as attackers evolve their methods.

Crypto scams uncovered

  • $540M fraud ring was dismantled across Europe in June 2025 - Europol and Spanish authorities dismantled a global crypto investment fraud ring that laundered approximately €460 million (~$540 million) through accomplices in France, Estonia, and the U.S.

  • CEO behind “AML Bitcoin” sentenced to 7 years prison in July  2025 - Rowland Marcus Andrade, the founder and CEO of AML Bitcoin, was convicted of wire fraud and money laundering after misleading investors and falsely claiming partnerships, receiving an 84‑month sentence.

  • AI‑powered malware “JSCEAL” targets crypto users globally - A new stealth malware campaign named JSCEAL used over 35,000 malicious ads across the EU to infect users via fake wallet apps, stealing credentials and private keys from more than 10 million people.

Top 3 coins of the day

XDC Network (XDC)

Key points:

  • XDC hovered near $0.098 after a strong July rally, reflecting a 0.61% 24h uptick amid profit-taking and market drag.

  • The 9-day SMA continued to provide dynamic support, while the Awesome Oscillator showed renewed bullish momentum with rising green bars.

What you should know:

XDC’s rally cooled after a sharp 80% surge from June lows to a $0.101 peak on July 30. This uptrend was fueled in part by VERT Capital’s $1B asset tokenization announcement, which spotlighted XDC’s RWA positioning. At press time, the token was trading at $0.098, up 0.61% from the previous day. This minor gain followed a round of profit-taking and broader market weakness. Despite the short-term stall, the 9-day Simple Moving Average (SMA) remained supportive, tracking closely below the price. Volume settled around 18.9M, indicating sustained interest despite tempered buying pressure. Meanwhile, the Awesome Oscillator stayed in bullish territory, with its green bars growing once again, signaling renewed upward momentum after a brief cooldown. If bulls maintain control, the next resistance to monitor lies at $0.101, while $0.092 may act as a key support zone.

TRON (TRX)

Key points:

  • TRX traded around $0.32 after a 0.52% intraday rise, recovering slightly from recent dips triggered by broader market pressure and dilution concerns.

  • The Parabolic SAR continued to track below the candles, while the MACD histogram flattened, hinting at fading bullish momentum.

What you should know:

TRX witnessed a mild 0.52% recovery over the last 24 hours, stabilizing after sliding from its recent peak of $0.35. The brief rally came amid a broader market cooldown and investor anxiety over TRON Inc.’s recent $1 billion shelf offering filing, which sparked dilution fears. That news also coincided with a 40% surge in TRX trading volume, reflecting heightened speculative activity. At press time, the token hovered near $0.32, facing resistance around the $0.33 level, a 23.6% Fibonacci retracement zone from July highs. Despite the short-term pullback, the Parabolic SAR dots remained under the candlesticks, supporting the ongoing bullish trend. However, the MACD histogram showed near-zero bars, indicating weakening upward momentum. If bulls regain strength, a breakout above $0.33 could open the path toward $0.35, while downside support lies near the $0.30 zone.

Solana (SOL)

Key points:

  • SOL traded at $169 after a 1.77% daily decline, slipping below the $175 pivot as sell pressure grew amid FTX-related liquidity fears.

  • The price hovered near the lower Bollinger Band, while the Squeeze Momentum Indicator remained green but showed weakening momentum.

What you should know:

Solana’s price dropped 1.77% over the past 24 hours, deepening its decline after breaching the $175 support zone. This downtrend aligned with concerns surrounding FTX and Alameda staking $45 million in SOL earlier this week, just ahead of a creditor repayment deadline. The move triggered speculation that locked liquidity may hinder repayments, spooking market participants. At press time, SOL hovered near $169, positioned slightly above the lower Bollinger Band, which reflected mounting bearish volatility. The Squeeze Momentum Indicator stayed green, but the shrinking histogram bars reflected weakening bullish strength. Volume remained elevated at 2.18 million, confirming the strength behind the ongoing move. Should the price break below $168, the next major support lies around $158. Conversely, any recovery would face immediate resistance near the midline of the Bollinger Band at $179.

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