LayerZero has lost a dozen partners in 2026, with Ethereum node service provider Nethermind becoming the latest to leave after ending its verifier role on Wednesday and moving to a rival. The exits have stacked up since May and include Kelp DAO, Solv Protocol, Re.xyz, Kraken’s kBTC, Lombard, Virtuals Protocol, Yuzu Money, Mantle, BitGo, Huma Finance, and the Wyoming Stable Token Commission. By early July, more than $7 billion in assets had moved off LayerZero, and BitGo’s August departure pushed that total toward $15 billion. The retreat followed LayerZero’s April admission that Lazarus Group hackers had poisoned its internal RPCs. The company said at the time, “We made a mistake by allowing our DVN to act as a 1/1 DVN for high-value transactions.” LayerZero co-founder and CEO Bryan Pellegrino pushed back on early criticism, while one defender said the departures represented about 3% of usage by volume and less than 1% of messages. Even so, the project has kept pulling back support, and ZRO is now down 31% this year, 56% over the past 12 months, and 88% from its December 2024 all-time high.

A large and unusually timed bet hit the U.S. Treasury market just before the Treasury Department announced an expansion of its buyback program. According to BlockBeats, the Pimco 25+ Year Zero Coupon U.S. Treasury Index ETF, traded under the ticker ZROZ, recorded $123 million in net inflows on Tuesday, the biggest single-day inflow in the fund’s history. The ETF, which has about $1.5 billion in assets, also saw trading volume rise to 5.2 million shares, nearly double its previous 2024 peak. ZROZ holds STRIPS, or Separate Trading of Registered Interest and Principal of Securities, which are zero-coupon instruments created by splitting Treasury principal and interest payments. Because the fund carries an effective duration of about 28 years, it is highly sensitive to moves in long-end yields. In theory, a 1 percentage point decline in yields would translate into an about 28% gain in bond prices. The fund rose 3.2% on Wednesday, marking its biggest one-day advance since November 2024.

The U.S. Securities and Exchange Commission has proposed its first formal crypto rulemaking, Regulation Crypto Assets, creating two registration-free paths for token sales. The smaller track would allow up to $5 million over four years, while the larger would permit up to $75 million in any 12-month period and require financial statements plus ongoing reporting. The proposal also includes narrative disclosure standards, state-law preemption for qualifying offerings and certain secondary trades, and a safe harbor that would end investment-contract treatment once an issuer finishes or permanently stops the essential managerial efforts it promised. Paul Atkins said the framework traces back to Hester Peirce’s Token Safe Harbor proposal from February 2020. The piece says the SEC had spent a decade regulating crypto fundraising through lawsuits rather than published rules, which pushed issuers toward Cayman and Swiss foundations, non-U.S. buyers, Reg D rounds, airdrops and points programs. Tyler Warner’s Morning Minute also notes broader market moves, including Bitcoin ETF inflows, Citi’s planned Bitcoin custody launch, Robinhood CEO Vlad Tenev’s call to modernize securities rules for tokenized stocks, and several other market updates.

Bitcoin climbed back above $65,000 for the first time since Aug. 10, but the market is still trading under heavy macro pressure as long-dated U.S. Treasury yields surged and kept risk assets on the defensive. Traders are watching the $62,000-$63,000 area as the main support zone, while resistance is clustered around the 50-month exponential moving average near $65,400 and a possible inverse head-and-shoulders neckline. CryptoQuant said Bitcoin’s 30-day apparent spot demand has recovered sharply from negative 206,000 BTC on July 23 to negative 5,000 BTC, putting it close to its first move back into positive territory since Feb. 26. Historically, the firm said, a shift from negative to positive spot demand has been followed by a median 18.1% gain over the next 60 days, with a 78% win rate. VanEck also said Bitcoin may be nearing the end of its correction, though it cautioned that capitulation signals alone have not produced consistent excess returns over 90- and 180-day windows. At the same time, bond-market stress rippled through equities, hitting AI, semiconductors, crypto-linked stocks, miners and Asian chip shares, while investors turned their attention to the Federal Reserve minutes and a closely watched 20-year U.S. Treasury auction.

Binance said it will update leverage levels for multiple assets under its portfolio margin system at 06:00 UTC on Aug. 21, 2026, with the process expected to take about 30 minutes. ADA, BFUSD, BNB, BNSOL, DOGE, RLUSD, SOL, U, USD1, USDE, USDP, USDS, WBETH and XRP will move from 5x to 10x leverage. A separate group of 41 tokens, including 1INCH and AAVE, will be changed from 3x to 5x. Binance also said BANANAS31, KMNO, MUBARAK, NXPC, PROM, SYRUP, TUT and ZRO will be cut from 10x to 5x. The exchange advised users to monitor uniMMR to reduce the risk of potential liquidations.

The week ahead includes a dense run of crypto policy, exchange and project events. DeepSeek’s revised API pricing takes effect on Aug. 17 with peak and off-peak rates, while Coinbase is scheduled to carry out system maintenance, launch US500 perpetual-style index futures for U.S. users through Coinbase Derivatives, and end support for USDC deposits and withdrawals on Noble. Hashdex is also set to close and liquidate its Bitcoin ETF, and Binance will delist six tokens on the same day. Attention then shifts to regulation. South Korea will implement tighter rules for single-stock leveraged ETF and ETN products on Aug. 19, including stricter deviation-rate controls and an added simulated-trading requirement for first-time retail investors. Politico, citing three people familiar with the matter, reported that the White House may meet crypto and prediction-market executives on Aug. 19. On Aug. 20, the U.S. Commodity Futures Trading Commission’s Innovation Advisory Committee will hold its first meeting, with crypto assets, artificial intelligence and prediction-market oversight on the agenda. The week also features several token unlocks, including LayerZero, KAITO, MBG and SOON, plus project updates from Solana, DGrid AI, SNS, Doodles, Step App and Manus. Binance will make additional network and compliance-related changes later in the week, including restrictions involving EXMO and other platforms.

Data from Token Unlocks shows that several crypto projects are set for sizable token unlocks next week, including LayerZero, KAITO, SOON and MBG By MultiBank Group. Among them, LayerZero’s ZRO has the largest unlock by value, with about 25.71 million tokens scheduled for release at 7:00 p.m. Beijing time on Aug. 20. The release equals roughly 4.40% of its circulating supply and is valued at about $19.9 million. KAITO is set to unlock about 32.6 million tokens an hour later, with the tranche equal to 7.63% of circulating supply and worth about $11.5 million. SOON and MBG are also on the calendar for next week, with unlock values estimated at about $3.9 million and $2.8 million, respectively. The figures were cited by PANews, citing Token Unlocks data.

A dense stream of updates hit crypto and AI markets between Aug. 12 and Aug. 13, spanning venture funding, protocol incidents, regulatory moves, exchange actions and large on-chain transfers. PANews’ roundup included Lovable’s $400 million Series C at a $13.3 billion valuation, Wintermute’s plan to spend about $1 billion over five years on high-frequency trading and AI data center infrastructure, and Tencent’s second-quarter results showing higher capital expenditure tied to AI spending. In digital assets, Harmony said it had traced fraudulently minted tokens across 409 wallets and was considering a rollback, while Solana briefly came close to a network-freeze threshold after a data center routing issue knocked nearly 29% of staked SOL offline. Anchorpoint also began the first phase of distributing its Hong Kong dollar stablecoin HKDAP, and Coinbase said it will suspend 10 perpetual contracts on Aug. 26. Whale activity remained active as well, including an Ethereum ICO participant moving 2,000 ETH to Coinbase, a wallet sending 2,300 BTC to Wintermute-linked deposit addresses since June 25, and a leveraged ETH trader closing out positions for a reported $4.3 million profit. The period also brought new product releases from Grok and DeepSeek, a major SEC no-action letter tied to Franklin Templeton’s BENJI fund, and fresh scrutiny of prediction markets from U.S. regulators and New York City lawmakers.