Arthur Hayes: FLOP airdrop will depend on testnet activity, with testnet faucets accessible via DID keys.

Brent Kovar, a businessman from Las Vegas, Nevada, was found by a federal jury to have operated a cryptocurrency Ponzi scheme that defrauded at least 400 investors of roughly $24 million. Kovar was convicted on 11 counts of wire fraud, 2 counts of mail fraud, and 2 counts of money laundering. His sentencing is scheduled for November 30, with a maximum statutory penalty of up to 280 years. Kovar previously ran Profit Connect with his mother, Joy Kovar. From late 2017 to July 2021, the pair lured investors under the pretense of blockchain mining and other business activities, claiming to own an AI-powered "supercomputer" that could generate fixed annual returns of 20% to 30%, compounded monthly. The U.S. Department of Justice stated that Kovar actually used investor funds to pay Ponzi-like returns to other investors, transferred millions of dollars to his mother’s personal bank account, and used investment money to buy gifts and personal real estate. The U.S. Securities and Exchange Commission (SEC) filed fraud charges against Kovar and his mother as early as 2021, accusing them of illegally raising around $12 million from at least 277 investors. The federal criminal case has now expanded the total amount involved to approximately $24 million.

Grayscale’s Zcash spot ETF has officially listed on the New York Stock Exchange Arca under the ticker symbol ZCSH, becoming the world’s first exchange-traded product offering spot exposure to Zcash (ZEC). The product was formerly the Grayscale Zcash Trust, established as a private placement back in October 2017. Grayscale stated that ZCSH is designed to meet investor demand for exposure to crypto assets beyond Bitcoin and Ethereum via traditional brokerage accounts. Grayscale’s head of index business, Steve Vanourny, noted that Zcash boasts nearly a decade of network history, a fixed maximum supply of 21 million coins, and a proof-of-work (PoW) consensus mechanism, plus optional privacy features not available on Bitcoin. The firm positions ZCSH as a high-risk satellite allocation in digital asset portfolios. Notably, as ZCSH launches, a critical privacy system vulnerability previously disclosed for Zcash remains a key market focus. In May this year, researchers discovered an exploitable vulnerability in Zcash’s Orchard privacy pool, which could theoretically allow attackers to mint fake ZEC. Zcash subsequently rolled out an emergency patch in June and activated the Ironwood upgrade in July to replace the vulnerable Orchard privacy pool, while implementing new supply accounting rules to limit potential fake ZEC from entering circulation. Grayscale said it will prioritize monitoring the adoption of the Ironwood upgrade, network security, exchange support, and regulatory policies for privacy assets moving forward.

The IPFS maintenance team Shipyard announced that its engineering, maintenance, and infrastructure operations will end on September 30, as Protocol Labs failed to renew its funding support. Shipyard stated that multiple IPFS projects—including Kubo, Helia, Boxo, Rainbow, IPFS Desktop, and IPFS Companion—will lose dedicated maintenance teams by that date, while public infrastructure such as ipfs.io, dweb.link, delegated-ipfs.dev, and IPFS bootstrap nodes will also cease to be operated by Shipyard. The relevant domains and infrastructure are owned by Protocol Labs, with future arrangements to be determined by the firm. Shipyard emphasized that the IPFS protocol itself will not stop running, but the team’s exit means multiple core implementations and public services will lose full-time maintenance unless other developers or organizations step in. Molly Mackinlay, Engineering and Research Lead at Protocol Labs, noted that IPFS will shift to a more lightweight governance model going forward: it will provide grants to individual maintainers via the IPFS Foundation, while continuing to advance the development of decentralized public infrastructure. Founded in 2024, Shipyard is composed of a group of senior IPFS developers who previously worked at Protocol Labs.

The X account "Leopold Aschenbrenner Stock Tracker" published a post questioning the risk management philosophy of AI investor Leopold Aschenbrenner. The account noted that Aschenbrenner had previously stated his "primary task is to avoid liquidation", implying survival should take priority over returns. However, his fund incurred major losses during July’s market crash while using approximately 400% leverage, creating a clear contradiction between his stated philosophy and actions. The account argued that accurately judging long-term trends in the AI sector does not equate to being able to survive trend volatility. In investment management, position sizing and leverage levels are the true benchmarks for testing risk management philosophy, rather than a manager’s public statements. It further stated that many fund managers who ultimately suffered major losses also previously grasped the "survival first" principle, but the real challenge lies in implementing this principle amid the allure of high returns and market pressure. For Aschenbrenner, his earlier judgment on AI trends may have been correct, but his fund’s high-leverage operations indicate he has not truly resolved risk control issues.

Former X product lead Nikita Bier responded today to claims he "restricted Crypto Twitter exposure," stating that during his tenure, he launched the Cashtags feature—allowing direct display of Solana and Ethereum price charts in posts—and revealed a crypto trading button is coming soon. Bier noted users can already paste contract addresses of newly issued tokens directly into X posts; once the trading button launches, users will be able to buy and sell tokens directly within posts without switching to other trading platforms. Specific launch timelines, supported assets, and trading partners have not been disclosed yet. Regarding the recent crypto market rally, Bier attributes it primarily to expectations of a weaker U.S. dollar, triggered by the U.S. Treasury expanding its scale of long-term U.S. Treasury repurchase operations. The U.S. Treasury previously announced it would raise the size of some long-term Treasury repurchase operations to at least $4 billion, a move that has sparked market discussions about pressure on the U.S. dollar.

UBS’s latest report shows that its market vulnerability monitoring tool, the Turbu-lens index, rose to the maximum alert level of 1.0 on August 19, hitting its highest point since the end of 2024. The indicator integrates around 100 data points including high-yield corporate CDS, G10 currency volatility, and S&P 500 CTA positions to assess potential market crash risks. Maxwell Grinacoff, head of U.S. equity derivatives research at UBS, and his team noted that historical data shows markets often face sharp volatility after the index hits 1.0. The two key risk events for the current market are the September Federal Open Market Committee (FOMC) interest rate meeting and the November U.S. midterm elections; the options market expects the S&P 500’s daily volatility to reach around 1% around these events. UBS believes that while current market vulnerability is at extreme levels, the specific factors triggering sharp market volatility remain unclear, and investors should closely monitor changes in Federal Reserve policy and U.S. political developments. Previously, after the index hit its peak at the end of 2024, the VIX saw successive significant increases.