Inside Crypto's Historic Crash: Root Causes and Second-Order Effects

Dear Harvard Business Review, if you’re looking for a case study in token-fueled M&A strategy, Ripple’s your subject.

Yesterday, the firm announced its $1 billion acquisition of GTreasury, a leading treasury management platform with over 1,000 enterprise clients globally. This follows Ripple’s recent acquisitions of prime broker Hidden Road and stablecoin platform Rail, which are turning the firm into a full-stack digital asset financial services platform.

As you’d expect, people inside Ripple tell us that integrating past acquisitions like Metaco has turned out to be quite a heavy lift. But if they pull it off, the upside could be significant (for Ripple Labs’ equity holders, of course).

Today, we’ll also talk about:

• Crypto firms are rushing to obtain OCC charters
• Inside the historic market crash: root causes and consequences
• Daylight secures $75 million for decentralized energy network

HIGH SIGNAL NEWS

• Stripe introduces recurring stablecoin payments. It allows customers to use their crypto wallets to pay for subscriptions without needing to sign each transaction.💸
• CME expands crypto offering. On Monday, the leading U.S. derivatives exchange launched CFTC-regulated options on SOL and XRP, marking the first products of this kind.🏦
• MetaMask integrates Polymarket. The integration will go live later this year and will allow users to trade on the leading U.S. prediction market directly through their MetaMask wallet.🦊
• Ethereum researchers celebrate major breakthrough. Pico Prism, a zkVM for real-time proving of Ethereum blocks, managed to prove 99.6% of Ethereum blocks in under 12 seconds, marking a major step toward scaling Ethereum by a factor of 100 and making network validation from a phone more feasible in the future.🥂

CRYPTO REGULATION

Crypto and Fintech Firms Are Rushing to Obtain OCC Charters

Tech goes bank: This week, U.S. banks got several new potential contenders:

• On Tuesday, Stripe’s stablecoin subsidiary Bridge announced that it had filed for a national trust bank charter with the Office of the Comptroller of the Currency (OCC).
• On Wednesday, Sony Bank’s subsidiary Connectia Trust followed suit, while Peter Thiel-backed Erebor Bank received conditional approval from the regulator.

Why it matters: The announcements reflect a broader trend. Since the U.S. House passed the GENIUS Act in July, major crypto and fintech firms — including Circle, BitGo, Ripple, and Paxos — have all submitted charter applications. Coinbase joined them just two weeks ago.

• First-mover: All of them are following the path of Anchorage Digital, the institutional crypto platform that already obtained its OCC charter in 2021, and has recently been promoting its whitelabel stablecoin solution as "fully GENIUS-compliant."

What it brings: At the core, the OCC charter comes with three main benefits for crypto firms:

• Federal oversight: The OCC charter provides a single federal framework that streamlines oversight and reduces dependency on state-by-state licenses, removing a central operational bottleneck that plagues many crypto companies today.
• Custody: While the GENIUS Act created a federal framework for stablecoin issuance, it separated issuing from holding the backing reserves. As a result, issuers need a banking charter to legally custody those assets.
• Bank-free transfers: Beyond granting custody rights, the charter makes firms eligible to apply for a Federal Reserve master account, a prerequisite for direct Fedwire access, which enables instant settlement without relying on commercial banks.

What they want: Taken together, the main benefit for crypto firms of having an OCC charter is the ability to bypass traditional banks. But while the benefits are shared, motivations may differ:

• Whitelabel solution: “Through this bank, we'll provide: custody, stablecoin issuance, management of stablecoin reserves, and more,” co-founder Zach Abrams wrote in his post announcing Bridge's application.
• Full-stack offering: In the case of Sony Bank, the charter is expected to be used "to issue U.S. dollar-pegged stablecoins, maintain the corresponding reserve assets, and provide custody and digital asset management services," a recent report says.
• Payment autonomy: “For players like Coinbase, which are not directly involved in stablecoin issuance themselves, access to Fedwire seems to be a key motivation for seeking a national trust charter,” Todd Phillips, assistant professor at the Robinson College of Business, told us.

Banking pushback: No wonder, then, that traditional banks are wary of being disintermediated. In July, the American Bankers Association sent a letter to the OCC urging the agency to pause its review of these applications pending a broader review of whether these applicants’ business plans align with the purpose of the national trust charter.

What’s next: Still, despite such resistance, the OCC seems to be taking a more open approach to new entrants. As Phillips noted: "Erebor Bank’s preliminary approval was much faster than I have ever seen a bank get provisional approval, and it shows that this OCC is interested in granting new charters. It’s a different ballgame than we’ve seen in the past."

Todd Phillips is an assistant professor of law in the Robinson College of Business at Georgia State University, specializing in banking and financial regulation.

The combination of a stablecoin issuer and a trust bank under one roof will transform what a “bank” can be. Until now, trust banks primarily acted as custodians, while payment accounts remained the domain of commercial banks. But under the GENIUS Act, that line is blurring. A stablecoin issuer with a trust charter could hold reserves, issue stablecoins with integrated payment functionality, and, perhaps, move money through Fedwire; all without becoming a commercial bank.

Assuming the OCC approves fintechs’ trust bank charters, and assuming the Federal Reserve grants them master accounts, the shift will be profound. Fintechs with trust charters won’t just compete for payments and deposits. What’s emerging is a new class of neobanks that will not need to rely on correspondent banks. They are purpose-built institutions that merge payment rails with asset custody and challenge incumbents on their home turf. Most incumbents are unprepared, and must adapt quickly.

CRYPTO MARKETS

Inside Crypto's Historic Crash: Root Causes and Second-Order Effects

Historic crash: Last Friday, the crypto markets witnessed their largest wipeout ever. The total crypto market cap shrank by $600 billion (15%) within hours, and at least $20 billion in positions were liquidated, affecting 1.6 million traders. The drawdown was larger than during the 2021 flash crash and the FTX collapse, both in relative and absolute terms.

• A classic risk-off event? While a tweet by U.S. President Donald Trump threatening new tariffs on China may have been the spark, the scale of the collapse was mostly driven by structural dynamics within crypto markets themselves.

Q&A: With the dust now settling, we break down the core causes, hidden mechanics, and longer-term consequences of a day that may reshape crypto market structure.

1) Why was this crash so severe?

2) How did market makers react, and why did that matter?

3) Why is everyone talking about Auto-Deleveraging (ADL)?

4) What about Ethena? Didn't USDe significantly lose its dollar-peg?

Adrian Fritz is the Global Head of Research at 21Shares, a leading crypto ETP issuer, which oversees over $10 billion in assets.

The selloff was not a macro event but a structural, crypto-specific one. That distinction matters: core bull-market drivers like rate cuts and liquidity expansion remain intact. What the event did reveal, however, is the growing divergence between DeFi and CeFi resilience.

CeFi, especially Binance, showed its weaknesses: trading halted, liquidity thinned, and capital fled BNB Chain. Meanwhile, DeFi fared better. Protocols such as Aave and Morpho processed record-high liquidation volumes without bad debt or major disruption. Hyperliquid stayed fully operational, although it also had to trigger ADL. Ethena processed about $2 billion in redemptions over a 24-hour period without issues. This is also why onchain activity even saw a rise post-crash. Stablecoin flows confirm this rotation.

The broader takeaway: this was an inflection point accelerating existing trends. Capital and trust are moving toward permissionless infrastructure that scales under stress. Binance’s role as a systemic anchor is weakening, while DeFi’s robustness positions it as the structural backbone of the next market cycle.

Daylight Energy | $75 million | Equity & Loan Round : Decentralized power company. (For a detailed explanation, see our Proof-of-Talk below).

Jito | $50 million | Strategic : Liquid staking and high-performance infrastructure provider on the Solana network.

Temple | $5 million | Seed : Trading platform on the privacy-focused Canton Network.

A conversation with Jason Badeaux, co-founder and CEO of Daylight Energy, a decentralized power company that announced a $75 million fundraise yesterday.

Disclaimer: The information provided in the Crypto Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.