The U.S. Commodity Futures Trading Commission has opened an investigation into possible insider trading on prediction market platform Kalshi, adding a new regulatory flashpoint to a volatile day for digital assets, technology shares and geopolitical risk. The probe centers on allegations that a person with advance access to speech material for former President Donald Trump placed trades based on information not yet available to the public.
The case could become an important test for oversight of prediction markets, which allow users to trade contracts tied to political, economic and real-world events. According to the allegations, the person under scrutiny was involved in operating Trump’s teleprompter and may have used early access to prepared remarks to make wagers before the speech content became public.
The CFTC’s investigation comes as prediction markets draw growing attention from regulators, political observers and traders. These platforms have expanded rapidly by offering contracts on elections, policy decisions, court outcomes, economic data and other public events. The Kalshi inquiry points to a central concern for regulators: whether users with privileged access to sensitive information can profit unfairly before the wider market has the same knowledge.
The investigation has not yet resulted in public charges. Kalshi and the individual reportedly involved have not been accused in court filings cited in the initial reports. Still, the probe signals that federal regulators are paying closer attention to whether prediction-market activity should be treated with standards similar to those applied in securities and commodities markets, where misuse of nonpublic information is a major enforcement priority.
Senate rejects leniency for Sam Bankman-Fried
In a separate development, the U.S. Senate unanimously passed a nonbinding resolution opposing any clemency, pardon or sentence reduction for former FTX chief Sam Bankman-Fried, who was convicted in 2023 on seven criminal charges tied to the collapse of the cryptocurrency exchange.
The resolution does not carry the force of law, but it sends a clear political message that lawmakers do not support early relief for Bankman-Fried. He is currently expected to be released around 2044, based on the existing sentence and projected time calculations.
Former President Donald Trump has previously said he does not intend to grant Bankman-Fried a pardon. The Senate’s unanimous vote reinforces the view among lawmakers that the FTX case remains one of the most significant fraud cases in the history of the digital-asset industry.
Bankman-Fried’s conviction followed the collapse of FTX in 2022, an event that caused major losses for customers and shook confidence across the digital-asset market. The company’s downfall also accelerated calls for stronger oversight of cryptocurrency platforms, customer-asset protections and clearer rules for digital finance.
Digital assets fall as risk appetite weakens
Major digital tokens declined as traders reduced risk exposure during a session marked by geopolitical uncertainty, pressure on technology shares and a move toward safer assets. The total value of all digital assets fell to about $2.28 trillion as selling spread across large-cap tokens and more speculative corners of the market.
Bitcoin gave back earlier gains and traded near $64,087 by late evening. The move reflected a broader pullback in risk assets, with traders shifting money toward safer government bonds amid reports of U.S. airstrikes in southern Iran. Higher yields on those bonds also reduced the appeal of assets that do not generate income, including Bitcoin and other digital tokens.
The sell-off triggered forced closures across derivatives markets. Trading platforms recorded roughly $411 million in futures liquidations over the past day, with long positions accounting for most of the losses. That pattern showed that many traders had been positioned for further upside before the market reversed.
Among the most actively traded tokens, BNB fell 1.42%, Bitcoin declined 1.46%, Ethereum lost 3.02%, Solana dropped 2.86%, XRP slid 2.38%, TREE eased 0.23% and Tron declined 0.37%. Zcash recorded one of the sharpest losses, falling 6.82%, while LUMIA stood out with a 20.33% gain.
The day’s strongest performers included POR, which rose 32.51%, ARG, up 23.08%, LRC, up 15.33%, DGB, up 14.14%, and MENGO, up 12.69%. In equity-token markets, SQQQ.M gained 6.16%, AVAV.M rose 5.56% and ETHD.M added 5.33%.
The contrast between broad declines and sharp gains in smaller tokens showed that trading remained active, but selective. In stressed markets, liquidity often narrows, and price moves in smaller assets can become exaggerated in both directions. Traders looking for short-term opportunities continued to move quickly between tokens, while larger assets tracked the broader risk-off tone.
Geopolitical tension weighs on markets
Reports of U.S. airstrikes in southern Iran added to pressure across risk-sensitive markets. Local sources reported attacks on communication facilities, airports and rail networks, with several casualties and power outages. The reports could not be independently verified in full from the information provided, but they were enough to weigh on sentiment across global markets.
Geopolitical shocks often affect digital assets in different ways. Bitcoin is sometimes described by its supporters as a hedge against political instability, but during sudden military escalation, it frequently trades more like a speculative risk asset. In those moments, traders often raise cash, buy short-term government debt or reduce leveraged positions.
That pattern was visible in the latest session. The forced closure of futures contracts indicated that leveraged traders were caught by the speed of the decline. When prices break below short-term support levels, automatic liquidation systems can accelerate losses, creating a feedback loop of selling.
Market participants are now watching whether Bitcoin can hold important support zones over the next several weeks. A break below those levels could deepen the pullback, while renewed inflows into spot funds or a calming of geopolitical risks could help stabilize prices.
U.S. technology shares retreat
The pressure was not limited to digital assets. U.S.-listed technology shares also moved lower, with storage and semiconductor-related names among the weakest performers. SK Hynix fell 6.58%, Micron dropped 3.16% and SanDisk lost 4.27%.
NVIDIA, TSMC and AMD also slipped during the session. The declines reflected a broader pullback in high-growth technology shares, which have been sensitive to interest-rate expectations, chip-demand forecasts and concerns about whether the artificial-intelligence trade has become crowded.
UnitedHealth was a notable exception, rising 8% after raising its annual outlook. The gain showed that traders were still willing to reward companies offering stronger earnings visibility, even as wider market conditions turned defensive.
The weakness in technology shares mattered for digital assets because both markets often draw from the same pool of risk capital. When traders reduce exposure to fast-growing technology companies, they often cut positions in cryptocurrencies and tokenized products as well. That correlation has become especially visible during periods of rising yields or heightened global uncertainty.
Visa launches stablecoin platform
In corporate news, Visa introduced an enterprise-grade stablecoin platform designed for financial institutions and merchants. The company said the system is intended to support stablecoin payments across existing financial networks and will be available to about 15,000 financial institutions and more than 200 million merchants.
The platform supports OUSD, USDC and USDG. By adding stablecoin services, Visa is positioning itself for a future in which tokenized dollars move more directly through payment networks, settlement systems and merchant services.
The move is significant because stablecoins have become one of the most widely used areas of digital finance. Unlike volatile cryptocurrencies, stablecoins are designed to maintain a fixed value, usually against the U.S. dollar. They are used for trading, cross-border payments, treasury management and settlement between platforms.
Visa’s entry also reflects a wider shift among large payment companies. Rather than treating public blockchains as competitors, major payment networks are increasingly exploring ways to integrate blockchain-based settlement into their own infrastructure. If adopted at scale, stablecoin payment rails could reduce settlement times and improve cross-border transaction efficiency.
Still, the growth of stablecoins remains closely tied to regulation. Policymakers continue to debate reserve requirements, issuer oversight, consumer protections and the role of banks in tokenized dollar markets. Visa’s platform will likely draw attention from regulators because of its potential reach across banks, merchants and global payment corridors.
Crypto.com, Fireworks AI and other companies raise capital
Financing activity remained strong across digital assets, artificial intelligence and energy infrastructure, even as public markets weakened.
Crypto.com secured $400 million from Citadel Securities, reaching a valuation of $20 billion. The company plans to use the capital to expand tokenized securities and derivatives products. The deal comes as more financial firms explore tokenization, which refers to issuing traditional assets such as equities, bonds or fund shares on blockchain-based systems.
In the artificial-intelligence sector, Fireworks AI closed a $1.5 billion funding round led by Index Ventures, giving the company a valuation of $17.5 billion. The size of the round shows that private-market demand for AI infrastructure remains strong despite concerns about high valuations in public technology shares.
Prediction platform Pascal raised $900 million in a Series A round led by USV. The financing highlights continued interest in prediction markets and event-based trading, even as regulators examine market integrity questions in the sector.
Bloom Energy received $1.7 billion in project funding with participation from IDF and Oaktree. The deal adds to rising interest in power, grid and energy infrastructure, especially as artificial-intelligence data centers increase electricity demand.
AI-powered food delivery startup Wonder raised $650 million, reaching a $9 billion valuation. The company has been expanding in food logistics, automation and delivery infrastructure.
Venture firm a16z also backed Runta, an AI agent safety company focused on infrastructure for identity and risk management in autonomous systems. The funding reflects growing concern about how AI agents verify identity, execute tasks and manage risk when operating with limited human direction.
Traditional finance turns toward open blockchain systems
Comments from major financial and technology figures added to the day’s broader theme: traditional finance and large technology companies are moving deeper into digital infrastructure, even as markets remain volatile.
JPMorgan analysts cited Strategy’s decision to raise its cash reserves from $2.55 billion to $3 billion, along with inflows into Bitcoin futures, as positive factors for market liquidity. The added cash reserves may give the company more flexibility, while futures inflows can point to renewed institutional activity in Bitcoin-linked products.
ARK Invest’s Valente said traditional finance is more likely to build on open DeFi infrastructure than private blockchain systems. That view reflects a growing debate over whether financial institutions will prefer permissioned networks controlled by a small group of institutions or public systems that allow broader access and composability.
NVIDIA’s Jensen Huang said the current industry cycle remains in its early stage. His remarks come as traders continue to debate how long the AI-driven technology boom can last and whether demand for chips, data centers and software infrastructure can justify current valuations.
BlackRock’s Larry Fink has also pointed to greater stability in Bitcoin markets as large asset managers build positions through regulated products. His firm now holds 733,000 units of the top cryptocurrency, according to the figures cited. Large-scale holdings by major asset managers have helped deepen market liquidity, though they have not prevented short-term volatility.
Traders prepare for more volatility
The coming weeks could remain difficult for digital-asset traders. Geopolitical tensions, bond-yield moves, regulatory scrutiny and leveraged positioning are all contributing to unstable conditions.
For active traders, the immediate focus is on whether forced selling continues and whether fresh cash enters spot funds. In past cycles, inflows into regulated spot products have helped absorb selling pressure. When those flows slow, prices can become more vulnerable to sharp declines.
Strict stop limits and position sizing are becoming more important as volatility rises. The latest liquidation data showed how quickly long positions can be wiped out when markets move against crowded trades. Traders using leverage face the highest risk during sudden geopolitical shocks or fast changes in interest-rate expectations.
Attention is also turning to upcoming price-growth data from bank officials at the start of next month. Inflation readings could influence rate expectations, bond yields and demand for risk assets. If yields remain high, cryptocurrencies may struggle to attract broad buying interest. If inflation cools and rate expectations ease, digital assets could regain support.
For now, the market is balancing two opposing forces. On one side, regulatory pressure, geopolitical risk and higher yields are pushing traders toward caution. On the other, large payment companies, asset managers and technology firms are continuing to build digital-asset infrastructure. That long-term development may support the sector, but in the near term, price action remains vulnerable to sudden shocks.
As prediction markets face scrutiny, understand the broader landscape in this in-depth guide to future regulation.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
