The Crypto Basic

India has put 10.25 billion rupees ($107 million) of corporate debt onto its new tokenisation infrastructure, with three companies completing issuances as securities regulators and the central bank test a model that pairs distributed-ledger bonds with wholesale central bank digital currency.

The pilot, called Demat 2.0, is being run by the Securities and Exchange Board of India and the Reserve Bank of India. SEBI disclosed details of the initiative on Thursday.

REC, a state-owned lender, was the first to use the framework, raising 5 billion rupees from 18 investors in a Monday transaction. Two additional deals followed on Wednesday: Larsen & Toubro, the engineering group, raised 5 billion rupees from four investors, while IIFL, a non-bank financial company, sold 250 million rupees of bonds to one investor.

Three-Issuer Launch Goes Beyond Earlier REC Proposal

The scale of the first phase exceeds what had been reported in August. Reuters had said at the time that the planned test would involve selected investors and an REC offering valued at under 5 billion rupees. With L&T and IIFL also participating, the combined issuance is more than double the amount initially anticipated for REC.

More primary issuances are still being conducted under this opening stage, according to SEBI. Plans for subsequent phases include bringing the securities onto existing request-for-quote venues for secondary transactions and eventually allowing retail participation. SEBI said lessons from the trial would help determine how broadly to deploy the framework.

Notably, participation does not require investors to establish another securities account or repeat the Know-Your-Customer process. Tokenised bonds can be accommodated within an investor’s current Demat account. For transactions under the pilot, however, Demat 2.0 requires activation with the relevant depository, while the cash side requires a wholesale CBDC wallet maintained with a participating bank.

Distributed Ledger Links Bond Ownership With RBI Digital Currency

Demat 2.0 changes how the securities are represented and settled. Corporate bonds are generated as digital tokens on a distributed ledger operated by India’s statutory depositories. The payment side is connected to the RBI’s wholesale CBDC through the central bank’s Unified Market Interface.

That setup supports atomic settlement, which removes the time lag between money and securities transfers, SEBI said. It also shortens the funding timetable for issuers: proceeds can arrive on the bidding day instead of two to three days afterward. Smart contracts can automate interest distributions and bond redemptions.

The move to tokenisation does not modify the bonds’ legal standing, repayment responsibilities or protections available to investors, according to the regulator.

SEBI said the arrangement makes India the first country where corporate bonds originate natively on a distributed ledger, statutory depositories retain the ownership records, and CBDCs handle settlement, all within the existing regulated market infrastructure.

Sam Bankman-Fried is seeking relief from the U.S. Supreme Court, asking it to reverse a fraud conviction and eliminate an $11 billion forfeiture, arguing jurors received an incomplete picture of whether FTX customers ultimately lost money.

The FTX founder is serving 25 years in prison. A jury convicted him on seven fraud, money-laundering, and conspiracy counts over a multibillion-dollar scheme involving the misuse of customer funds and deception of the crypto exchange’s investors and lenders.

Bankman-Fried Contests Limits on Defense Evidence 

A central issue in Bankman-Fried’s petition concerns what his lawyers were permitted to show jurors about the finances of FTX and Alameda Research. His defense maintains that the two businesses had assets sufficient to cover their obligations despite a temporary shortage of readily available funds.

The petition says the asset pool was large enough to make customers whole and points to their subsequent repayment with substantial interest.

Bankman-Fried argues that the handling of evidence at trial created an imbalance: prosecutors could put forward information indicating substantial customer losses, while his lawyers could not counter with evidence that customers would recover their money.

That dispute underpins one of the legal questions now presented to the Supreme Court. Bankman-Fried wants the justices to address the role of evidence about actual losses when prosecutors pursue fraud under a fraudulent-inducement theory that does not require victims to have suffered a financial loss. His petition argues that the court should not have allowed the government to introduce evidence of losses.

The filing separately attacks the $11 billion forfeiture as incompatible with the Eighth Amendment’s ban on excessive fines.

Kousisis Precedent Weighed Against Bankman-Fried

Bankman-Fried sought Supreme Court review after a three-judge panel of the U.S. Court of Appeals for the Second Circuit rejected his challenge to the conviction in June. 

The appeals court relied on Kousisis v. United States, a 2025 Supreme Court decision addressing wire fraud. Under that ruling, liability does not require an intention to leave the victim economically worse off overall.

That interpretation defeated Bankman-Fried’s argument based on the absence of net financial harm.

According to CNN, the Supreme Court is expected to decide later this year whether to accept the case.

A new Senate Republican draft of the CLARITY Act would require some centrally controlled crypto trading protocols to register with the Commodity Futures Trading Commission, introducing a new regulatory requirement ahead of the bill’s first procedural vote on Sept. 15.

The 630-page revision was released Thursday by Sen. Cynthia Lummis and fellow Republicans. The Senate has spent the past year trying to advance legislation that would establish federal regulation of the cryptocurrency industry for the first time.

Lummis said Republicans accepted more than 114 provisions sought by Democratic colleagues during negotiations. She argued the legislation would give the crypto sector rules that could remain in place across presidential administrations, unlike regulations that can shift with control of the White House.

DeFi Changes Draw A Line Around Protocol Control

Under the revised approach, a protocol could fall into the bill’s “non-decentralized finance” category when an individual or coordinated group has authority, exercised either directly or indirectly through an agreement, relationship, or other arrangement, to oversee its functionality or make material changes to its operations or rules governing consensus.

Entities covered by that classification would be subject to CFTC registration. The legislation also directs the CFTC, together with Treasury, to issue regulations to implement the provision. A crypto industry source said Democrats sought to include the new section.

Another revision limits the relevant DeFi provisions to “spot and cash” transactions involving digital commodities. According to Lummis, that restriction responds to tribal governments’ concerns about the legislation’s potential impact on prediction markets.

Meanwhile, Lummis said the draft includes changes that clarify rules for credit unions engaging in cryptocurrency activities.

The revisions come as lawmakers face a narrowing window to advance the broader legislation after returning to Washington. The bill’s route to President Donald Trump’s desk has already been complicated by disagreements between banks and the crypto industry over stablecoin rewards, concerns surrounding illicit finance and an unresolved ethics dispute.

Trump-Linked Crypto Wealth Remains Part of Ethics Fight

That dispute centers on how the legislation should address Trump’s growing cryptocurrency wealth, including hundreds of millions of dollars tied to World Liberty Financial and the TRUMP memecoin.

In July, Trump accepted an ethics measure that would prevent government officials, public employees and their spouses from sponsoring or issuing digital assets. The Justice Department would oversee enforcement of the restriction, not state attorneys general. It is scheduled to lapse at the beginning of January 2029.

Democrats said those protections were inadequate and later put forward different ethics language alongside Republican Sen. Thom Tillis.

The latest draft leaves the ethics section largely unchanged. Politico reported that the revised measure currently lacks Democratic backing, which is crucial for the legislation to pass.

Lummis has repeatedly used X to press for passage as she approaches the end of her Senate career. She is not seeking another term and is due to leave Congress in January 2027. 

In a Wednesday post, Lummis said the passage would allow the United States to shape its own crypto rules rather than watch jurisdictions such as Singapore or the United Arab Emirates (UAE) take the lead on regulation. She also invoked the country’s history of leadership in arguing that the U.S. should continue to lead.

Bitwise will wind down its spot Dogecoin ETF roughly 10 months after its debut, marking an early end to the fund after limited uptake.

The fund, BWOW, is expected to have its final NYSE trading session on Oct. 14, Bitwise said Thursday. Investors can dispose of shares in the secondary market until the market closes that day.

Any shares still outstanding will be settled in cash on Oct. 22. The payout will be calculated using its Oct. 21 net asset value, and remaining shareholders will not be required to take any action.

BWOW Closure Follows Weak Dogecoin ETF Uptake

Dogecoin ETFs have attracted substantially less trading than several other altcoin ETFs. Their cumulative volume stands at about $300 million, compared with $2.1 billion for Hyperliquid products, $1.5 billion for Zcash and $680 million for Chainlink.

Net flows have also remained limited. Dogecoin ETFs brought in about $318,000 last month, according to SoSoValue, enough to reverse the small net outflows recorded in July.

BWOW’s strongest daily trading volume was about $3 million during its launch week.

The broader category dates to September 2025, when the first Dogecoin ETF debuted amid considerable hype over spot funds tied to the cryptocurrency.

Bitwise said it decided to liquidate BWOW as the company continues to optimize its product lineup to meet evolving investor needs.

Dogecoin Slips From Crypto’s Top 10

Bitwise’s decision also comes as Dogecoin has lost ground in the broader crypto market.

DOGE was priced at roughly $0.084 at the time of writing, corresponding to a market capitalization of about $13 billion. The token has fallen outside the top 10 largest cryptocurrencies over the past year amid the rise of HYPE and ZEC.

Despite the fund’s closure, Bitwise executives have previously spoken positively about Dogecoin’s staying power.

Bitwise CEO Hunter Horsley described Dogecoin last year as an asset that started as a joke before becoming an icon of the crypto movement. He said DOGE does not claim to transform global capital markets or present investors with fundamentals or utility.

Horsley also said that, despite those characteristics, Dogecoin had maintained its relevance and value longer than nearly anything else in crypto.