Morgan Stanley Ethereum and Solana ETFs outperform rivals as second-day inflows reach $33 million
Morgan Stanley's newly launched Ethereum and Solana exchange-traded funds (ETFs), MSSE and MSOL, attracted a combined $33 million in net inflows on their second trading day. MSSE drew $14.03 million, surpassing BlackRock's leading Ethereum ETF, even as the overall US Ethereum ETF market experienced net outflows of about $19 million. MSOL captured all inflows into US Solana ETFs during the session, taking in $19.03 million despite being only two days old. Together, MSSE and MSOL now manage $20 million in assets. The funds carry a low expense ratio of 0.14%, which is competitive within their markets. Morgan Stanley's extensive distribution network includes approximately 16,000 financial advisers, a large wealth-management platform, and E*TRADE, providing access to both institutional and self-directed investors. The firm’s investment-management division oversees around $2 trillion in assets and employs over 1,300 investment professionals. These ETFs are structured to stake part of their holdings, distributing rewards generated through Ethereum and Solana's proof-of-stake mechanisms to shareholders. Morgan Stanley is leveraging its early success with a Bitcoin trust, which has accumulated about $400 million in assets since its launch earlier in 2024, to expand its crypto ETF offerings. The launch of these products reflects a broader trend among US asset managers to diversify beyond Bitcoin into Ethereum and other altcoins. Total net inflows into Ethereum ETFs since their launch stand at $11.19 billion, while MSOL competes in a market with eight other Solana funds holding approximately $842 million in combined assets.
Professional Law Enforcement Group Backs Crypto’s CLARITY Act, Adding Pressure Before August Recess
The CLARITY Act, a bill designed to establish a regulatory framework for the U.S. cryptocurrency market, has gained recent support from the Major Cities Chiefs Association, a nonprofit composed of police chiefs from major American cities. This group expressed satisfaction with the bill's approach to addressing financial crime. The legislation, which passed the House of Representatives last year with bipartisan backing, has faced delays throughout 2026 due to concerns raised by the banking lobby about stablecoin yields and calls for ethical improvements. An updated version of the bill was introduced last week, incorporating provisions that prohibit government officials and their families from issuing or promoting cryptocurrencies. Democratic Senator Catherine Cortez Masto, along with two law enforcement groups, proposed suggested changes to the bill, which they viewed positively. The latest draft includes a new title with additional law enforcement measures aimed at enhancing the investigation of financial crimes involving digital assets. The National Fraternal Order of Police also expressed support for the bill recently. Despite backing from major financial institutions, lawmakers, and companies, some Democrats have stated that the current form of the legislation remains insufficient. Lawmakers are aiming to pass the CLARITY Act before Congress adjourns for the August recess, with Republicans seeking to secure bipartisan support this week to advance the bill.
CLARITY Act wins police backing as odds fall to 30%
The Major Cities Chiefs Association (MCCA) has endorsed the latest version of the CLARITY Act, expressing support after revisions addressed prior concerns raised by police and prosecutors. This endorsement follows similar moves by other law enforcement groups, including the National Organization of Black Law Enforcement Executives and conditional support from the Federal Law Enforcement Officers Association, which requested stronger accountability rules for decentralized finance (DeFi). The National Fraternal Order of Police, representing over 382,000 officers, reversed its earlier opposition after reviewing changes to the Blockchain Regulatory Certainty Act provisions within the bill. Meanwhile, the Major County Sheriffs of America withdrew formal opposition but stopped short of endorsing the legislation, adopting a neutral stance while seeking a role for state and local agencies in Treasury studies and advisory panels. Earlier resistance from law enforcement focused on the bill's treatment of non-custodial crypto developers, fearing that broad exemptions could allow DeFi operators and mixers to evade registration and accountability, complicating efforts to trace illicit funds. The revised draft clarifies that developers may still face prosecution if they knowingly facilitate crimes, preserves existing criminal enforcement powers, and expands the role of state and local agencies. Despite these developments, Democrats led by Senator Catherine Cortez Masto and some prosecutors continue to seek further changes, particularly to narrow protections for some crypto service providers. Banks support federal crypto regulations but urge tighter restrictions on stablecoin rewards, concerned that exceptions allowing certain rewards could resemble interest payments. A coalition of banking officials has requested strengthening provisions that restrict stablecoin issuers from paying interest, highlighting the need for clearer rules to prevent misuse. Polymarket traders currently estimate a 30% chance of the bill becoming law in 2026.
Lightning Labs Launches Site for L402 Bitcoin Agent Payments
Lightning Labs has introduced a dedicated website for L402, a protocol enabling AI agents to make payments in bitcoin via the Lightning Network. The L402 protocol utilizes HTTP's 402 Payment Required status code, where a server responds to a client’s request for a gated endpoint with this status and a WWW-Authenticate header containing a token and a Lightning invoice. The token includes the payment hash of the invoice. Once the client settles the invoice, it submits the token along with the payment preimage to gain access to the endpoint. The server then verifies these without needing to query a payment database, a process Lightning Labs describes as stateless verification. L402 is designed for machine-to-machine commerce on Lightning, allowing agents to pay and authenticate natively without involving accounts, intermediaries, or humans. This protocol is already integrated within Lightning Loop, a non-custodial swap service for Bitcoin and Lightning, and is implemented through Aperture, which adheres to the L402 standard. The new website marks the launch of a dedicated platform for L402, not the protocol itself. This development coincides with other initiatives, such as Coinbase's x402 protocol on Ethereum-based rails, which has moved to the Linux Foundation with support from companies like Google, Stripe, and Visa. Visa has also released a command-line payment tool for AI agents. Unlike x402, L402 routes payments over Bitcoin's Lightning Network, positioning it as a rail for AI agents to transact in bitcoin.
US sanctions firms behind Iran’s Strait of Hormuz BTC insurance scheme
The United States Treasury's Office of Foreign Assets Control (OFAC) has imposed sanctions on two Iranian maritime companies, the Persian Gulf Marine Insurance Company and HormuzSafe Marine Services Authority. OFAC describes these firms as integral to the Islamic Revolutionary Guard Corps (IRGC) and involved in an extortion scheme. The sanctioned companies are connected to a Bitcoin-based insurance program known as "Hormuz Safe," which has been under development for several months. This program allows shipowners to pay for insurance using Bitcoin and other cryptocurrencies to secure safe passage through the Strait of Hormuz. Treasury Secretary Scott Bessent stated that Iran's economy is in freefall with inflation in the triple digits, and the regime is desperate for cash. He also emphasized that the United States will not permit Iran to use global commerce or international shipping to finance the IRGC's terrorism, aggression, and repression. Additionally, Babak Morteza Zanjani, described as a disgraced regime financier, promoted the insurance scheme on social media. Zanjani reportedly transferred $850 million through the Binance platform between 2024 and 2025, despite his account being flagged multiple times. The sanctions also target an Iranian shadow fleet of tankers accused of supplying Iran with millions of barrels of crude oil and petroleum products. The war in the region began in February 2026, and although a US memorandum of understanding was signed in June to peacefully reopen the Strait of Hormuz, military strikes resumed on July 13.
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