Weekly Recap: Kanye West’s YZY Token Turmoil, China’s Stablecoin Pivot

The LayerZero/Wormhole Bidding War Shows How to Value a Crypto Business

LayerZero had bid to acquire cross-chain Stargate, when Wormhole threw a wrench into the situation by saying it would counter. Here’s how the first onchain bidding war could go down.

The drama is heating up in crypto M&A. LayerZero, the omnichain interoperability protocol, shocked the market with a $110 million bid to acquire Stargate DAO — the very bridge it originally launched. Then Wormhole jumped in, asking the DAO to pause the vote so it could make a counter-offer.

This episode unpacks the first-ever so-called onchain bidding war: how to value DAOs like real businesses, why LayerZero and Wormhole are fighting over Stargate, and whether this deal marks the beginning of a consolidation wave across crypto.

Guests David Nage of Arca and M&A advisor Lawson Bae of Relayzero break down the numbers, the strategy, and what this turning point means for the industry.

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

Now, let’s get into this week’s news! In today’s edition:

• 🎤 Kanye’s YZY token crashes with LIBRA link traced

• 🇨🇳 China considers yuan-backed stablecoins in policy shift

• 📊 Gemini files for Nasdaq IPO as Winklevosses boost Trump PAC

• 💵 Bullish completes $1.15B IPO fully in stablecoins

• 🏔️ Wyoming debuts first U.S. state-issued stablecoin

• 🤖 Story Protocol co-founder exits for AI startup

• 🏛️ Tether hires former White House crypto adviser

• 🛡️ Treasury seeks public comment on crypto illicit finance

• 🚨 Binance, Coinbase join Beacon Network to fight crime

• ⚡ SoFi adopts Bitcoin Lightning Network for remittances

• 🐶 Qubic community targets Dogecoin after Monero attack

Rapper Kanye West’s  YZY Token Slumps on Insider Trading Concerns

Kanye West’s cryptocurrency experiment is unraveling quickly. 

The YZY token, also branded “Yeezy Money,” launched this week on the Solana blockchain with a meteoric rise — surging 881% in its first 10 minutes and briefly touching a $3 billion market cap. But the hype has since collapsed. The token now sits at just $87 million in value, more than 80% down from its highs.

Adding to the controversy, onchain analyst “dethective” linked a sniper wallet used during YZY’s launch to the same group of addresses behind last spring’s $21 million LIBRA token extraction scheme. In YZY’s case, the wallet secured $250,000 worth of tokens at just 20 cents each — far cheaper than most buyers — and flipped them for over $1 million in eight minutes. 

“We don’t know if it is Hayden. But we can be sure this is someone with clear inside info,” dethective said, referencing LIBRA facilitator Hayden Davis.

Meanwhile, blockchain tracker Lookonchain reported that Kanye West himself added $34 million in liquidity to YZY, setting price bands that would allow him to gradually sell into rallies while collecting fees.

China Weighs Yuan-Backed Stablecoins in Policy Reversal

China is considering the approval of yuan-backed stablecoins, signaling a sharp reversal from its 2021 ban on cryptocurrency trading and mining. According to Reuters, the State Council, which is China’s cabinet, will review a roadmap later this month that could authorize their use to promote the wider adoption of the yuan in global markets.

Hong Kong and Shanghai will be the “main cities to fast-track local implementation of this plan,” according to Reuters’ sources. China is establishing an international operation centre for the digital yuan in Shanghai, while Hong Kong recently enacted the Stablecoin Ordinance, which positions the territory as one of the first markets to regulate fiat-backed stablecoin issuers. Huang Yiping, an advisor to the People’s Bank of China, recently told local media that an offshore yuan stablecoin in Hong Kong is "a possibility.”

The effort aims to counter the dominance of dollar-pegged stablecoins, which account for most of the $280 billion global stablecoin market. The yuan represents just under 3% of global payments compared to the U.S. dollar’s dominance of 47%, according to payment platform SWIFT.

If approved, the plan would mark China’s most significant move yet toward using blockchain-based finance to support the yuan’s internationalization.

Gemini Files for Nasdaq IPO as Winklevoss Brothers Make Political Push

Crypto exchange Gemini filed an S-1 registration with the U.S. Securities and Exchange Commission to go public on the Nasdaq Global Select Market under the ticker GEMI. Gemini, which was founded in 2014 by twins Tyler and Cameron Winklevoss, has yet to disclose the number of shares or price range. Financial services firms Goldman Sachs, Citigroup, Morgan Stanley, and Cantor will lead the offering.

In the same week, the twins announced a donation of more than 188 bitcoins, valued at about $21 million, to the pro-Trump Digital Freedom Fund PAC. In the announcement, they make a push for various pieces of legislation including “a skinny market structure bill that is lean and mean” and a bitcoin and crypto bill of rights, which codifies the right to own, self-custody, and transact peer-to-peer (p2p) with bitcoin and crypto assets.

Tyler Winklevoss on X said, “The mission of the @FreedomFundPAC is to help realize President Trump’s vision of making America the crypto capital of the world.”

Bullish Settles $1.15 Billion IPO Entirely in Stablecoins

In a first for U.S. capital markets, crypto exchange Bullish settled its $1.15 billion initial public offering entirely in stablecoins. The listing, which closed Aug. 14 and debuted on the New York Stock Exchange, marks the first time a U.S. IPO has been funded without traditional cash.

The transaction was managed by investment bank Jefferies, which oversaw the minting, conversion, and delivery of tokens across multiple blockchains, primarily Solana. Most of the proceeds were settled in Circle’s USDC and custodied by Coinbase. Other stablecoins used included PayPal’s PYUSD, Ripple’s RLUSD, World Liberty’s USD1 as well as euro-pegged tokens from Circle, Societe Generale, and AllUnity.

Bullish’s chief financial officer David Bonanno said in a statement, “We view stablecoins as one of the most transformative and widespread use cases for digital assets. Internally, we leverage them for rapid and secure global fund transfers, especially on the Solana network.”

Wyoming Launches First State-Issued Stablecoin

Wyoming has become the first U.S. state to issue its own stablecoin, unveiling the Frontier Stable Token, or FRNT. The dollar-pegged token is backed by U.S. cash and short-term Treasuries, with an additional 2% over-collateralization. Custody and reserve management are handled by Franklin Advisers, with monthly attestations from The Network Firm, which is a crypto accounting firm.

FRNT launched this week across seven blockchains, including Ethereum, Solana, and Base. Issuance and interoperability are supported by LayerZero, while Kraken and crypto card platform Rain will be among the first platforms to offer the token to the public.

The rollout follows passage of the GENIUS Act, the first federal law regulating stablecoins, but exempts state issuers from direct federal oversight.

Goldman Sachs projected, in a report released on Wednesday, that the stablecoin market could swell into the trillions, with Circle’s USDC alone potentially adding $77 billion by 2027 as new U.S. laws fuel adoption.

Story Protocol Co-founder Departs for New AI Venture

Jason Zhao, co-founder of blockchain startup Story Protocol, has stepped down from his full-time role just six months after the launch of its native token, IP. 

Zhao will remain involved as a strategic advisor while shifting focus to his new artificial intelligence company, Poseidon. 

The move has fueled criticism within the crypto community. “Another L1 founder exit[s] after producing absolutely nothing and making a lot of money in the process,” said EthHub co-founder Anthony Sassano on X. Adam Cochran of Cinneamhain Ventures added, “It’s so disheartening that even the top VCs just seem stuck on this loop of rewarding flash over substance.”

Story Protocol has raised about $143 million, with a valuation of around $2.25 billion as of its latest funding round led by a16z,  though blockchain data shows minimal fee revenue to date.

Tether Hires Former White House Crypto Advisor for U.S. Expansion

Tether has appointed Bo Hines, the former head of President Donald Trump’s digital assets advisory council, as a strategic advisor to guide its U.S. expansion. The move comes just weeks after Hines stepped down from his White House role.

“Bo’s appointment demonstrates our commitment to building a strong U.S.-based presence,” said Tether’s CEO Paolo Ardoino, noting the company’s focus on both digital assets and domestic infrastructure investments in a statement.

Alex Kruger, trader and co-host of Unchained’s Bits + Bips, wrote on X, “Tether is now king. The world is drooling about it. They are everywhere and even hire talent straight out of the White House.”

Tether plans to launch a U.S.-focused stablecoin later this year.

Treasury Department Opens Public Comment on Crypto Illicit Finance

The U.S. Treasury Department is seeking public input on new methods to detect illicit activity involving digital assets as part of the rollout of the recently signed into law GENIUS Act. The law, enacted in July, created the first federal regulatory framework for stablecoins, requiring issuers to hold full reserves, undergo annual audits if valued over $50 billion, and comply with new licensing rules.

The Treasury’s request highlights potential tools such as artificial intelligence, digital identity verification, and blockchain-based monitoring. Treasury Secretary Scott Bessent said on X, “Stablecoins will expand dollar access for billions across the globe and lead to a surge in demand for U.S. Treasuries, which back stablecoins.”

Comments are due by Oct. 17 and will inform future reports to Congress that could lead to additional rulemaking.

Beacon Network Unites Industry to Combat Crypto Crime

A coalition of major crypto firms and law enforcement has launched the Beacon Network, a real-time system designed to stop illicit funds before they can be cashed out. The initiative, led by blockchain intelligence firm TRM Labs, includes industry titans, such as Binance, Coinbase, PayPal, and more than a dozen others, as well as global security researchers and federal agencies.

The platform provides four core services: flagging suspicious addresses, propagating those alerts across the network, notifying exchanges instantly when suspect funds arrive, and enabling rapid reviews to freeze deposits before withdrawal. Membership is free for verified exchanges and law enforcement.

Coinbase’s head of anti-money laundering Valerie-Leila Jaber said, “There’s no program like Beacon Network,” while noting that access to real-time intelligence is a “game changer.” Kraken’s chief compliance officer CJ Rinaldi added that “protecting consumers requires seamless collaboration across industry and law enforcement.”

TRM Labs estimates that since 2023, more than $47 billion in cryptocurrency has flowed to fraud-related addresses.

SoFi Integrates Bitcoin Lightning Network for Remittances

SoFi Technologies is set to become the first U.S. bank to offer international remittances using Bitcoin’s Lightning Network. The Nasdaq-listed fintech-forward bank announced a partnership with Lightspark, the Bitcoin infrastructure company founded by former PayPal and Meta executive David Marcus, to power real-time, low-cost transfers through its app.

The service will launch with support for remittances to Mexico, with additional countries planned. Customers will be able to send U.S. dollars directly from SoFi’s app, while recipients receive local currency deposits abroad. Transfers will show upfront exchange rates and fees, aiming to address common frustrations in traditional remittance services.

The rollout marks SoFi’s return to crypto services after suspending them in 2023 during its transition to a national bank.

Qubic Community Eyes Dogecoin After Monero Attack

The group behind last week’s 51% takeover of the Monero blockchain has voted to make Dogecoin its next target. The Qubic network, an AI-focused blockchain project founded by Sergey Ivancheglo, revealed that more than 300 members chose Dogecoin in a community poll, far outpacing votes for Kaspa and Zcash.

Qubic recently gained majority control of Monero’s hashrate, successfully reorganizing six blocks in what it described as an “economic attack.” Following the incident, Kraken suspended Monero deposits, citing risks to network integrity.

Dogecoin, with a market value above $35 billion, currently operates at about 2.23 petahashes per second, a fraction of Bitcoin’s 964 exahashes and is what makes the network more susceptible to 51% attacks. Since 2014, Dogecoin has shared security through merged mining with Litecoin. “Litecoiners support Dogecoin. Always have, always will,” the Litecoin community posted on X, affirming its backing amid the new security concerns.

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