Researchers at Stanford University and Singapore Management University found that Polymarket’s five-minute Bitcoin prediction markets create incentives for traders to manipulate spot prices around settlement, allowing sophisticated participants to profit at the expense of retail traders.The study examined contracts in which traders bet on whether Bitcoin’s price would end above or below a predetermined level after five minutes. Because the contracts settle using Chainlink price feeds based on Bitcoin’s price at the end of each trading window, traders have an incentive to influence the spot market immediately before settlement.Analyzing trading activity before and after Polymarket introduced the contracts in July 2024, the researchers found sharp increases in Bitcoin spot-market order flow just before settlement, followed by rapid price reversals, which were consistent with settlement-price manipulation.The study estimated that the behavior transferred about $1.28 million from ordinary traders to manipulators during the sample period. The researchers said extending contract durations from five minutes to 15 minutes largely eliminated the effect.Related: SOL rallies as Solana memecoins, prediction market activity surge: Are bulls back?The researchers said the results do not indicate prediction markets are inherently vulnerable to manipulation, arguing instead that settlement design can reduce the risk. They pointed to longer settlement windows and alternative pricing methods, such as time-weighted average prices, as potential solutions.The findings could extend beyond crypto. The paper notes that traditional exchanges, including Nasdaq and Cboe, have proposed event contracts tied to asset prices, making contract design an increasingly important consideration as prediction markets expand into regulated financial markets. World Cup fuels prediction market growthPrediction markets posted record trading volumes in June as the expanded 2026 FIFA World Cup fueled activity across the sector. According to DefiLlama data, Kalshi processed about $9.4 billion in trading volume during the month, while Polymarket International handled roughly $4.3 billion.The platforms’ World Cup winner markets have since generated more than $5.4 billion in combined trading volume, with Polymarket processing about $4.25 billion and Kalshi about $1.2 billion, according to data from the two platforms at the time of writing.World Cup winner bets on Polymarket. Source: PolymarketThe sector’s growth has coincided with mounting legal scrutiny. Several US states have challenged companies, including Kalshi and Polymarket, this year, while the Commodity Futures Trading Commission has argued that federally regulated event contracts fall under its “exclusive jurisdiction” rather than state gambling laws. The dispute is now moving through the federal courts, and legal observers have said conflicting appellate rulings could eventually prompt the US Supreme Court to decide whether states or the CFTC have primary authority over prediction markets.Magazine: Strategy became a symbol of the dot-com crash: Could history repeat?

UK-based financial company Revolut has received approval from the Virtual Assets Regulatory Authority (VARA) of Dubai to offer crypto-related services in the United Arab Emirates (UAE).In a Wednesday notice, Revolut said that, following a green light from the Central Bank of the UAE for payment activities, VARA gave in-principle approval for the company to offer broker-dealer, management and investment, and exchange services in the UAE. The company said its services via the app and the Revolut X exchange would allow UAE-based users to buy, sell and hold digital assets.“This approval lays the foundation for Revolut to introduce its trusted virtual asset services within a regulated environment,” said Revolut’s head of digital assets in the UAE free zone establishment, Joseph Khair.The UAE regulatory approval followed Revolut receiving a UK banking license in March. The company still has similar applications pending for a US banking charter and licensing in Peru as part of its expansion plans.Related: ECB picks 36 payment providers to test digital euro ahead of 2027 pilotAt the time of publication, VARA listed 51 companies licensed to offer crypto-related services in the UAE, with 22 entities granted in-principle approval. In May, the regulator preliminarily approved cryptocurrency exchange Kraken’s parent company, Payward. The company is expected to fully launch in the region soon.Revolut to delist USDT next month amid regulatory concernsLast week, a Revolut spokesperson told Cointelegraph that the company planned to delist the Tether USDt (USDT) stablecoin starting in August for the European Economic Area and Switzerland. The move followed a review of Revolut’s crypto services and risk considerations under the European Union’s Markets in Crypto-Assets (MiCA) framework, which required companies offering digital asset services to be licensed by July 1.Magazine: Is Robinhood Chain’s success bullish or bearish for ETH the asset?Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Acting US Attorney General Todd Blanche faced backlash Wednesday over the Justice Department’s (DoJ) enforcement of crypto-related crimes and other actions as President Donald Trump’s former personal attorney appeared before a Senate hearing considering his nomination to lead the agency.The ranking Democrat, Senator Dick Durbin, used part of his opening statement at the Senate Judiciary Committee hearing to criticize Trump’s AG pick for what he described as “dismantling DoJ’s enforcement team and shutting down ongoing criminal investigations of the crypto industry.” Blanche was reportedly behind the disbanding of the Justice Department’s crypto enforcement unit in April 2025 as deputy attorney general.Todd Blanche speaking at his confirmation hearing before the Senate Judiciary Committee on Wednesday. Source: Associated PressThe Illinois lawmaker said that Blanche’s order dismantling the DoJ’s crypto unit enable Trump to earn $1.4 billion from his ties to the industry, including his family’s business World Liberty Financial. He also accused former Binance CEO Changpeng “CZ” Zhao of “broker[ing] a deal to channel $2 billion” into World Liberty, which led to a presidential pardon. The former CEO agreed in 2023 to plead guilty to one felony charge related to the Anti-Money Laundering (AML) regime at the exchange. “Every smarmy, suspect deal in this administration has cryptocurrency behind the curtain,” said Durbin.Senate Republicans need a simple majority of lawmakers present to confirm Blanche as AG should his nomination advance in the judiciary panel. With Senator Mitch McConnell still hospitalized after what his team described as a fall that led to pneumonia, the party has a slim 52-47 margin to confirm Blanche, who faces pushback over the DoJ’s actions on immigration and its crypto policies, claims that he would facilitate Trump’s attacks on perceived enemies and the handling of the Jeffrey Epstein files.Related: Three US senators oppose CLARITY Act on ethics grounds with vote expected soonBlanche also faced crypto-related questions Republican Senator Thom Tillis who said he was “concerned that the Binance CEO got pardoned.” Blanche said that he would review the pardon process if confirmed.Blanche signals DoJ shift on pursuing codersThe Trump AG pick was behind a 2025 memo “ending regulation by prosecution” in the crypto industry and previously held at least $159,000 worth of digital asset-related investments before divesting them to his children and grandchildren. He has been serving as acting US Attorney General since Pamela Bondi’s firing in April, telling crypto holders shortly after his appointment that officials would not pursue cases into blockchain developers who were not responsible for illicit activity on platforms.  ”[I]f you are developing software, if you are a coder, if you are part of that process and you are not the third-party user, and you are not helping and knowing the third party is using what you developed to commit crimes, you are not going to be investigated and not going to be charged,” Blanche said at the Bitcoin 2026 conference.The department still has ongoing cases against developers behind platforms allegedly used for illegal activities. Federal prosecutors are expected to retry Tornado Cash co-founder Roman Storm later this year after a jury failed to reach a verdict on two charges in 2025.Magazine: Will the crypto lobby’s $189M campaign get CLARITY over the line?

Decentralized trading protocol Ostium paused trading Wednesday after blockchain security firms Blockaid and CertiK reported an apparent exploit of its OLP liquidity vault.Blockaid estimated the exploit resulted in roughly $18 million in losses, while CertiK placed the figure at about $22 million. Both firms attributed the incident to an apparent compromise of Ostium’s oracle system, which supplies external price data to the protocol.Source: OstiumOstium announced on X that it paused all trading after identifying an issue affecting the vault. It subsequently said: “With user security being our first concern, we recommend that all users temporarily revoke approvals for our contracts until we can further investigate the recent incident.”The protocol said its team is investigating and has not yet confirmed the cause of the incident or the estimated losses reported by blockchain security firms.Built on Arbitrum, Ostium is an onchain perpetuals trading platform offering leveraged exposure to 75 trading pairs spanning stocks, ETFs, commodities, indices, foreign exchange and cryptocurrencies.Source: CertiKAlertRelated: Crypto hacks fell 47% in H1 but ecosystem is no safer: CertiKDeFi hacks remain persistent challengeThe incident is the latest in a series of high-profile attacks targeting decentralized finance protocols this year, despite broader efforts to strengthen security across the sector.According to DeFiLlama, crypto hacks resulted in nearly $630 million in losses during April, the highest monthly total since February 2025. DeFi protocols accounted for the vast majority of those losses, with exploits at KelpDAO and Drift Protocol making up more than 80% of the month’s total.Security researchers have said recent DeFi attacks increasingly target offchain infrastructure such as oracle systems, privileged access and key management rather than exploiting flaws in smart contracts alone.The attacks have also fueled concerns about DeFi’s readiness for institutional adoption. In an April research note, JPMorgan analysts said bridge security remains a key challenge for the sector, raising questions about whether DeFi can scale to support broader institutional participation.Industry executives have warned that shrinking DeFi yields are making security risks harder to justify. Speaking to Cointelegraph in May, the CEO of smart contract security firm Statemind and Symbiotic co-founder, Misha Putiatin, said institutions increasingly struggle to quantify hack risk, making them less willing to accept the sector’s returns despite growing interest in blockchain-based finance.Magazine: Strategy became a symbol of the dot-com crash: Could history repeat?