Autor Cointelegraph By Jesse Coghlan

Paradigm has raised $1.2 billion for its fourth fund, which will expand the crypto venture capital firm’s investments into artificial intelligence and related technologies.The company said on Wednesday that its latest fund will invest “first in crypto, and now across AI, robotics and other frontiers.”“We continue investing in crypto and the reinvention of markets and the financial system,” Paradigm added, highlighting its investments in the crypto perpetuals exchange Hyperliquid and the prediction markets platform Kalshi.Paradigm launched in 2018 and has raised more than $4 billion for three funds focused on crypto. Its interest in AI follows a trend of originally crypto-focused companies that have been lured to the lucrative and fast-growing sector.Source: Matt HuangThe Wall Street Journal reported in February that Paradigm was seeking to raise $1.5 billion for a new fund that would invest in AI and robotics.The company’s management reportedly decided to broaden its investments as it didn’t want to be restricted and miss out on attractive deals. There was also a noted overlap between crypto and AI, such as with AI agents.Crypto exchanges such as Crypto.com and Coinbase have made big bets on AI agents, offering the technology to their users and updating their platforms to cater to the bots.Crypto funding sinks as AI funding peaksOther crypto venture companies have moved beyond crypto, including Framework Ventures, which raised $400 million for its fourth fund last month for investments in crypto as well as AI, robotics and energy.In May, crypto venture firm Haun Ventures raised $1 billion to back crypto startups and expanded into AI for the first time.Global venture funding hit a record $510 billion in the first half of 2026, a new record for half-year investments that surpassed the $440 billion invested across all of last year, Crunchbase reported on July 2.Related: Morpho’s $175M raise shows where crypto VC money is flowingAI companies made up the majority of the investment, with OpenAI and Anthropic accounting for more than 40% of funding in the first half of the year.Meanwhile, crypto captured only a portion of all venture flows, with funding into crypto in the first half hitting $10.8 billion, according to Cryptorank.Paradigm highlighted that some of its non-crypto investments included the autonomous drone delivery service Zipline, the robotic metal fabrication platform SendCutSend and the AI company Nous Research, which created the open-source AI model Hermes Agent.It added that it would “continue to research and build where it accelerates” the crypto industry, and noted the blockchain tools Foundry and Reth and the AI projects EVMbench and Centaur.Features: AI’s power crunch turns Bitcoin miners’ grid access into an asset

EU lawmakers are set to vote again on controversial legislation dubbed “chat control” by its critics, which would allow tech firms to scan messages for child sexual abuse material.On Tuesday, the European Parliament voted through a rarely used urgent procedure that will bring lawmakers to a vote Thursday on whether to extend the legal framework, which expired in early April.“Today’s vote violates our own rules of procedure, the European Parliament decided to use an urgent procedure for Chat Control 1.0,” Pirate Party MEP Markéta Gregorová said on Tuesday. “This means that on Thursday, we will once again vote on extending the derogation that allowed online platforms to scan our private communications.”The upcoming vote could revive the so-called “chat control” rules that are controversial among privacy and cryptography advocates, as tech companies must scan end-to-end encrypted messages.Since the legal framework expired in April, messaging platforms such as WhatsApp have been allowed to take their own voluntary measures to seek out those sharing abusive material.Rejecting proposal requires absolute majorityGregorová said rejecting or amending the proposal will require an absolute majority of 361 votes in Parliament.The vote Tuesday narrowly passed, with 331 in favor, 304 against and 11 abstaining.In March, Parliament rejected a temporary extension of the scheme proposed by the European Commission while a new version of the law was under discussion, in a vote of 311 against, 228 for and 92 abstaining.Euronews reported Tuesday that the latest proposal was revived by the European People’s Party, the largest group in Parliament, which largely voted against the measure in March because of amendments that restricted the scope of the chat scans.However, European People’s Party leader Manfred Weber has been looking for ways to push through the extension without changes.Related: Privacy advocates slam reCAPTCHA update they say locks out de-Googled phones“The European People’s Party is abusing its position as the largest political group to bring back, through a procedural loophole, a proposal that Parliament had already rejected,” Gregorová said. “This is unprecedented.”EU member states agreed to reinstate an interim “chat control” measure last month, which would allow service providers to detect, report, and remove abusive material until 2028.Features: Crypto industry looks to stablecoins and DeFi revisions in MiCA 2.0

The US Commodity Futures Trading Commission has sued a North Carolina man, accusing him of operating a commodity pool featuring crypto that defrauded investors of more than $14 million.The CFTC’s lawsuit, filed in federal court on Tuesday, alleged that Trevor Vernon and his company, Argent Capital Management, operated a commodity pool featuring equity index futures, options on equity index futures and crypto.The agency alleged that from March 2022 to February 2026, Vernon solicited $14.8 million from at least 60 investors and falsely claimed he was a successful trader, even though his trading actually “resulted in consistent and catastrophic losses” for the pool’s investors.The lawsuit is a rare crypto-related enforcement action from the CFTC, which is angling to oversee the crypto industry while facing questions from some lawmakers about whether it has the resources to police the complicated and rapidly growing sector.The agency alleged that as part of the scheme, Vernon traded crypto, including Bitcoin (BTC) and Ether (ETH), which the CFTC asserted were commodities.CFTC alleges Vernon ran pool “akin to a Ponzi scheme”The CFTC alleged in its complaint that Vernon made false statements to existing and potential investors, including in quarterly account updates and monthly performance emails.The agency claimed Vernon’s trading of crypto, as well as futures and options on stock indices, resulted in losses of more than $8.6 million.Related: CME Group sues CFTC over crypto perpetual futures The CFTC said Vernon never disclosed the losses to investors and alleged he misappropriated $3 million to pay investors “in a manner akin to a Ponzi scheme” to hide his losses. He also allegedly misappropriated $136,000 for private air travel, according to the lawsuit. The CFTC accused Argent Capital Management of failing to register with the agency as required by federal commodities law, and claimed Vernon made false statements to the regulator in January about the issues alleged in its complaint.The CFTC charged Vernon with seven counts related to fraud, failure to register and making false statements.It asked the court to permanently ban Vernon from registration and trading, along with disgorgement, penalties and restitution.Features: From Bitcoin critics to blockchain believers: The 5 biggest crypto backflips

Crypto gaming company Yield Guild Games says it has shut down its crypto game publishing arm, YGG Play, and will instead focus on feeding data to artificial intelligence.Yield Guild Games said Monday that it would also lay off 35 employees, adding that a prolonged crypto market downturn and a “similarly brutal” video game publishing market meant YGG Play “cannot be commercially sustainable.”It said a major market crash on Oct. 10 “fundamentally altered retail market psychology, and we do not expect the crypto consumer market or the Web3 games publishing market to recover sufficiently in the near term.”The layoffs add to the more than 5,000 jobs that crypto companies have cut this year, with many citing a crypto market slump and a refocus toward opportunities presented by artificial intelligence.“Sunsetting YGG Play is a heavy decision, but it is a market decision, not a product decision,” Yield Guild Games co-founder Gabby Dizon said. “I am proud of what this team achieved under such tough conditions.”Source: Yield Guild GamesYield Guild Games said it would be closing YGG Play’s website, its web app that launched games and its community-focused rewards site. It would also end all marketing support for third-party games.The company’s board game-style browser game LOL Land and its puzzle game Waifu Sweeper would also be taken down. The Web3 versions of the baseball game GIGACHADBAT and the battle game Ragnarok Breaker would continue as normal.The company said sunsetting YGG Play and its restructure would extend its operating runway to four years, adding it had $20.6 million in its treasury as of the end of the first quarter.Yield Guild pivots to AI dataYield Guild Games said it would refocus its resources “into the AI data economy” to provide information that can be used to train AI models.It will initially create a pipeline for gaming datasets, and said its global community “can generate these behavioral datasets just by playing.”The company said it was “an organic next step” and the data would help AI networks understand “human irrationality and emergent behavior,” as video game players “constantly make complex, split-second decisions.”More than 5,000 crypto layoffs in 2026The crypto industry has cut over 5,000 jobs so far this year, with Block Inc. undertaking the largest round of layoffs in February by cutting 4,000 staff, or about half its workforce at the time.Last month, crypto infrastructure company BitGo laid off 15% of its staff, an estimated 90 people, while Robinhood cut 10% of its workforce.Earlier in the year, Kraken laid off 150 workers, and Coinbase cut 700 employees. Gemini also laid off 200 employees in February and Crypto.com cut about 180 staff a month later, both citing the use of AI.Magazine: Solana exec trolls crypto gamers, Pixel tackles play-to-earn issues: Web3 Gamer

US President Donald Trump says he got involved in crypto “for politics” and became pro-crypto after seeing how much money the industry was making.At a press conference in the Oval Office on Monday to announce “Trump Accounts,” an investment account for children under 18, Trump was asked whether the accounts would allow for Bitcoin (BTC).“I’ve become a big crypto guy only for one reason: If we don’t have it, China’s going to have it,” Trump answered. “I’m a fan, I wasn’t initially, I didn’t know much about it, but, for some of my first term, I wasn’t much involved, and I watched it grow, and it’s a huge industry.”“I got involved in it a little bit for politics,” Trump added. “I realized there are a lot of people that love crypto.”The comments shed new light on why Trump pivoted his stance towards crypto. In his first term, Trump said he was “not a fan” of crypto and called Bitcoin “a scam.” Since then, he and his family have built deep business interests in crypto, and Trump has faced criticism for his pro-crypto stance while being connected to the industry.“As a businessman, I see a lot of money starting to come in with Bitcoin and, you know, the different forms, and I said: ‘This thing’s got a lot of life,’ and then I hear China was going to make a heavy move on it,” he added. “If we didn’t do it, China would do it.”Trump’s pro-crypto pivot attracted the help of the crypto lobby, which spent around $170 million in the 2024 election to help elect mostly Republicans, and is set to spend even more backing pro-crypto candidates in the November midterms.Donald Trump speaks to reporters about “Trump Accounts” at the White House on Monday. Source: YouTubeTrump says he doesn’t talk to family about crypto interestsTrump said he doesn’t talk to his family about their involvement in crypto, an area that made him more than $1.4 billion last year, according to financial disclosures released June 30.Trump and his sons are listed as co-founders of World Liberty Financial, a crypto platform that generated a large portion of Trump’s crypto-related income last year, but the president said his interest in crypto is “not a question of a personal thing.”Related: Donald Trump says ‘nothing wrong’ with $1.4B crypto windfall while in office“I let my kids do whatever the hell they do. I don’t talk to them, ever, talk to them about it,” Trump said.Trump claimed that the Biden administration “dropped all investigations” related to crypto when he “went very pro-crypto.” However, under the Trump administration, the Securities and Exchange Commission stopped multiple investigations and withdrew or settled enforcement actions filed against crypto companies, some of which had donated to Trump.“Every time I see a crypto guy where they dropped an investigation, I said: ‘You’re lucky I’m president,” Trump said.Magazine: SBF will never get a pardon, Trump peace deal boosts Bitcoin: Hodlers Digest