Canada is set to officially unveil retaliatory tariffs targeting U.S. imports on Wednesday, according to the latest update.

The U.S. Securities and Exchange Commission has issued subpoenas to several major Wall Street banks seeking information about their dealings with Situational Awareness, a San Francisco-based AI-focused hedge fund that came close to collapsing last month, according to people familiar with the outreach. Regulatory filings show Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase among the fund's largest counterparties. The SEC requests focus on the timing of certain trades and communications tied to borrowed money, and instruct banks to preserve all records connected to the firm, the people said. Situational Awareness has not been accused of wrongdoing. A spokesperson for the fund said heightened scrutiny is common for high-profile managers that post outsized gains or suffer sharp drawdowns. The fund managed more than $30 billion at its peak and borrowed tens of billions more. It was founded about two years ago by Leopold Aschenbrenner, a 24-year-old former OpenAI researcher. In March, the fund held $8.5 billion in protective put options, positions that had largely vanished by June 30. By that date, it instead reported $12.5 billion in outright long positions. Late July brought the stress test: AI stocks fell, while more traditional technology shares that the fund had shorted rose. Margin calls followed, and the portfolio dropped about 67%. Citadel acquired the fund's public equity book at an estimated 10% discount. Mining stocks grew to roughly a quarter of the portfolio, reaching $1.99 billion in the final Form 13F filing. Core Scientific, Riot Platforms and IREN were among the largest mining-related holdings. Citadel later worked through the remaining miner exposure via nearly 100 block trades. JPMorgan CEO Jamie Dimon warned this month that margin debt has hit record levels. People familiar with the matter cautioned the SEC's review may not result in an enforcement case, but the documents could clarify how long banks financed a concentrated AI wager before tightening credit. Situational Awareness still owns a stake in Anthropic, which is weighing a public listing, and that position is seen as the clearest indicator of what remained after July's selloff. The SEC and the banks declined to comment.

ChainThink said CME's FedWatch tool showed shifting rate expectations as of Aug. 25. Markets now price a 58.6% chance the Federal Reserve leaves rates unchanged at the September meeting, versus a 41.4% probability of a cumulative 25-basis-point hike. For October, FedWatch indicates a 43.0% chance of no change, a 46.0% probability of a cumulative 25-basis-point increase, and an 11.0% chance of a cumulative 50-basis-point hike. The figures reflect market-implied pricing for the next two FOMC decisions.

ME News reported that on Aug. 25 (UTC+8), U.S. soldier Gannon Ken Van Dyke was accused of trading event contracts on prediction-market platform Polymarket using nonpublic information tied to expectations that Venezuelan President Nicolás Maduro could be removed in January, generating more than $400,000 in profits. U.S. authorities brought fraud charges against Van Dyke in April. The U.S. Commodity Futures Trading Commission (CFTC) has also pursued a civil case against him, but a federal judge has ordered that proceeding stayed until the criminal matter is resolved. The CFTC has sought permission to file an amicus curiae brief to argue its view on whether event contracts fit within its regulatory definition of "swaps." On Monday, Van Dyke's lawyers filed papers in the U.S. District Court for the Southern District of New York opposing the CFTC's involvement in the criminal case, contending the agency should litigate its position in its own action. Van Dyke has pleaded not guilty to all charges. His criminal trial could begin as early as late 2026 or early 2027. (Source: ODAILY)

Standard Chartered has been approved as the first bank in Hong Kong to distribute the HKDAP stablecoin, a Hong Kong dollar token issued by Anchorpoint Financial. The rollout will initially target eligible institutional clients and partners. Planned use cases include fund subscriptions and settlement, asset manager settlements, internal transfers, and cross-border payments. Standard Chartered said it will work with selected asset managers on tokenized money market fund subscription and settlement services, and will also pilot HKDAP for transfers among group entities while assessing potential applications in treasury management and cross-border payments. Anchorpoint holds one of the first two stablecoin issuer licences granted by the Hong Kong Monetary Authority (HKMA) in April. Standard Chartered is Anchorpoint's majority shareholder and is now its first bank distributor, enabling eligible institutions to access HKDAP through the bank's existing onboarding and compliance channels. Standard Chartered has not disclosed fees, client commitments, or current transaction volumes. HKDAP entered beta distribution on August 12 via HashKey Exchange and OSL Group, covering institutional clients, corporate users, and professional investors. OSL said it will provide distribution and liquidity services, while HashKey will support fiat conversions and commercial integration. Retail availability could follow later in 2026, depending on market conditions. Hong Kong's Stablecoins Ordinance took effect in August 2025, requiring issuers of covered fiat-linked tokens to hold a licence and comply with reserve, redemption, governance, risk management, and disclosure standards. The rules also require valid redemptions at par in the reference currency. The HKMA granted the second issuer licence to HSBC. HSBC has said it plans to launch its Hong Kong dollar stablecoin in the second half of 2026, with proposed distribution channels including PayMe and the HSBC Hong Kong mobile app. Standard Chartered's role combines majority ownership in the issuer with institutional distribution, giving HKDAP direct access to corporate banking relationships. Anchorpoint remains responsible for licensed issuer obligations, including reserves, redemption processes, governance, and disclosures. Disclaimer: This content is for informational purposes only and does not constitute financial advice. Readers should conduct their own research before making financial decisions.

The Blockchain Association and the Crypto Council for Innovation have jointly sued to challenge Illinois' Digital Asset Tax Act, launching a court fight over whether the state can levy a transaction tax on digital asset activity. Filed in Illinois state court on August 21, the lawsuit asks the court to block the statute before it is scheduled to take effect on January 1, 2027. The law would impose a 0.2% tax on the value of digital asset transactions. The groups argue the measure violates the dormant Commerce Clause, the federal Internet Tax Freedom Act, and Illinois due process protections. They say the tax is not just a state revenue issue: if it survives, it could serve as a template for other states seeking to tax crypto transactions directly. If the challengers prevail, it could narrow how far state-level crypto transaction taxes can go. TL;DR: Two crypto industry groups are suing over Illinois' Digital Asset Tax Act, which would add a 0.2% levy to digital asset transactions starting January 1, 2027. The case is pending, and the tax has not been blocked. Why Illinois' move draws attention Crypto taxes are typically debated in Washington, where investors focus on capital gains, income reporting, broker rules, and IRS guidance. States still influence the market through taxation, licensing, consumer-protection regimes, and money-transmission requirements. Illinois stands out because the law targets transactions themselves. A 0.2% charge may look modest, but transaction-based costs can add up in high-frequency trading, exchange flows, DeFi routing, payments, and institutional execution. A broadly applied tax could affect both users and service providers, which is why the groups are trying to stop it before the effective date. Commerce Clause at the center A key claim rests on the dormant Commerce Clause, a doctrine that generally limits states from imposing undue burdens on interstate commerce. Digital asset transactions often span state and national borders, ride global networks, and do not fit neatly within a single jurisdiction. Challengers contend that taxing transactions tied to out-of-state activity reaches beyond Illinois' proper authority, an argument that could gain relevance if other states pursue similar taxes. Internet Tax Freedom Act adds a federal hook The complaint also cites the Internet Tax Freedom Act, which restricts certain discriminatory taxes on internet access and online commerce. The groups may argue that a digital asset transaction tax effectively singles out internet-based financial activity. The strength of that claim will depend on how the court interprets the statute and how Illinois frames its defense, but it broadens the case into a dispute over how states tax digital commerce. No court relief yet The filing does not mean the tax is off the table. There has been no final ruling or injunction, and Illinois can still defend the law. Litigation may take time and the outcome is uncertain, a point worth noting in a market that sometimes treats the existence of a lawsuit as a win. Potential precedent for other states If the case moves forward, it could shape how other states approach crypto taxation. A ruling against Illinois could deter transaction-level digital asset taxes; a ruling for the state could invite copycat measures. Either way, the dispute underscores that crypto policy is being shaped not only by federal regulators but also through state legislatures and state courts. This report is based on the Blockchain Association' announcement and court-related materials concerning the Illinois Digital Asset Tax Act lawsuit. It was written by the News Desk and edited by Samuel Rae, drawing on disclosures in primary-source documentation.

ChainThink reported that on Aug. 25, citing Finviz, the U.S. Securities and Exchange Commission has opened an investigation into a discounted liquidation by the AI-focused hedge fund Situational Awareness. The agency has issued subpoenas to major Wall Street banks tied to the trades, seeking transaction timestamps and records of communications with lenders. Situational Awareness was founded by Leopold Aschenbrenner, a former OpenAI researcher. At its peak, the fund managed more than $30 billion in assets and reportedly borrowed hundreds of billions of dollars to amplify its positions. Late last month, losses deepened as AI stocks fell while traditional technology shares advanced, prompting the fund to offload a large portion of its portfolio at a discount to Citadel. The SEC said the inquiry remains in an early phase and does not signal any predetermined enforcement action. The fund has not been accused of wrongdoing and said it will fully cooperate with regulators.

The Blockchain Association submitted a comment letter to federal regulators on Aug. 21, challenging the reach of proposed know-your-customer requirements for stablecoin issuers. The group argues that when a user acquires a stablecoin on a decentralized exchange via a smart contract, the issuer should not be responsible for identifying that buyer. The letter responds to a joint proposed rule from FinCEN, the Federal Reserve and other federal agencies that would impose customer identification program (CIP) obligations on permitted payment stablecoin issuers (PPSIs) under the GENIUS Act. Signed into law on July 18, 2025, the GENIUS Act is the first comprehensive U.S. federal framework governing payment stablecoins. KYC supported, but only where the issuer has a customer relationship The Association said it supports the concept of KYC for stablecoin issuers and broadly endorses the proposed rule. Its objection centers on how far CIP duties should extend. Under the proposal, CIP requirements mirror bank-style obligations. Issuers would be expected to collect a customer's name, date of birth, address and identification number, and retain records for five years after an account is closed. The Association contends these requirements should apply only when there is an explicit contractual relationship between an issuer and a customer, namely primary market activity such as direct minting and redemption. It says secondary market transactions, including swaps executed on decentralized protocols, do not involve a direct issuer-to-buyer relationship, making issuer-led identification impractical and inconsistent with how blockchain infrastructure functions. Pushing for zero-knowledge proofs as a compliance option Beyond scope, the letter calls for flexibility in how identity verification can be performed. The Association urges regulators to recognize zero-knowledge proof technology as an acceptable way to meet CIP requirements. Zero-knowledge proofs can allow a party to demonstrate a fact—such as being over 18 or having completed identity verification—without disclosing the underlying personal data. The Association argues this approach could reduce the privacy and security risks associated with storing sensitive information, an issue it says is heightened by the proposed five-year recordkeeping requirement. Request to align agency timelines The comment letter also highlights potential coordination issues as multiple agencies implement the GENIUS Act on different schedules. The Association asked regulators to synchronize deadlines to avoid overlapping or conflicting compliance windows for issuers. The submission aligns with the rulemaking process timeline, which includes August 2026 deadlines.

The U.S. Securities and Exchange Commission is investigating the near-collapse of Leopold Aschenbrenner's $30 billion AI-focused hedge fund, Situational Awareness. Regulators have issued subpoenas to major Wall Street banks seeking information on the fund's heavily leveraged trading activity, which is said to have triggered a large-scale fire sale of assets to Citadel.