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What makes a crypto token a security? This explainer covers the Howey test, tokenized securities, DeFi governance tokens, staking, and what regulation means for investors.

Whether a crypto asset counts as a security is one of the most consequential questions in digital finance. The answer determines which laws apply, which regulators have authority, and whether a project can legally operate in major markets. As decentralized finance (DeFi) has grown to encompass lending, trading, and yield-generating instruments that closely resemble traditional financial products, the boundary between a crypto token and a regulated security has become genuinely difficult to draw — and the stakes for getting it wrong are high.<h2>What Is a Security, and Why Does the Definition Matter?</h2>In most legal systems, a security is broadly defined as a financial instrument that represents ownership, a creditor relationship, or the right to profit from someone else's efforts. In the United States, courts have applied the Howey test — derived from a 1946 Supreme Court case — to determine whether something qualifies. Under Howey, an investment contract is a security if it involves an investment of money in a common enterprise with an expectation of profit derived primarily from the efforts of others.This definition was written long before blockchains existed, but regulators have argued it applies to many crypto tokens. A token sold to fund a project, where buyers expect the development team's work to drive value, fits the Howey criteria closely. By contrast, a token that functions purely as a means of payment or grants access to a software service may not. The distinction is rarely clean in practice, which is why classification disputes have driven some of the most significant regulatory actions in crypto.Outside the United States, the European Union's Markets in Crypto-Assets (MiCA) framework and the United Kingdom's Financial Services and Markets Act take their own approaches, but the underlying question is similar: does this instrument behave like a financial product that warrants investor protection rules?<h2>Tokenized Securities: Traditional Assets on a Blockchain</h2>A growing segment of the crypto industry is not trying to avoid securities law but to work within it. Tokenized securities — sometimes called security tokens — are digital representations of conventional financial assets such as company shares, government bonds, real estate funds, or private equity stakes. Each token is backed by the underlying asset and issued in compliance with applicable securities regulations.The appeal is practical. Tokenization allows an asset that would normally require a minimum investment of thousands of dollars to be divided into small fractions, lowering the barrier for retail participants. Settlement, which traditionally takes two business days in equity markets, can occur in minutes on a blockchain. Ownership records are maintained on a transparent, tamper-resistant ledger rather than through a chain of intermediaries. Platforms that issue tokenized securities must register with regulators or operate under an exemption, and investors must typically complete identity verification under anti-money-laundering rules.Custody is another important consideration. When you hold a tokenized security, you need to understand whether you hold the token directly in a self-custodied wallet — meaning you control the private key — or whether a regulated custodian holds it on your behalf. The distinction matters because it affects what happens if the platform fails. <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">Recent developments in crypto custody</a> have made this question more visible for investors across the industry.<h2>DeFi Protocols and the Securities Question</h2>Decentralized finance protocols complicate the picture further. DeFi refers to financial services — lending, borrowing, trading, earning yield — delivered through smart contracts, which are self-executing programs on a blockchain that operate without a central intermediary. Users interact with the protocol directly through their wallets, and the rules of the service are encoded in publicly visible code rather than enforced by a company.The decentralized structure raises a fundamental regulatory question: if there is no issuer, no company, and no central party collecting funds, can the instruments a DeFi protocol creates still be securities? Regulators in several jurisdictions have argued yes, focusing on the governance tokens that many DeFi protocols issue. These tokens typically grant holders voting rights over the protocol's future development and may entitle them to a share of fees the protocol generates. That combination — investment, shared enterprise, profit from others' efforts — maps closely onto the Howey test.Governance tokens for major DeFi protocols have been among the most scrutinized assets in regulatory discussions. The argument from protocol developers is usually that the tokens confer genuine utility and that no central party is responsible for generating returns. Regulators have generally been skeptical of that framing when the economic reality looks like an investment product. This tension is unresolved in most jurisdictions and continues to shape how new DeFi projects are structured.<h2>Yield-Bearing Instruments and Staking</h2>Staking is the process of locking cryptocurrency in a blockchain network to help validate transactions, in return for newly issued tokens as a reward. Some regulators have argued that staking-as-a-service — where a platform stakes assets on a user's behalf and distributes rewards — resembles a securities offering because users are effectively investing assets and relying on the platform's efforts to generate returns.Similarly, DeFi lending protocols allow users to deposit assets into liquidity pools and earn interest paid by borrowers. The yield is generated algorithmically, but the question of whether depositors are passive investors relying on the protocol's developers is one that securities lawyers debate actively. The answer can vary depending on how the protocol is governed, whether a foundation or company controls upgrades, and how rewards are distributed.For users, the practical implication is that instruments offering yield in crypto — whether through staking services, liquidity provision, or tokenized bonds — may carry regulatory obligations that affect which platforms can legally offer them and in which countries. <a href="https://www.cryptoknowmics.com/news/tag/cryptocurrency-regulation/">Regulatory developments in this area</a> have accelerated in recent years as governments seek to bring yield-bearing crypto products within existing investor-protection frameworks.<h2>What This Means for Crypto Investors</h2>Understanding whether an asset is a security has direct consequences for anyone participating in crypto markets. Securities are subject to disclosure requirements, meaning issuers must provide audited financial information and material updates. They are also subject to transfer restrictions in many cases — a token classified as a security cannot simply be listed on any exchange; the exchange itself must be a registered securities venue or operate under an exemption.For investors, this means due diligence should include asking whether a token has been assessed for securities status in the jurisdictions where it is offered, whether the platform offering it is licensed, and what recourse exists if something goes wrong. Tokenized securities issued by regulated entities generally offer stronger legal protections than unregistered tokens, but they also come with more friction — identity checks, transfer restrictions, and limited secondary market liquidity in some cases.The broader trajectory of the industry points toward greater clarity over time. Regulatory frameworks in the EU, UK, Singapore, and elsewhere are establishing defined categories for crypto assets, including those that function as securities. As those frameworks mature, the legal status of many existing tokens will become clearer, which is likely to reshape which projects survive and which face enforcement action. Keeping pace with that regulatory evolution is, at this point, as important as understanding the technology itself. For ongoing coverage of how these rules are developing, the <a href="https://www.cryptoknowmics.com/news/bitcoin/">Bitcoin and broader crypto markets</a> continue to be shaped by each new regulatory decision.

What Are DeFi Securities? How Blockchain Is Redefining Financial Assets

Learn how Federal Reserve interest rate decisions and inflation data move Bitcoin&#8217;s price, and why the Fed-crypto relationship has grown stronger over time.

Bitcoin's price dropped to near a three-month low in mid-November 2026 after US inflation data came in stronger than markets had hoped, reviving concern that the Federal Reserve would keep interest rates higher for longer. The episode is a clear illustration of a dynamic that has become central to crypto markets: decisions made in Washington by the Federal Reserve now move Bitcoin in ways they did not a decade ago.<h2>What the Federal Reserve Actually Does</h2>The Federal Reserve — often called simply "the Fed" — is the central bank of the United States. Its primary tools are the federal funds rate, which is the interest rate at which banks lend money to each other overnight, and its balance sheet, which it can expand by buying assets (quantitative easing) or shrink by selling them (quantitative tightening). Both tools influence the cost and availability of money across the entire economy.When the Fed raises rates, borrowing becomes more expensive. Investors who might otherwise put money into growth assets — stocks, venture capital, or cryptocurrencies — can instead earn a meaningful return simply by holding cash or short-term government bonds. That shift in the opportunity cost of capital tends to pull money out of higher-risk investments. When the Fed cuts rates, the reverse dynamic applies: cash earns little, and investors are more willing to reach for assets with higher potential returns.<h2>Why Bitcoin Is Sensitive to Rate Expectations</h2>Bitcoin was originally conceived as a decentralized alternative to the traditional financial system, and its early price movements had little correlation with Fed decisions. That changed meaningfully as institutional investors — hedge funds, asset managers, publicly traded companies and, more recently, spot Bitcoin exchange-traded funds (ETFs) — entered the market. These participants manage portfolios that span multiple asset classes, and they adjust their crypto allocations using the same macro frameworks they apply to equities or commodities.An ETF, in simple terms, is a fund that trades on a stock exchange and holds an underlying asset — in this case, Bitcoin — on behalf of investors. When institutional money flows into or out of Bitcoin ETFs in response to macro conditions, it creates price pressure that would not have existed when Bitcoin was held almost exclusively by retail participants. The result is that Bitcoin now behaves, at least in part, like a risk asset: an investment whose appeal rises and falls with investors' broader willingness to take on uncertainty.Inflation data matters because it shapes expectations about what the Fed will do next. Higher-than-expected inflation suggests the Fed may need to keep rates elevated or raise them further, which is negative for risk assets. Lower inflation opens the door to rate cuts, which tends to be positive. This is why a single Consumer Price Index (CPI) report can move <a href="https://www.cryptoknowmics.com/news/bitcoin/">Bitcoin</a> sharply within hours of its release.<h2>What the November 2026 Selloff Illustrates</h2>The mid-November decline in Bitcoin — which also pulled other <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">cryptocurrencies</a> to two-month lows — followed US inflation data that dampened risk appetite across financial markets. The move erased a bullish price signal that had formed in September, a reminder that technical patterns in crypto can be quickly overridden by macroeconomic developments. The timing around the US midterm elections added another layer of uncertainty, as political outcomes can influence fiscal policy expectations and, by extension, the Fed's longer-term operating environment.This is not an unusual sequence of events. Bitcoin has repeatedly sold off in periods when inflation surprised to the upside or when Fed officials signaled a more aggressive tightening stance, and has rallied when rate-cut expectations grew. The pattern does not hold perfectly in every instance — crypto markets have their own internal dynamics, including supply events like the Bitcoin halving, exchange-specific developments and sentiment cycles — but the macro overlay has become impossible to ignore.<h2>The Halving, Liquidity and the Bigger Picture</h2>Bitcoin's supply schedule is fixed by its protocol. Roughly every four years, the reward paid to miners who validate transactions is cut in half — an event known as the halving. This predictable supply reduction has historically been associated with price appreciation in the months that follow, because it reduces the rate at which new Bitcoin enters circulation while demand can remain constant or grow.The halving is a Bitcoin-specific factor that operates independently of the Fed. But it does not exist in a vacuum. A halving that occurs during a period of tight monetary policy and low risk appetite may produce a more muted response than one that coincides with an easing cycle and abundant liquidity. Understanding both the internal supply mechanics and the external macro environment gives a more complete picture of what drives Bitcoin's price than either factor alone.Liquidity — the ease with which money flows through the financial system — is the thread connecting Fed policy to asset prices broadly. When the Fed expands its balance sheet, it injects liquidity that tends to find its way into a wide range of assets. When it tightens, that liquidity contracts. Bitcoin, as a globally traded, highly liquid asset with no earnings or dividends to anchor its valuation, is particularly sensitive to these shifts because its price is determined almost entirely by supply, demand and sentiment.<h2>What This Means for Bitcoin Holders</h2>For anyone holding or considering Bitcoin, the practical implication is that monitoring the Federal Reserve's policy direction is now a meaningful part of understanding the asset's near-term environment. Key moments to watch include Federal Open Market Committee (FOMC) meetings, at which the Fed sets its benchmark rate, and major economic data releases — particularly CPI inflation reports and employment figures — that shape expectations ahead of those meetings.This does not mean Bitcoin's price is simply a function of Fed policy. Crypto-specific developments, <a href="https://www.cryptoknowmics.com/news/tag/cryptocurrency-regulation/">regulatory changes</a>, technological progress and market structure all play roles. But ignoring the macro backdrop has become increasingly costly as the asset class has matured and attracted participants who treat it as one component of a broader portfolio rather than an isolated bet.The November 2026 selloff is a useful reminder that Bitcoin's narrative as a hedge against inflation is more complicated than it first appears. While Bitcoin's fixed supply does make it structurally different from fiat currencies that can be printed without limit, in the short to medium term, high inflation tends to hurt Bitcoin's price because of what it implies about Fed behavior — not help it. The long-run and short-run stories point in different directions, and conflating them is a common source of confusion for investors.

How Federal Reserve Policy Shapes Bitcoin's Price

MSCI&#8217;s November 2026 index review officially deletes Strategy, Metaplanet and Upexi from global equity benchmarks, with changes effective November 30, 2026.

MSCI has officially confirmed that Strategy, Japan's Metaplanet and micro-cap Upexi will be removed from its global equity indexes, with the changes taking effect after market close on November 30, 2026. The decision, published as part of MSCI's November index review, ends months of uncertainty for the three companies and marks the first major application of MSCI's new screen targeting firms whose assets are dominated by non-operating holdings.<h2>What the Review Decided</h2>MSCI's final list of affected securities marks all three companies with the action "Deleted." Ether treasury firm SharpLink was not removed outright but placed on a watchlist, meaning it faces potential deletion in a future review if it continues to fail the screen. Strategy shares slipped 1.65% in after-hours trading on Wednesday, November 12.The screen that triggered the removals does not reference bitcoin or digital assets by name. Instead, MSCI first tests whether a company's operating assets — the assets tied to its core business activity — exceed 50% of total assets. Companies that fail that threshold are then assessed against five financial ratios; a firm flagged on four or more of them becomes ineligible for the <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">MSCI Global Investable Market Indexes</a>. A current constituent is removed only if it fails the screen in each of its two most recent annual filing periods, a buffer designed to limit unnecessary turnover.<h2>Strategy's Position and the Accounting Question</h2>Strategy has consistently argued that its bitcoin holdings constitute an operating segment and that related gains and losses flow through operating expenses — a framing that, if accepted, would push its operating-asset ratio above the 50% threshold. MSCI has not published the specific financial inputs behind its "Deleted" classification, so the precise basis for concluding that Strategy failed both required filing periods is not publicly documented.One complicating factor is that Strategy adopted <a href="https://www.cryptoknowmics.com/news/bitcoin/">fair-value accounting</a> for its bitcoin only at the start of 2025. Its fiscal 2024 statements carried the coins at cost less impairment under the older accounting standard, which may have affected how MSCI read that earlier period. The company held 850,364 bitcoin as of November 8, acquired at an average price of $75,456 per coin.In its consultation response, Strategy played down the practical consequences, stating that MSCI-linked funds held approximately 13 million shares — equal to 3.1% of its basic shares outstanding and less than one day's average trading volume. The company also argued that the new screen effectively recycled MSCI's earlier, abandoned effort to exclude digital-asset treasury companies, and that it introduced policy judgments into what should be a neutral index-construction process.<h2>Market Implications</h2>Index funds that track an MSCI benchmark are required to hold the index's constituents, so a deletion mechanically forces those funds to sell the removed shares before the November 30 close. JPMorgan analysts estimated — based on MSCI's earlier, now-superseded digital-asset proposal — that an exclusion could drive roughly $2.8 billion in outflows from Strategy. MSCI itself has published no outflow estimate for the current screen, and the JPMorgan figure predates the methodology that ultimately took effect.Removal from an index does not delist a company's stock or compel it to liquidate any assets. For Strategy, the more direct consequence would be a reduction in passive buying demand, which could weigh on the premium its shares trade at relative to the underlying bitcoin value — a premium the company has used to fund additional bitcoin purchases by issuing new stock.<h2>Background and What Comes Next</h2>MSCI first proposed excluding companies with large digital-asset holdings in late 2025, targeting firms where such assets exceeded 50% of total assets. That proposal was withdrawn in January 2026 after industry pushback, and a broader consultation opened in August produced the asset-composition screen now in force. The October 2026 announcement set the November review as the implementation vehicle.Metaplanet's deletion follows a quarter in which the Tokyo-listed company sold bitcoin specifically to demonstrate to investors that it could access its holdings for liquidity — a move that may have worsened its standing under the operating-asset test. The November 30 effective date gives affected funds roughly two and a half weeks to unwind their positions in an orderly manner. Whether other major <a href="https://www.cryptoknowmics.com/news/tag/cryptocurrency-regulation/">index providers</a> apply comparable screens to their own benchmarks remains an open question that Strategy and similar firms will be watching closely.

MSCI Confirms Strategy, Metaplanet and Upexi Removed From Global Indexes

Binance warns that a public iOS sandbox escape called worse_query can expose wallet seed phrases and private keys. Here&#8217;s what&#8217;s confirmed and what to do.

Binance warned iPhone users on November 10 that a publicly released iOS exploit could allow a malicious app to read files belonging to other apps on the same device — including the seed phrases and private keys that control crypto wallets. The exchange said the issue is not specific to its own app and urged all iOS users holding crypto in mobile wallets to take immediate precautions.<h2>What the Exploit Does</h2>The vulnerability is a sandbox escape. iOS normally isolates each app inside its own container — a private storage area that other apps cannot access. A researcher posting as forcequitOS released a proof-of-concept called worse_query on GitHub on November 8, describing it as "a zero-day sandbox escape for iOS 26 and 27, again" — a successor to an earlier exploit called bad_query. The project's README states it works across iOS 26.0 through 26.7.2 and on iOS 27.2, and lists the file paths it can reach, including other apps' data containers and shared app group folders.The researcher describes worse_query as "a proof-of-concept for developers" that "isn't useful by itself" and is not a jailbreak. To become a threat, the code must be compiled into an app and installed on a target device. That step has already occurred at least once: the day after the release, developer Christoph Kolbicz published a file manager built on worse_query that lets users browse and edit app data on iOS 27 without jailbreaking, which he said was tested on iOS 27.0.1.<h2>How Serious Is the Risk?</h2>Blockchain security firm SlowMist characterized worse_query as a container sandbox escape rather than a jailbreak. Its chief information security officer, who posts as 23pds, was specific about the conditions required for an actual theft: the flaw will not steal assets on its own. A user must first install and run an untrusted IPA — an app distributed outside Apple's App Store through sideloading or manual signing — and the targeted wallet must store its mnemonic phrase, keystore or WebView cache as a plain-text file on the device.That combination of conditions limits the realistic attack surface considerably. Wallets that do not write recovery phrases to plain files on-device are not exposed in the same way, and hardware wallets keep private keys off the phone entirely. Neither Binance nor the researcher has reported any thefts connected to the vulnerability.<h2>Apple's Response Leaves Questions Open</h2>Apple shipped iOS 27.2.1 and iOS 26.7.3 on November 9, one day after the proof-of-concept went public. The security notes for both releases list fixes for AirPlay, Bluetooth pairing, brotli and other components, but neither mentions worse_query or describes a sandbox escape of this kind. Apple has not publicly confirmed the bug, so users on the patched versions cannot be certain whether the November 9 updates block the technique.<h2>What Binance Recommends</h2>Binance advised users to delete any apps installed from untrusted sources — sideloaded or manually signed IPA files — and to update iOS and every app to the latest official versions. Anyone who suspects their device may have been compromised should move funds to a new wallet created on a clean device and reset all active login sessions. For users holding <a href="https://www.cryptoknowmics.com/news/bitcoin/">bitcoin</a> or other <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">cryptocurrency</a> in a mobile wallet, that guidance reflects sound security practice regardless of this specific flaw.<h2>Broader Security Context</h2>The warning comes as Binance is itself recovering from a significant breach. The exchange lost $6.34 billion in an attack on October 29 that began with a fake job interview. The iOS disclosure adds to a period of heightened security concern across the industry: hardware wallet maker Ledger has reported an organized crime group spending millions targeting its users, and some large holders have moved self-custodied bitcoin into exchange-traded fund shares partly in response to custody risks.For now, the most actionable protection against worse_query is straightforward: avoid installing apps from outside the App Store, keep iOS updated, and — if a wallet stores its recovery phrase as a file on the device — consider whether that storage method meets an acceptable security standard.

iOS Sandbox Flaw Could Expose Crypto Wallet Keys, Binance Warns

Securitize agreed to buy New York firm River One to add stablecoin-funded asset-backed lending to its tokenization platform, with the deal set to close in Q4 2026.

Securitize, the BlackRock-backed tokenization platform, agreed on Monday to acquire River One, a New York-based financing firm developing technology that connects traditional asset-backed lending with stablecoin funding. The deal, expected to close in the fourth quarter of 2026, would move Securitize beyond its core business of issuing and servicing tokenized assets into arranging credit directly.<h2>What River One Brings to the Table</h2>River One is building infrastructure that lets lenders use pools of small business loans or receivables as collateral to borrow money and fund new loans — a structure common in traditional finance known as asset-backed lending. The distinctive element is the funding source: River One's technology is designed to tap <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">stablecoin</a> liquidity rather than conventional bank credit lines. Stablecoins are digital tokens pegged to a fiat currency, typically the US dollar, and have increasingly been used as a settlement and funding layer in on-chain finance.For Securitize, the acquisition adds a credit-arrangement role alongside its existing work tokenizing real-world assets (RWAs) — that is, representing ownership of off-chain financial instruments such as money-market funds or private credit on a blockchain. The company already services tokenized products for BlackRock, among other institutional clients.<h2>Q3 Financials and the $50 Million Buyback</h2>Securitize announced the River One deal alongside its third-quarter results. Revenue reached $18.6 million, a 13% increase from the same period a year earlier. The company recorded a net loss of $66.3 million, but noted that approximately $60 million of that figure reflected largely noncash expenses and accounting charges tied to its business combination and public listing rather than operating cash outflows.Alongside the acquisition, Securitize announced a $50 million stock buyback program. SECZ shares rose 10% in after-hours trading following the announcements.<h2>Where Securitize Stands in the RWA Market</h2>Securitize currently ranks as the second-largest real-world asset platform by total value, with $3.7 billion in RWA assets on its platform, according to data from RWA.xyz. Ondo holds the top position with $4.1 billion. The <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">broader RWA tokenization sector</a> has attracted significant institutional interest as asset managers look for ways to bring traditional financial instruments on-chain.The River One acquisition signals that Securitize is moving to capture value further along the credit chain — not just tokenizing assets that others originate, but participating in the origination and funding process itself. Whether that vertical integration translates into improved margins will depend in part on how quickly the stablecoin-funded lending model gains traction with institutional borrowers.

Securitize Acquires River One to Bring Stablecoin Funding to Asset-Backed Lending

President Santiago Peña resigned November 5 after Ueno Bank&#8217;s solvency collapse froze deposits for 3 million Paraguayans and sparked impeachment proceedings over his ties to the bank&#8217;s parent company.

Santiago Peña resigned as president of Paraguay on Thursday, November 5, citing the need to protect the country's stability and democratic institutions after the failure of digital lender Ueno Bank triggered both a financial emergency and a political crisis. In a video posted to X, Peña said his priority was safeguarding Paraguayans who had entrusted their savings to the financial system — a pointed reference to the more than 3 million depositors who lost access to their funds when authorities suspended the bank's operations.<h2>A Bank That Grew Too Fast</h2>Ueno Bank expanded rapidly after its 2021 launch, becoming one of Paraguay's largest financial institutions in a country of roughly 6.5 million people. Trouble surfaced in June 2026, when regulators began scrutinizing loans the bank had extended to companies connected to its controlling shareholder, Grupo Vázquez. The bank later acknowledged, in an October statement, that it had received regulatory notices on June 5 and July 24 demanding it reduce that related-party lending exposure.Those adjustments proved fatal to the bank's balance sheet. After revisions to its financial statements, Ueno's solvency ratio — the capital buffer regulators require banks to hold against losses — fell to 5.56%, less than half the 12% legal minimum. The Central Bank of Paraguay initiated resolution proceedings on November 2 and suspended operations, cutting customers off from their deposits. The following day, authorities detained eight executives, including Grupo Vázquez president Miguel Vázquez and bank president Juan Manuel Gustale. A court subsequently ordered six of them held in pretrial detention and placed two under house arrest.<h2>The Political Dimension</h2>Peña's exposure to the crisis was not purely institutional. He had remained a business partner of Grupo Vázquez until March 2025, according to the Associated Press, and lawmakers moved to open impeachment proceedings citing alleged conflicts of interest, misuse of pension funds and institutional cover-ups tied to the bank's failure. Peña denied wrongdoing, characterizing the affair as a regulatory dispute that had been weaponized politically.Peña was elected in April 2023 and took office that August, with a five-year term set to run through 2028. Under Paraguay's Constitution, Vice President Pedro Alliana would assume the presidency for the remainder of the term if Congress formally accepts the resignation. Hundreds of depositors, pensioners and workers gathered in the capital, Asunción, demanding the return of their savings and accountability from officials.<h2>What Depositors Can Recover</h2>Paraguay's central bank announced Thursday that it would begin deposit guarantee payments to eligible clients holding balances of up to 10 million guaraníes (roughly $1,630), on the condition that they had no outstanding debts to Ueno and held accounts at other financial institutions. The country's deposit insurance framework protects up to 228.3 million guaraníes (about $37,200) per depositor per institution, so customers with larger balances face a longer, uncertain recovery through the resolution process.<h2>Crypto Markets as an Alternative</h2>With traditional accounts frozen, some Paraguayans sought liquidity through <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">cryptocurrency</a> markets. David Eisenmann, founder and CEO of Paraguayan crypto exchange X4T, said customers were converting holdings into guaraníes or US dollars to cover payroll and settle debts, while others were purchasing dollar-backed stablecoins — digital tokens designed to maintain a one-to-one peg with the US dollar — as a way to preserve value. "When that access is restricted, people look for other sources of liquidity," Eisenmann said.Stablecoin prices on X4T rose about 8% in recent weeks, though Eisenmann was careful to note that the dollar's recovery against the guaraní began in October, before the bank's collapse — central bank data show the dollar gained roughly 1.6% against the guaraní between October 1 and month-end — so the full increase cannot be attributed to the banking crisis alone. On Bybit's Paraguay peer-to-peer marketplace, one listing observed early Thursday offered USDT at 6,942 guaraníes, approximately 13% above the central bank's November 4 reference rate of 6,144 guaraníes per dollar. Tether CEO Paolo Ardoino weighed in on X, writing that "USDt is a lifeline for hundreds millions of people in the world" in response to news of the turmoil.The premium on <a href="https://www.cryptoknowmics.com/news/tag/cryptocurrency-regulation/">stablecoins</a> reflects a pattern common to banking crises: when access to deposits is cut off, demand shifts toward assets that can still move. Whether that demand persists depends largely on how quickly — and how fully — Paraguay's resolution process returns funds to the country's depositors.

Paraguay's President Resigns as Ueno Bank Failure Freezes Deposits for Millions

Searches for &#8216;Binance hacked&#8217; keep spiking. Here&#8217;s what actually happened, how exchange hacks work, and how to protect your crypto holdings.

Searches for "Binance hacked" spike periodically, often driven by social media rumours, price volatility or memories of past incidents. As of today, no new confirmed breach of Binance's core exchange has been publicly disclosed. What the search volume does reflect is a legitimate and recurring question: how secure is the world's largest cryptocurrency exchange, what has actually gone wrong in the past, and what should users do to protect themselves?<h2>What Has Actually Happened to Binance</h2>Binance has been involved in two significant security incidents that are part of the established public record. The first occurred in May 2019, when attackers stole approximately 7,000 Bitcoin from Binance's hot wallet — the portion of funds kept online and immediately accessible for withdrawals. The attackers used a combination of phishing, malware and compromised API keys to bypass two-factor authentication for a targeted group of accounts, then withdrew the funds in a single large transaction designed to pass automated risk checks. Binance covered the full loss through its Secure Asset Fund for Users (SAFU), an emergency insurance reserve funded by a percentage of trading fees.The second and larger incident came in October 2022 and targeted the BNB Chain's cross-chain bridge — a piece of infrastructure that allows assets to move between different blockchains. An attacker exploited a vulnerability in the bridge's proof verification system to mint approximately two million BNB tokens that had not been legitimately deposited. Validators on the BNB Chain network voted to halt the chain temporarily, limiting the amount the attacker could move off-chain. The incident highlighted that bridges, rather than exchange order books, had become a primary attack surface in the broader crypto ecosystem.<h2>Why Exchange Hacks Keep Happening</h2>Understanding why exchanges are targeted requires a basic grasp of how they hold funds. Exchanges maintain two types of wallets: hot wallets, which are connected to the internet and used to process withdrawals quickly, and cold wallets, which are kept offline and used to store the bulk of customer assets. Hot wallets are the primary target because they are reachable over the internet; cold wallets are far harder to access but also slower to use.Beyond wallet architecture, exchanges operate complex software stacks — trading engines, APIs for third-party apps, mobile applications and increasingly, bridges or cross-chain services. Each layer introduces potential vulnerabilities. Smart contracts, which are self-executing programs that govern DeFi protocols and bridges, are particularly attractive targets because their code is public, their logic is complex, and a single flaw can be exploited automatically and at scale before developers can respond. The 2022 BNB Chain bridge incident is one of the clearest examples of this dynamic.Social engineering — tricking employees or users into revealing credentials — remains as effective as technical exploits. The 2019 Binance breach combined phishing with API key theft, meaning the attackers did not need to break Binance's servers directly; they simply obtained legitimate-looking credentials. This pattern has appeared in numerous exchange incidents across the industry.<h2>How Binance Has Responded Over Time</h2>After the 2019 breach, Binance restructured its hot wallet management, tightened withdrawal monitoring and expanded the SAFU fund. The fund, which Binance has periodically topped up, is intended to cover user losses in the event of a security failure — though its coverage relative to total assets under custody has never been independently audited to a standard comparable to traditional financial institutions.The 2022 BNB Chain bridge exploit prompted changes to how the chain's validators coordinate emergency responses, including faster governance mechanisms for halting the network when anomalous activity is detected. Binance has also invested in bug bounty programmes, which pay external security researchers to find and report vulnerabilities before malicious actors do.These responses illustrate a broader pattern in the industry: security improvements tend to follow incidents rather than precede them. That is not unique to crypto — it mirrors how security evolves in traditional finance and technology — but the pseudonymous, irreversible nature of blockchain transactions means that recovery after a theft is far harder than in conventional banking.<h2>What This Means for Crypto Users</h2>The practical implication of exchange security history is straightforward: an exchange holds your funds on your behalf, and if it is compromised, your ability to recover those funds depends entirely on the exchange's insurance reserves, its willingness to compensate users, and in some cases, the intervention of law enforcement. This is fundamentally different from holding assets in a self-custody wallet, where a private key — a unique cryptographic credential — gives only its holder direct control over the funds on-chain.Self-custody is not without its own risks. Losing a private key or seed phrase means permanent loss of access, with no customer support to call. Hardware wallets — physical devices that store private keys offline — reduce the risk of remote theft but require careful physical security. The trade-off is between counterparty risk (trusting an exchange) and personal responsibility risk (managing your own keys).A common approach among experienced crypto holders is to keep only the funds needed for active trading on an exchange, while storing longer-term holdings in a self-custody wallet. This limits exposure to any single exchange's security posture without requiring users to manage keys for every transaction. You can follow the latest developments in <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">cryptocurrency news</a> and <a href="https://www.cryptoknowmics.com/news/tag/cryptocurrency-regulation/">cryptocurrency regulation</a> to stay informed about how oversight of exchanges is evolving globally.<h2>Evaluating an Exchange's Security Before You Use It</h2>Not all exchanges approach security the same way. When assessing an exchange, several factors are worth examining. Does the exchange publish proof-of-reserves reports, which use cryptographic methods to demonstrate that customer deposits are actually held? Does it maintain a publicly disclosed insurance or reserve fund? Has it been independently audited by a recognised security firm? How has it handled past incidents — did it communicate transparently and compensate users promptly?Regulatory status also matters. Exchanges operating under licences from established financial regulators are subject to capital and custody requirements that provide an additional layer of user protection, though the specifics vary significantly by jurisdiction. The <a href="https://www.cryptoknowmics.com/news/tag/cryptocurrency-regulation/">regulatory landscape for crypto exchanges</a> continues to develop, and exchanges operating in well-regulated markets generally face stricter requirements around how they segregate and safeguard customer funds.Two-factor authentication using an authenticator app (rather than SMS, which can be intercepted) and the use of unique, strong passwords for exchange accounts are baseline precautions that reduce the risk of account-level compromise even when the exchange itself is not breached. Whitelisting withdrawal addresses — a feature that restricts withdrawals to pre-approved wallet addresses — adds another barrier against unauthorised transfers.<h2>The Bigger Picture</h2>Binance's security history is not an outlier; it is a case study in the challenges facing any large, centralised custodian of digital assets. The exchange has survived incidents that ended other platforms, in part because of its scale, its reserve fund and its ability to absorb losses. Smaller exchanges have not always been so fortunate, and their failures — from Mt. Gox in 2014 to more recent collapses — have shaped how the industry thinks about custody, reserves and user protection.The recurring interest in searches like "Binance hacked" reflects something real: users are right to ask hard questions about where their funds are held and what protections exist. The answers are not always reassuring, but they are knowable — and understanding them is the first step toward making informed decisions about how to participate in <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">the crypto market</a>.

Has Binance Been Hacked? What Crypto Users Need to Know About Exchange Security

Hackers are using infected websites to install spyware on iPhones that steals passwords and photos. Here&#8217;s what crypto holders need to know and do.

Hackers are exploiting compromised websites to push spyware onto iPhones — and for anyone who manages cryptocurrency on their phone, the implications are serious. Security researchers and journalists reported on October 22, 2026 that hundreds of infected websites are being used as delivery mechanisms for malware capable of harvesting passwords and photos. Because those two categories of data are often all an attacker needs to drain a crypto wallet or exchange account, this threat deserves close attention from anyone who holds digital assets on a mobile device.<h2>How the Attack Works</h2>The attack belongs to a category known as a watering-hole attack: rather than sending phishing emails or fake apps directly to targets, the attacker compromises websites that their intended victims are likely to visit. When an iPhone user browses to one of these sites, malicious code runs in the browser and attempts to install spyware — software designed to operate silently in the background and exfiltrate data from the device.iPhones are sometimes assumed to be immune to this kind of attack because Apple's App Store review process blocks most malicious software. Web-based delivery sidesteps that protection entirely. The browser is a privileged application with access to the network, stored credentials, and in some cases the device's file system, making it a viable entry point even on a locked-down platform. Apple does issue patches for browser-based vulnerabilities, but devices running older versions of iOS remain exposed until users update.Once installed, the spyware reported in this wave is said to be capable of stealing passwords and photos. For a crypto user, those two data types are particularly damaging. Passwords grant direct access to exchange accounts and software wallets. Photos frequently contain screenshots of seed phrases — the 12- or 24-word recovery codes that give complete, permanent control over a self-custody wallet. Unlike a compromised bank account, a stolen seed phrase cannot be cancelled or reversed.<h2>Why Crypto Holders Are High-Value Targets</h2>Cryptocurrency is attractive to thieves for the same reason it appeals to its users: transactions are final, pseudonymous, and not subject to chargebacks or institutional intervention. A thief who gains access to an exchange account or a wallet's private key can move funds to an address they control within seconds, and no bank or regulator can freeze or recover those funds after the fact. This asymmetry — low friction for the attacker, near-zero recourse for the victim — makes crypto users disproportionately valuable targets relative to the effort required.Mobile devices compound the risk because people tend to use them for everything at once: browsing, messaging, authenticating into financial accounts, and storing sensitive files. A phone that holds both an authenticator app and a screenshot of a seed phrase is, in effect, a single point of failure. Compromising it gives an attacker everything needed to bypass two-factor authentication and empty a wallet in one step.<h2>What This Means for Your Crypto Security Posture</h2>The most immediate and effective defense is keeping iOS fully up to date. Apple regularly patches the browser-engine vulnerabilities that web-based malware exploits, and those patches are only useful if installed. Users who have delayed updates — sometimes to preserve compatibility with older apps — should treat this as a prompt to update now.Beyond updates, the following practices meaningfully reduce exposure:<ul> <li>Never store seed phrases as photos or screenshots. Write them on paper and keep that paper offline. A seed phrase captured in your camera roll is one phone compromise away from being stolen.</li> <li>Use a hardware wallet for significant holdings. A hardware wallet — a dedicated physical device that signs transactions without exposing private keys to the internet — is not affected by phone-based spyware. Even if your iPhone is fully compromised, an attacker cannot move funds from a hardware wallet without physical access to the device and its PIN.</li> <li>Treat your authenticator app as sensitive infrastructure. If you use a software authenticator on the same phone you browse with, a successful spyware attack could capture one-time codes in real time. Where exchanges support it, a hardware security key provides stronger protection.</li> <li>Be selective about which websites you visit on a device linked to crypto accounts. Watering-hole attacks rely on victims visiting compromised sites during normal browsing. Keeping a dedicated device — or at minimum a separate browser profile — for crypto activity limits the blast radius of any single compromise.</li> <li>Review app and browser permissions. Spyware often requests access to photos, the microphone, or the clipboard. Auditing which apps have those permissions and revoking unnecessary ones reduces what an attacker can access even if they gain a foothold.</li> <li>Enable lockdown mode for high-risk situations. Apple's Lockdown Mode, introduced in iOS 16, significantly restricts the browser's attack surface by disabling certain web technologies that are rarely needed for everyday browsing but are commonly exploited by sophisticated spyware. It is not necessary for most users day-to-day, but it is worth knowing about for anyone who believes they may be a high-value target.</li></ul><h2>The Broader Pattern</h2>This campaign is part of a longer trend in which attackers have shifted from targeting crypto infrastructure — exchanges, bridges, smart contracts — toward targeting the individual users who hold and move funds. <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">Crypto security incidents</a> increasingly involve social engineering, credential theft, and device compromise rather than protocol-level exploits, because human and device security is often the weakest link in an otherwise robust system.The rise of mobile-first crypto usage has accelerated this shift. As more people manage <a href="https://www.cryptoknowmics.com/news/bitcoin/">Bitcoin</a>, <a href="https://www.cryptoknowmics.com/news/ethereum/">Ethereum</a>, and other assets directly from their phones — using mobile wallets, exchange apps, and browser-based DeFi interfaces — the phone itself becomes the most valuable target an attacker can compromise. Web-based delivery of spyware is effective precisely because it requires no action from the victim beyond visiting a website, and because most users do not expect their browser to be a threat vector on a device they consider secure.The practical takeaway is straightforward: the security model that protects a crypto portfolio needs to account for the device used to access it. Keeping software current, storing seed phrases offline, and separating high-value activity from general browsing are not advanced measures — they are the baseline for anyone who holds assets worth protecting.

How Malicious Websites Can Steal Crypto From Your iPhone

Ireland&#8217;s central bank fined Coinbase Ireland €3.25 million for commingling customer funds and outsourcing compliance to its US parent over a five-year period.

The Central Bank of Ireland fined Coinbase Ireland Limited €3.25 million (approximately $3.6 million) on Thursday, 22 October 2026, for a series of customer fund safeguarding failures that stretched from November 2020 to August 2025. The penalty, which follows a settlement reached the previous day, centres on the Irish subsidiary's failure to keep customer balances properly segregated and its excessive dependence on its US parent to run compliance functions it was required to manage locally.<h2>What the Regulator Found</h2>Coinbase Ireland is an e-money institution — a regulated entity authorised to hold euro and dollar balances on behalf of European customers who use them to buy crypto assets on the Coinbase platform. Under Ireland's Electronic Money Regulations, those balances must sit in dedicated safeguarding accounts, kept entirely separate from corporate funds and from money belonging to customers of other Coinbase entities. The Central Bank identified three core failures.First, Coinbase Ireland placed what the regulator called "excessive reliance" on the US-based Coinbase Group to design and operate its safeguarding controls, without maintaining the local expertise needed to oversee that work. Second, the safeguarding account was underfunded for lengthy periods because of poor system design and weak control testing — coding errors in an internal dashboard left the account short by an average of roughly 0.54% of its total obligation through 2023 and the first half of 2024. Third, the firm had no adequate process to flag material changes in its safeguarding practices to the regulator.That third failure drew the sharpest public response. Karen O'Leary, the Central Bank's director of enforcement, noted that Coinbase Ireland had promised "robust and automated safeguards" when it applied for authorisation in 2019, and that its practices drifted from those commitments without notice. "Failing to adhere to the assurances made during the authorisation process or to inform us of material changes as happened in this case is completely unacceptable," O'Leary said. "Payment and e-money firms have a fundamental obligation to fully safeguard customers' funds. The Central Bank has made its supervisory expectations in this regard clear: we have no tolerance for weaknesses in safeguarding arrangements."<h2>How the Commingling Happened</h2>Coinbase's own post-settlement statement laid out five specific incidents. The most acute arose during the March 2023 US banking crisis: as Silvergate Bank neared collapse, Coinbase Ireland directed 30 customers to deposit dollars into an account held by Coinbase Inc. at a different US bank. Because that account also held funds belonging to customers of a separate Coinbase entity, the deposits were commingled — a direct breach of safeguarding rules.Other problems were more structural. After Brexit prompted the migration of European customers away from Coinbase's UK affiliate, some customers continued sending deposits to the old UK accounts. Euro withdrawals for US and UK customers of other Coinbase units were at times paid out of the Irish safeguarding account for liquidity reasons. A daily internal process moved funds back into the correct account each day, but that did not prevent the initial mixing. Coinbase said it self-reported many of these issues to the Central Bank in January 2024 and resolved most of the underlying control weaknesses that same year.<h2>Penalty Calculation and Next Steps</h2>The Central Bank set the base fine at €4.65 million and applied a 30% discount because Coinbase Ireland agreed to settle rather than contest the findings, bringing the final figure to €3.25 million. The fine and an accompanying formal reprimand still require confirmation from Ireland's High Court before they take full legal effect. The outcome is the regulator's 164th enforcement action, pushing its total lifetime fines past €432 million.Coinbase stressed that no customer suffered a financial loss or was ever unable to access their funds. Since the self-report, the company says it has redesigned its safeguarding calculation methodology, completed two third-party validations with no open findings, posted a €25 million guaranty bond, and appointed a dedicated head of safeguarding.<h2>Context: A Second Major Irish Fine in Under a Year</h2>The action against Coinbase Ireland follows a separate €21.5 million fine the Central Bank imposed on Coinbase Europe in November 2025 for failing to monitor more than 30 million transactions for money laundering and terrorist financing risk — a significantly larger penalty reflecting the scale of those AML obligations. Coinbase Europe's Irish registration subsequently lapsed at the end of 2025 as the exchange relocated its European headquarters to Luxembourg, where it now operates under a MiCA licence issued by Luxembourg's financial regulator. MiCA, the EU's Markets in Crypto-Assets regulation, provides a single passportable licence across EU member states.Taken together, the two Irish enforcement actions signal that the Central Bank is prepared to pursue both conduct-of-business failures and prudential safeguarding shortfalls at crypto firms operating under its supervision — and that the size of a firm's global footprint offers no insulation from local regulatory standards.

Central Bank of Ireland Fines Coinbase Ireland €3.25 Million Over Fund Safeguarding Failures

Fireblocks called a reported $2.5B Visa acquisition &#8216;not true at present time.&#8217; The denied deal would have valued the firm at a steep discount to its 2022 peak.

Fireblocks pushed back on Thursday against a report that Visa is in advanced talks to acquire the crypto custody and infrastructure company for roughly $2.5 billion. "We are aware of the rumors about a possible acquisition of Fireblocks by Visa. This is news to us, and not true at present time," a Fireblocks spokesperson said on October 22. Visa, for its part, said it does not comment on "rumors or speculation."<h2>What the Report Claimed — and Why the Price Raised Eyebrows</h2>The acquisition story originated from a report citing multiple sources that described the two sides as close to a deal. At $2.5 billion, the price would represent a sharp markdown from the valuation Fireblocks last disclosed publicly: more than $8 billion, established when the company raised $550 million in a Series E funding round in January 2022, near the peak of the venture capital cycle for crypto. That gap — more than 68% below the 2022 figure — reflects how dramatically private-market valuations in the sector have compressed since then.Fireblocks provides the custody and settlement plumbing that banks, exchanges and fintech firms use to hold and move digital assets. Its customers include BNY Mellon, Worldpay, Revolut and Galaxy, and the company says it has secured trillions of dollars in transfers across more than 150 blockchains. It also powers institutional bitcoin trading for FIS, underpins BNP Paribas's digital asset custody operations, and is a founding member of the Botanix federation, a bitcoin sidechain project.<h2>A Rumor With a Plausible Backdrop</h2>Even if the specific talks are denied, the broader context makes the speculation understandable. Payment incumbents spent much of 2026 acquiring or partnering with companies that manage stablecoin and crypto rails rather than building that capability internally. Mastercard agreed in March to buy BVNK — a stablecoin payments platform — for up to $1.8 billion, closing the deal in August and securing a New York BitLicense in the process.Visa has been moving in a similar direction. In August, it partnered with Zerohash to add stablecoin funding and payouts to Visa Direct, its real-time money movement network. By September, Visa reported that its stablecoin settlement volume had surpassed a $20 billion annualized run rate — more than 15 times the level from the prior year. Both Visa and Mastercard also joined a coalition of more than 140 companies behind Open USD, a dollar-denominated stablecoin designed to distribute the economics of a market dominated by Tether and Circle.Fireblocks itself has been building out its stablecoin footprint. The company launched a stablecoin payments network in September 2025 with more than 40 participants, including Circle, Bridge, Zerohash and Yellow Card, and has since rolled out acceptance tools for neobanks and a settlement suite aimed at AI agents.<h2>Founded by Cybersecurity Veterans</h2>Fireblocks was founded in 2018 by Michael Shaulov, Pavel Berengoltz and Idan Ofrat, three veterans of the Israeli cybersecurity industry. The company's core product — secure multi-party computation for digital asset custody — has made it a standard piece of infrastructure for institutional crypto operations globally.<h2>Where This Sits in the Broader M&amp;A Picture</h2>If a deal at $2.5 billion had materialized, it would have ranked among the largest acquisitions in <a href="https://www.cryptoknowmics.com/news/cryptocurrency-news/">crypto industry</a> history, though still behind Coinbase's $2.9 billion purchase of derivatives exchange Deribit in 2025 and Naver Financial's pending $10.3 billion deal for Upbit parent Dunamu. The denial closes the door for now, but Fireblocks' strategic position — sitting at the intersection of institutional custody, stablecoin infrastructure and payments — means it is likely to remain a target of interest as traditional financial firms deepen their digital asset commitments.

Fireblocks Denies $2.5B Visa Acquisition Report as Valuation Gap Draws Attention

Elon Musk confirmed SpaceX and Tesla have formed independent merger committees. A deal would combine 30,221 BTC across both companies&#8217; treasuries.

Elon Musk confirmed on Tuesday that SpaceX and Tesla are formally exploring a merger, with both companies having established special committees of independent directors to assess a potential combination. Speaking during SpaceX's third-quarter earnings call on October 21, Musk said he personally supports the idea but acknowledged that the decision ultimately rests with shareholders — and that the committees have not yet reached agreement on any terms.<h2>What a Merger Would Combine</h2>Beyond the operational implications of uniting a private space company with a publicly traded electric-vehicle maker, a merger would consolidate two of the largest known corporate <a href="https://www.cryptoknowmics.com/news/bitcoin/">Bitcoin</a> treasuries. SpaceX holds a reported 18,712 BTC and Tesla holds 11,509 BTC, for a combined total of 30,221 BTC. A single entity controlling that position would rank among the largest known corporate holders of the asset.The structural complexity of any deal is significant. Musk owns approximately 36% of SpaceX outright — rising to 48.4% when restricted shares and unexercised options are included, according to a June filing — while his reported beneficial ownership of Tesla stands at 19.8%, including restricted compensation shares. Those overlapping stakes are precisely why he is barred from the committee process.<h2>Musk's Role — and His Limits</h2>Musk was candid about his constrained position. His interests in both companies create a conflict that requires the independent committees to negotiate without his direct involvement — a standard governance safeguard in related-party transactions. He was clear that his own view is favorable: "Do I think it would be a good idea, yes. But at the end of the day, the shareholders have to be supportive of this." He also confirmed that "the special committees have not reached agreement on the terms of any transaction," and no timeline for a decision has been disclosed.<h2>What This Means for Bitcoin Markets</h2>Corporate Bitcoin holdings have become a meaningful signal for institutional sentiment toward the asset. Whether a combined company would maintain, expand or reduce a 30,221 BTC position would depend on treasury policy decisions made post-merger — none of which have been discussed publicly at this stage. The announcement comes ahead of Tesla's own quarterly earnings, due after the market close on Wednesday, October 22, with analysts forecasting revenue of $28.13 billion and adjusted earnings of 44 cents per share.<h2>Governance and What Comes Next</h2>The use of special committees of independent directors is a standard mechanism in transactions where a controlling or major shareholder sits on both sides of a deal. Their purpose is to evaluate whether a transaction is fair to all shareholders, not just the largest ones. Until those committees reach a conclusion and present terms, the merger remains a possibility under study rather than a plan in motion.SpaceX is a private company, which adds a layer of complexity: any merger with the publicly listed Tesla would require navigating disclosure requirements, valuation disputes and shareholder votes on Tesla's side. The most contentious element in any such deal is typically agreeing on a valuation framework for the entity that lacks a public market price — a question the committees have yet to resolve.

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