Digital Asset News: Banks fighting crypto vs. banks joining it, plus wrench attack warning
A solo commentary episode from the Digital Asset News channel covering two contrasting bank responses to crypto, several positive industry developments, and a security warning for crypto holders.
Summary
The host of Digital Asset News presents a split-picture of the banking world's response to crypto: the Independent Community Bankers of America suing the OCC over crypto trust charters, versus BNY Mellon actively pursuing an infrastructure partnership with Kraken. He argues the fighting banks are on the wrong side of history, drawing parallels to the taxi industry's failed battle against Uber. The episode also covers a Pepe memecoin ETF filing amendment, Near Protocol's successful recovery of $3.8 million stolen in a hack, and a serious warning about "wrench attacks" — physical assaults targeting known crypto holders — illustrated by a British man's account of being beaten with hammers in front of his pregnant wife.
Key Takeaways
FULL TRANSCRIPT
Banks Fighting Crypto vs. Banks Joining It
It always surprises me how large organizations get in front of a train that is moving super fast, when all they really should do is get out of the way and let things happen. What we're talking about today is banks — and there's a dichotomy, a split between banking organizations. On one side are those actively trying to suppress things, which is their right in a free country. On the other side are banks saying, "You know what, this is going to be the future. Let's just do this."
It reminds me of an old saying: first they ignore you, then they laugh at you, then they fight you, then you win. We are essentially in that third phase where they are fighting and fighting and fighting. I have to tip my hat to the banking organizations and Elizabeth Warren — good job working together to dismantle the Clarity Act. But it really doesn't matter in the long run because there is an inevitability about what's happening.
Here is what we have: one bank fighting tooth and nail, and another bank saying, "You know what, we want to be a part of this because we want to be a part of the future, not the past."
Independent Community Bankers of America Sue the OCC
A bank group is suing the US regulator over granting crypto trust charters. This is a big deal for smaller and even medium-sized banks. They say, "If we get all these different players coming in offering this type of yield and this type of 24/7, 365 access — no more banking hours — that's going to put us out of business." That's how technology works.
What they're doing is not suing the independent crypto digital asset charters directly. They're going after the OCC — the Office of the Comptroller of the Currency. The Independent Community Bankers of America sued the OCC, accusing the regulator of overstepping its legal authority. Specifically, they say the agency is pushing sweeping new powers to charter national trust banks that are not authorized by the National Bank Act, and that it is letting these companies into the US banking system without subjecting them to the same level of regulatory oversight that community banks face — putting those small banks at a severe competitive disadvantage.
Now, I have no problem with a degree of regulation. If we'd had a little more regulation, maybe we wouldn't have had FTX. Maybe we wouldn't have had Celsius. Maybe we wouldn't have had all the different collapses. And maybe if they had allowed the Clarity Act to move forward, we could have been moving forward without these issues. These are the types of problems that need to be worked out in the court system.
As a pushback from the OCC's side — they have been granting a steady stream of trust charters to crypto firms. However, those companies operating under trust charters don't operate under the same business model or intend to offer the exact same services as typical community banks. For instance, they don't offer the same kind of cash deposit accounts for which FDIC insurance is designed and required.
When I look at this, it seems to me to be banks saying, "We don't want this. This is awful. We're going to get shut down. We need to get in front of this as soon as possible and keep everything the way it was." That never works. Just look at the taxi industry as they fought Uber. Back in April 2017, they went against Uber and then Lyft, arguing there were major safety and efficacy problems with ride-share apps, and that the taxi service needed to get in front of it to keep things the way they'd always been. We all know how that went.
BNY in Talks with Kraken
So you've got banks on one side that just do not want to move — and that's fine — but I'm telling you, you're going to get left behind by banks like BNY.
BNY Mellon, or Bank of New York Mellon, now just called BNY, has $62.6 trillion in assets under custody or administration and $2.2 trillion in assets under management. To be clear: when I talk about BNY getting into the digital asset space — which they've been doing and are now pushing even further — don't assume all $2.2 trillion is going straight into crypto right away. That's not how it works. It's going to be a slow process. But you can see who is getting in front of things and wants to be part of the future, versus who wants to remain in the past.
BNY is in talks with Kraken — my favorite exchange for buying altcoins — specifically with Kraken's parent company Payward, over infrastructure partnerships. The potential agreement could span digital asset custody, trading, payments, and other financial market infrastructure. And as I've said, you're going to keep hearing two things this cycle: payments and tokenization of real-world assets. That's the next narrative moving forward. I'll add a third: AI agent spending — but it still comes back to spending and payments.
A deal with BNY would further Payward's push to connect its digital asset operations with established financial institutions. BNY provides custody, asset servicing, clearing, and wealth management services to institutional clients. Additionally, NASDAQ Ventures agreed last month to invest $100 million in Payward at a $21 billion valuation, while expanding collaboration on tokenized equities. Again — same themes, time and again. Look to see where the winners are going. Try to figure out where the hockey puck is going and move accordingly.
Pepe Memecoin ETF Filing Amended
This comes from Eric Balchunas, Senior ETF Analyst at Bloomberg — and I'm not making this up. Canary just amended their Pepe ETF filing. Apparently there's going to be an ETF for Pepe — yes, the memecoin. It's moving through the process, and while I don't know exactly when it gets approved by the SEC, they've amended some things and are pushing forward.
As a reminder, Pepe is sitting around number 58 by market cap and has done a 6,500% increase since its launch in 2023. Does this mean it's the next big thing? That's not what I'm saying. I'm just saying that when you start seeing ETF filings for memecoins, maybe the bull run is coming a little faster than you think.
Near Protocol's Intents Layer Recovers $3.8 Million from Hackers
On the topic of AI payment systems — and this comes back to Near Protocol, which I believe is around the top 20 to 25 — they are betting big on the AI economy, and with good reason. They have a transaction layer for the AI economy called Intents. Just a couple of days ago, that layer was hacked for $3.8 million.
This was one more hack in a long list across various chains, but this one is different: they got all the money back. Let me say that again — Near Intents got hacked for $3.8 million, and they got it all back. They publicly shamed the hackers and said, "We know exactly who you are. You have 24 hours to return the funds or we go public, run a full investigation, and expose you." And the hackers gave it all back.
This is from Alex Shevchenko, who is part of the Near Intents program. He stated: "Funds from the $3.8 million Near Intents hack were sent back in full. We are stopping the investigation. Please use bug bounties instead of disrupting the services."
Congratulations to that team. I am so tired of hearing about hacks, scams, social engineering, and people losing their life savings. When something actually positive happens, I want to bring it forward.
Near Protocol — sitting around number 22 — is something worth looking into. It has the tokenization narrative, the payments narrative, and the AI narrative. Is it the end-all be-all? I'm not sure. But it does a heck of a lot more than about 99% of all the protocols out there.
Wrench Attacks on Crypto Holders Are Rising
Now, because I can't just give you sunshine without something to think about — it's not how much you make, it's how much you keep. And this can happen to anybody.
Wrench attacks are on the rise. A British man and his pregnant wife were brutally attacked by three masked men who were being directed remotely by someone on a cell phone who knew about their crypto. This has happened multiple times. Someone knows you hold crypto or digital assets — somehow through the dark web or other means — they hire thugs, offer them a cut, and send them in. The person on the phone can't be tracked. He's got a burner phone.
Here is the account from the victim himself:
"The second we shut the door, three people got out of that car. The door got pushed open. I could see gloves coming in, balaclavas. Straight away I'm fighting. I'm pushing. I don't know what's going on. The first one that came in, I managed to punch him. He went straight to the floor. At this point, the second one had pushed my wife onto the sofa. He's got a pillow over her face. He's literally suffocating her on the sofa. She's seven months pregnant. I can hear her screaming. The first one I hit got off the floor. I saw him pull a hammer out of his pocket and he just swung it sideways straight through my forehead. Both of them kneeled on top of me and both just started smashing with hammers — my face, the back of my head, my ribs, my knee. And then one said to me, 'Give me your phone.' He clicked on a wallet with a lot of funds in it. And he said, 'We're not leaving till you transfer me that money.'"
Could this happen to you? Chances are relatively low — this doesn't happen to every single person. But what if it does? It doesn't matter if you've got billions; someone can come in and take it very easily.
I'm begging everybody: if you're going to diversify your assets, diversify your cold storage. Your options include Tangem — one of my favorites — Ledger, not my favorite but I still use it, and Trezor, among others. You can also go into ETFs, because not your keys, not your problem. And there are custody solutions that, if someone tries to get your funds out under duress, are difficult enough to access that it becomes nearly impossible when someone has a gun to your head. That kind of friction is actually a feature in this context.
This happens. I'm just trying to protect everybody as best I can.
Q&A
On AI agents and hallucinations: Darth Mic made a great point — AI is prone to hallucinations and delusions, so 24/7 trading with AI agents could end up with some interesting results, especially if institutions start relying on AI agents rather than humans. That's something I think about too. When you give AI total autonomy over your funds with no guardrails, it can go outside of what it was supposed to do. I'm not comfortable with that for massive trades. For something like a strategy that makes small, infrequent trades focused mostly on protecting the downside — not scalping 10 to 20 trades a week — I can see it working.
My bigger question is how this affects the markets themselves when you've got all these bots competing against each other, running up prices, and then human traders look at that volume and think it's legitimate signal. Before you know it, you've got data that looks real but could be a bot playing 3D chess — running up longs, then shorting everything. I don't know how it's going to play out, and it makes me nervous. That's part of why I prefer a buy-and-hold strategy alongside a few trusted indicator tools.
On using AI to track down hackers: A1 asked why we couldn't use AI agents specifically to track down hackers and recover stolen funds. Honestly, I don't see why not. What I don't understand is why companies that get hacked and claim to be on the frontier of the next big economic boom aren't using AI to protect themselves. I run Claude roughly once a week on all my different websites to check for vulnerabilities and anything odd going on. It does a great job — it'll flag something and say, "You need to change this," and I just tell it to fix it and it does. At some point maybe it becomes Skynet and burns everything to the ground, but we heard the same thing about computers when they first came out.