The European Central Bank (ECB) issued a call for expressions of interest to participate in the Pontes market contact group, which will support and facilitate active dialogue with the market regarding the Pontes project to enable distributed ledger technology transactions to be settled in euro using central bank money. The ECB is inviting financial market stakeholders to express formal interest in contributing to the Pontes project and its pilot phase. Applications are due August 29, with the group planning to commence work in October.

Tornado Cash co-founder Roman Storm’s trial began on Tuesday, with federal prosecutors arguing that Storm knew Tornado Cash was facilitating criminal activity but failed to implement any internal controls or AML programs. Counsel for Storm is arguing that he had nothing to do with North Korean cybercriminals and others who used the crypto mixers to launder more than $1 billion in ill-gotten gains. They told the jury that Storm had no control over crypto deposited into the mixer, which did not collect any fees for the transactions.

The Justice Department announced that the Drug Enforcement Administration (DEA) seized over $10 million in crypto linked to the Sinaloa cartel during operations in Florida. The seizure was part of nationwide operations that netted 44 million fentanyl pills, 4,500 pounds of fentanyl powder, and nearly 65,000 pounds of methamphetamine since January, according to a statement from DOJ. The Sinaloa cartel is one of six Mexican drug trafficking organizations labeled as global “terrorist” groups by the US government.

The Justice Department and the CFTC sent formal letters to Polymarket, notifying the crypto-betting platform that a pair of investigations into the company are being shut down. Polymarket CEO Shayne Coplan confirmed reporting that DOJ has ended an eight-month-long probe into the company, though it was not immediately clear what investigators were looking for. Polymarket allows users to bet on the outcome of elections, sporting events, court cases, and other events. The company operates on the ETH blockchain and predictions are made in stablecoins.

The Senate Agriculture Committee held a hearing on federal oversight of digital commodities, during which members discussed the role of the CFTC in regulating the spot trading of digital commodities and the need for a regulatory framework. The Committee received testimony from former CFTC chairs Timothy Massad and Rostin Behnam, former CFTC commissioner Walt Lukken, and witnesses representing the Crypto Council for Innovation and the National Futures Association.

Sens. Ted Budd (R-NC) and Mike Lee (R-UT) reintroduced the Keep Your Coins Act (S. 2284) to protect the right to self-custody and ensure the federal government cannot infringe upon an individual’s right to control their digital assets. Specifically, the bill aims to prevent the federal government from having access to and surveillance of transactions in the digital asset ecosystem by prohibiting any federal agency from promulgating a rule that would impair an individual's ability to act as a self-custodian, protect an individual's right to conduct peer-to-peer transactions, and empower individuals to maintain control over their digital assets through self-hosted wallets.

House Republicans are also scrambling to gain Democratic support for the CLARITY Act, as some key Democrats who have long supported the industry say they are planning to vote against the bill due to concerns around President Trump’s ties to the digital asset industry. House Minority Whip Katherine Clark (D-MA) sent a notice to Democrats sharply criticizing both the market structure and stablecoin bills, but did not tell members how to vote.

House conservatives tanked a procedural floor vote to advance the three crypto bills up for consideration this week. 13 Republicans voted against moving forward with the package, arguing that the Senate is unlikely to pass a bill banning CBDCs and that such a requirement should be combined into the GENIUS Act. President Trump announced on Truth Social later in the evening that he had met with the group and convinced the holdouts to vote in favor of the rule. The House is expected to hold another procedural vote today.

New Financial Stability Board (FSB) Chair Andrew Bailey submitted his first letter to G20 Finance Ministers and Central Bank Governors, outlining his priorities for the FSB, including assessing the increasing role of stablecoins for payment and settlement purposes. His priorities primarily surround enhancing surveillance capabilities, addressing key risks to financial stability, and strengthening the effectiveness of the FSB. His term as chair began on July 1, and the G20 Finance Ministers and Central Bank Governors are scheduled to meet July 17 - 18.