What has been happening this week in the world of blockchain and cryptocurrencies? Current events and background reports in our weekly review.
Selected articles of the week:
Index provider MSCI has adopted new rules for companies with little operating business. As a result, Strategy and Metaplanet, both large Bitcoin holders, could drop out of its global equity indices. This matters, because passive funds worth billions track these indices and automatically sell removed stocks. The review has two stages. First, MSCI checks whether operating assets exceed half of the balance sheet. If a company fails, MSCI also applies five financial ratios. However, existing index members only drop out if they fail in both of their last two annual reports. MSCI will name the companies affected in November, effective from December. Strategy estimates that MSCI-linked funds hold around 3.1% of its shares. An exclusion would not force the company to sell Bitcoin. Nevertheless, weaker demand for the stock would make further Bitcoin purchases harder to finance. Strategy criticizes the rule as discriminatory toward companies with crypto reserves.
MSCI has finalized rules for non-operating companies under which Strategy and Metaplanet could drop out of its global indexes from December.
Turkish media report arrest of HEX founder Richard Heart
According to Turkish media, authorities in Istanbul have arrested Richard Heart, founder of the controversial crypto projects HEX and PulseChain. The reports say officers also seized weapons, dozens of luxury watches and cash. The arrest rests on an Interpol notice that Finland requested in December 2024. Finnish police are investigating suspected tax evasion, which Europol, the EU police agency, puts at hundreds of millions of euros. In addition, investigators accuse him of assaulting a 16-year-old. Some reports cite crypto fraud as the reason for the arrest, although Finland makes no such allegation. However, the Interpol notice is not an international arrest warrant. It merely asks authorities to locate a person and arrest them provisionally. Therefore, Turkey decides on any extradition itself. So far, there is no public record of a request from Finland. Until a verdict, the presumption of innocence applies to Heart.
Turkish media report that Istanbul authorities arrested Richard Heart on a Red Notice requested by Finland, while official confirmation is still pending.
RippleX quietly closes decade-old XRP vulnerability
RippleX, Ripple’s development arm, has fixed an XRP Ledger flaw that likely dated back to 2015. The XRP Ledger is the blockchain behind the cryptocurrency XRP. When matching payments against offers, the software added amounts without an overflow check. Very large sums therefore wrapped around to a small number. Sellers would have received the full amount, but the buyer would have paid only the small sum. As a result, the difference would have emerged as new XRP. According to the researcher who reported it, one transaction could have created around 18 trillion. That would have devastated the cryptocurrency. However, there is no evidence of exploitation. Normally, rule changes need over two weeks of approval from the network’s validators. In contrast, the fix took effect immediately with each server update. In addition, RippleX only published the source code about two weeks later, keeping attackers from finding the flaw early.
RippleX has fixed an XRP bug that had likely been in the XRP Ledger code since 2015 and could have created XRP beyond the total supply.
Kraken secures an EU banking license with Saldo Bank
Payward, the parent company of US crypto exchange Kraken, is buying Lithuania’s Saldo Bank. According to the Financial Times, Payward would be the first crypto firm to buy a bank in Europe. Saldo Bank is small, with total assets of EUR 163.9 million at year-end 2025. However, the decisive factor is the banking license, which Payward has so far lacked in the EU. Kraken currently operates there as an e-money institution, which may not take deposits. A bank, by contrast, may do so. Moreover, a license from one EU country lets it operate in other member states without further approval. After closing, Payward plans to offer interest on deposits, loans and cards in Europe. Customers should be able to borrow against their assets instead of selling them. However, Payward did not disclose a purchase price. Regulators must also approve the deal, and Payward expects closing in 2027.
Payward is acquiring Lithuania’s Saldo Bank, giving the Kraken group an EU banking license with deposit-taking once the deal closes in 2027.
Crypto firms face subpoenas after the US midterm elections
In addition: in November, the US will elect the entire House of Representatives and part of the Senate. Polls see the opposition Democrats as favorites in the House and slightly ahead in the Senate. Whoever wins a chamber chairs its committees and can subpoena witnesses. However, the Democrats could hardly stop the loosening of rules for banks and crypto firms under President Donald Trump. This is because it runs through agency decisions, and new laws would fail against the president’s veto. The pressure would therefore come through hearings that agency heads and company executives would have to attend. According to lawyers, negative headlines do more damage than legal costs. Moreover, media reports say Democrats are planning investigations into the Trump family’s crypto ties.
A Democratic win in the midterms would hardly stop deregulation, but it would bring crypto firms and banks subpoenas and hearings.
