Weekly Recap: Ethereum Restructures, Strategy Melts Down, and the CBDC Ban Clears Congress

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Ethereum Foundation Restructures, Ethlabs Spins Out

The Ethereum Foundation announced it was cutting roughly 20% of its staff and slashing its budget by 40% Monday, its most sweeping reorganization in years. Interim leadership released an execution plan focused on MEV elimination, default user privacy, and paying contributors in ETH rather than fiat.

The same morning, five former EF researchers launched Ethlabs, a separate non-profit R&D lab for consensus, cryptography, and execution-layer research. Funders told The Defiant by Tuesday that Ethlabs would overlap deliberately with the EF and was designed to pull from its "densest talent." Ethereum now has two non-profits steering its R&D; the question for the next cycle is whether they converge on a shared roadmap or drift into parallel tracks.

CBDC Ban Clears Congress, Then Stalls at the White House

The Senate passed a housing bill containing a Fed CBDC ban through 2030 in an 85-5 vote Monday, one of the widest bipartisan margins a crypto-adjacent bill has cleared. Congress sent the bill to Trump. Trump then blocked the signing, demanding voter ID provisions be added first. The CBDC ban is now stalled on an unrelated political fight.

The CLARITY Act kept moving in parallel. The White House is negotiating an ethics deal with Senate Democrats to advance the market-structure bill. Senator Lummis set July as the floor vote deadline, telling JPMorgan's CEO to read the bill. The House scheduled a July field hearing. Opposition came from an unexpected corner: nearly 100 Catholic leaders filed opposition over trafficking safeguard provisions.

Strategy's Meltdown

Strategy's stock fell below $100 for the first time since 2024 as analysts picked apart its leveraged Bitcoin bet. STRC preferred shares hit record lows and slipped below par by week's end. A securities probe landed on the company Friday, and executives issued coordinated investor reassurances on the way down.

The week's collapse puts the leveraged-BTC-treasury playbook, which dozens of companies replicated from Strategy, under its sharpest stress test yet.

Prediction Markets: Fake Bets, Meta's Arena, and Kalshi's $40B Bid

The week opened with the Wall Street Journal reporting $1.9 million in fake bets had propped up Polymarket creator videos. By Friday, bipartisan senators were pressing the CFTC to disclose whether it was investigating. Zuckerberg ordered Meta to build a standalone prediction market app codenamed Arena and urged it to explore direct partnerships with Polymarket and Kalshi. The CFTC sued Kentucky to defend its exclusive jurisdiction over prediction markets, its ninth such action. Kalshi said it was seeking a $40 billion valuation, seven weeks after closing at $22 billion.

The Senate fight over CFTC authority split along party lines by week's end: 17 Democratic senators moved to bar the CFTC from funding its state-level prediction market lawsuits, pushing back against the same agency that some of their colleagues were simultaneously pressing to investigate Polymarket.