Crypto News Today: Stunning US Bank Charter, China Crackdown, and Massive ETH Liquidation Rock Markets

July 19, 2025 – The cryptocurrency landscape experienced seismic shifts today as three major developments converged, sending ripples through global markets and regulatory frameworks. From a groundbreaking banking approval in Washington D.C. to a stringent regulatory crackdown in Beijing and a massive asset liquidation affecting Ethereum’s price, today’s crypto news underscores the sector’s volatile and rapidly evolving nature. These events collectively highlight the ongoing tension between financial innovation, government oversight, and market stability in the digital asset space.

Crypto News Today: Erebor Bank Secures Historic US National Charter

The United States financial system witnessed a landmark event as the Office of the Comptroller of the Currency (OCC) granted a national bank charter to Erebor Bank. This approval marks the first new national bank charter issued during President Donald Trump’s second term, signaling a potentially more accommodating regulatory environment for cryptocurrency-integrated financial institutions. According to the Wall Street Journal, which first reported the story, Erebor Bank launches with approximately $635 million in capital from a consortium of prominent technology investors.

These investors include Andreessen Horowitz, Founders Fund, Lux Capital, 8VC, and investor Elad Gil. The bank specifically aims to serve technology startups, venture-backed companies, and high-net-worth individuals—a market segment that faced significant disruption following the 2023 collapse of Silicon Valley Bank. Significantly, the project was founded by Palmer Luckey, co-creator of the Oculus virtual reality system, who will serve on the board but not manage daily operations. This move represents a strategic effort to bridge traditional banking services with the needs of the digital asset economy, potentially creating a new model for crypto-friendly financial infrastructure in the United States.

Context and Market Implications

Historically, cryptocurrency companies have struggled to secure reliable banking partnerships in the U.S., often relying on a small number of sympathetic institutions or operating in regulatory gray areas. The OCC’s approval of Erebor Bank could establish a precedent for other crypto-native financial entities seeking formal integration into the national banking system. Analysts suggest this development may encourage further institutional investment into cryptocurrency by providing a regulated, FDIC-insured custodial and transactional framework. However, the bank must still navigate ongoing regulatory scrutiny concerning anti-money laundering (AML) and know-your-customer (KYC) compliance specific to digital asset transactions.

China Escalates Crypto Crackdown with Stablecoin and RWA Ban

In a decisive regulatory move, the People’s Bank of China (PBOC), alongside seven other Chinese regulatory bodies, issued a joint statement formally banning the unapproved issuance of yuan-pegged stablecoins and tokenized real-world assets (RWAs). The announcement explicitly prohibits any entity or individual, whether operating domestically or internationally, from creating or distributing Renminbi-linked stablecoins without explicit regulatory approval. This policy effectively closes a perceived loophole where offshore entities might have issued yuan-pegged digital assets accessible to Chinese users.

The regulatory statement also formally incorporates RWA tokenization—the process of converting rights to physical assets like real estate or commodities into digital tokens on a blockchain—into China’s existing financial risk framework. Authorities characterize the unauthorized conversion of real assets into tradable tokens as potentially illegal financial activity. This action aligns with China’s broader strategy of containing speculative digital asset trading outside its formal financial system while simultaneously promoting the state-controlled digital yuan (e-CNY). The following table summarizes the key prohibitions:

Global Regulatory Divergence Becomes Clearer

China’s latest action creates a stark contrast with regulatory approaches emerging in other jurisdictions. While the U.S. moves toward integrating crypto services via chartered banks, and regions like the European Union implement comprehensive frameworks like MiCA (Markets in Crypto-Assets), China continues its policy of containment and control. This divergence forces global cryptocurrency projects to adopt increasingly localized strategies, potentially fragmenting the market. The ban specifically on RWAs is particularly significant, as this sector has seen rapid growth elsewhere, with institutions tokenizing everything from U.S. Treasury bonds to fine art.

Trend Research Liquidates Over 400,000 ETH Amid Market Plunge

Blockchain data revealed substantial selling pressure in the Ethereum market as investment vehicle Trend Research executed a series of large-scale transfers to cryptocurrency exchange Binance. According to analytics platform Arkham, Trend Research moved 411,075 ETH to the exchange since the beginning of the month. The entity’s holdings of Aave-wrapped Ether (AETHWETH) plummeted from about 651,170 ETH on Sunday to approximately 247,080 ETH by Friday, representing a liquidation of over 404,090 ETH.

This sell-off coincided with a sharp decline in Ethereum’s market price, which dropped nearly 30% over the past week to a low of $1,748 on Friday, as reported by CoinMarketCap. At the time of writing, ETH traded at $1,967. The liquidation appears linked to a deleveraging process, as Trend Research used its ETH holdings as collateral on the Aave lending protocol to borrow stablecoins, which were then reportedly used to acquire more ETH—a common but risky strategy to amplify returns.

• Entity: Trend Research, tied to Jack Yi, founder of Hong Kong-based Liquid Capital.
• Action: Transferred 411,075 ETH to Binance over several days.
• Result: Reduced Aave collateralized position by over 400,000 ETH.
• Market Context: ETH price fell ~30%, likely triggering collateral calls.
• Strategy: Employed recursive borrowing against ETH collateral to increase exposure.

DeFi Leverage and Systemic Risk Considerations

The situation with Trend Research highlights the inherent risks of highly leveraged positions within decentralized finance (DeFi) ecosystems. When asset prices fall significantly, leveraged entities face margin calls or automatic liquidations, which can exacerbate market downturns through forced selling. This event serves as a real-time case study in the volatility and interconnected risk present in crypto markets, particularly when traditional leverage strategies meet the transparent but unforgiving nature of blockchain-based lending protocols. Market observers will monitor whether this liquidation triggers further cascading effects across other leveraged positions in the DeFi space.

Conclusion

Today’s crypto news paints a picture of an industry at a complex crossroads. The United States’ approval of Erebor Bank suggests a path toward regulated integration for digital assets within traditional finance. Conversely, China’s expanded ban reinforces a strategy of strict isolation and control. Meanwhile, the market itself demonstrated its fragility as large, leveraged positions unwound, contributing to significant price volatility for Ethereum. Collectively, these developments underscore that the trajectory of cryptocurrency will be shaped not just by technological innovation, but equally by regulatory decisions, institutional adoption, and the management of financial risk. For investors and observers, staying informed on such multifaceted crypto news today is essential for navigating this dynamic and uncertain landscape.

FAQs

Q1: What does Erebor Bank’s national charter mean for crypto in the U.S.?
The charter allows a crypto-focused bank to operate nationwide under OCC supervision, potentially easing banking access for crypto businesses and signaling regulatory openness for integrated digital asset services within the traditional financial system.

Q2: Why did China ban yuan-pegged stablecoins and RWAs?
Chinese regulators aim to maintain strict control over monetary policy and capital flows, prevent unauthorized financial activity, and promote the state-backed digital yuan (e-CNY) by eliminating competing private digital assets linked to the Renminbi.

Q3: How did Trend Research’s ETH liquidation affect the market?
The large-scale transfer of over 400,000 ETH to an exchange created significant selling pressure, contributing to Ethereum’s price decline of nearly 30% over a week and highlighting the risks of leveraged DeFi strategies during market downturns.

Q4: What is the difference between the U.S. and Chinese approaches to crypto regulation?
The U.S. appears to be moving toward a framework of regulated integration (exemplified by the bank charter), while China is enforcing a policy of containment, banning most private crypto activities to bolster its sovereign digital currency.

Q5: What are Real-World Assets (RWAs) in crypto?
RWAs are tokenized digital representations of physical or traditional financial assets (like real estate, bonds, or commodities) on a blockchain. They aim to improve liquidity and accessibility but now face explicit restrictions in markets like China.