Hedge funds are rapidly unwinding their bearish Yen bets following US-Japan FX intervention: Leveraged funds cut their net short Yen positions by -74,440 contracts, to 63,600 contracts, over the 5 weeks ending August 4th, according to CFTC data. This was one of the sharpest reductions in short positioning since the 2008 Financial Crisis. At the end of June, leveraged funds held 138,000 net short contracts, the largest short position since 2007. This comes as Japanese authorities purchased ~$85 billion worth of Yen between July 30th and 31st to prop up the currency, the largest 2-day currency intervention since 2011, when Japan intervened in the aftermath of the tsunami that caused the Fukushima nuclear disaster. This also marked the first coordinated action between Japan and the US in 15 years, after the Yen weakened to its lowest since 1986. Historic intervention is changing FX market dynamics.

Leverage is rapidly unwinding across Chinese stocks: Margin debt on the Shanghai and Shenzhen exchanges fell -2.8% on Friday, or -$11.7 billion, to $405 billion, the largest daily decline since January 2016. This also marks the 4th consecutive daily decrease, totaling -$36.9 billion. This comes as the Star 50 Index, which tracks Chinese technology stocks, plunged -7.1% on Friday, its 2nd-largest daily drop this year, while the CSI 300 fell -3.6%. Memory chip stocks were at the center of the selloff after attracting the highest levels of margin borrowing. As a result, their sharp selloff triggered margin calls, forcing investors to sell and accelerating the broader market decline. Chip stocks have become a global amplifier of market volatility.

A massive leverage unwind is underway in semiconductor ETFs: Assets under management (AUM) in US leveraged semiconductor ETFs have dropped -$63 billion from the June peak, to $100 billion, the lowest since late April. This marks a -39% decline, the largest drawdown since April 2025, when assets more than halved from their August high. This also accounts for 63% of the -$100 billion decline in AUM across all US leveraged ETFs over the same period. The selloff came after assets in these funds nearly tripled between the last week of March and their June peak. Even after this sharp unwind, leveraged semiconductor ETF assets remain +400% above January 2023 levels. Investors are aggressively cutting leverage.

Community Update – Strategy Unwinding Progress Dear Community, We would like to provide you with a transparent update on the progress of the strategy unwinding process. As of today, we have successfully received USD 14.97 million, with USD 6.95 million remaining outstanding. To ensure full transparency, we are displaying the progress of incoming transfers on our Proof of Reserve (POR) Dashboard using live UETR payment tracking provided by the originating bank. The Accountable dashboard reflects the same underlying progress, although updates may appear with a delay due to manual reconciliation processes. Once all funds have been received, they will be transferred to our OTC counterparties for the purchase of USDT0, following which the vault will be funded. During this stage, fund movements will continue to be visible through our Proof of Reserve (POR) system. However, these transactions will not be reflected on the Accountable dashboard, as OTC counterparties do not provide API connectivity or live reporting capabilities. As previously communicated, Altura is in the process of winding down its operations. Accordingly, our monthly service agreement with Accountable concludes on 17 July 2026, and both parties have mutually agreed to terminate the engagement at the end of the current billing cycle. We would like to make it clear that this decision is solely a consequence of the company's wind-down process. Throughout our relationship, we have maintained a positive working relationship with Accountable and all of our other service providers, and there have been no operational issues leading to this decision. Our own Proof of Reserve (POR) platform will remain operational and will continue to provide real-time updates throughout the remainder of the redemption process. Based on the current timetable provided by Inessa, we anticipate receiving the remaining funds on or before 23 July 2026. Once these funds have been received and reconciled, we will provide a further update regarding the OTC settlement process, which we expect to be completed promptly thereafter. As always, we appreciate your continued patience and support. We remain committed to providing transparent and timely updates as we progress through each stage of the wind-down and redemption process.

The Trump administration’s effort to unwind decades of sanctions as part of a deal to end the war with Iran has created a head-spinning situation for governments, banks and other companies