Web3 Wavefronts - Digestible News on Crypto, DeFi and AI

On January 15, 2026, the SEC’s Division of Corporation Finance informed MegPrime Holding LLC and Megatel Homes LLC that staff will not recommend enforcement if the MP Token is offered and sold without registration under Section 5 of the Securities Act and without registration under Section 12(g) of the Exchange Act, provided the project follows the factual representations submitted to staff. MegPrime described MP as a universal payments token that powers a wallet and a payment card, enables users to fund wallets, spend at merchants, and earn token rebates redeemable inside the MegPrime ecosystem, and offers mortgage rate discounts up to two percentage points below market averages, rent rebates, and a $25,000 home purchase credit that vests on closing and program compliance. The no‑action relief relied on token design and use that tie supply and distribution to consumption and rewards activity, structure redemptions to resemble loyalty points and discounts rather than claims on corporate profits, and limit governance and revenue‑sharing features, with token holders receiving no voting rights, no board participation, and no profit distributions. MegPrime presented marketing, distribution, custody, wallet onboarding, and merchant payouts as closed‑loop payments and rewards mechanics, and outside counsel documented factual predicates and an ongoing compliance plan that staff relied upon. The letter identifies compliance actions for teams seeking similar relief: map real‑world payment flows, define redemption mechanics as discounts or credits, limit secondary‑market promotion, and document custody, AML/KYC, and anti‑fraud controls. The decision sets a targeted precedent for utility tokens that combine card rails, merchant‑funded offers, and longer‑horizon incentives while making relief contingent on adherence to the specific facts presented to staff. Execution risks include delivering measurable savings to users, securing merchant acceptance to ensure reward liquidity, avoiding marketing that creates profit expectations or implies tradability, disclosing thresholds and waiting periods for housing benefits, and integrating with banks, card networks, and compliant wallet infrastructure. Milestones to watch include the wallet and card rollout, initial merchant integrations, redemption volumes for mortgage discounts, rent rebates and the home purchase incentive, and any further SEC staff guidance or no‑action letters for comparable projects. Founders and compliance teams are advised to document token function and user benefits before regulatory engagement, design supply and redemption mechanics to mirror existing loyalty and payments programs, limit governance, revenue‑sharing and secondary trading features, and prepare operational controls for custody, AML/KYC, merchant settlement and disclosures. Source: https://web3businessnews.com/crypto/sec-no-action-megprime-token/

Eric Adams served as visible promoter during a January 12–13 Times Square event that introduced NYC Token, which launched on Solana with a capped supply of one billion tokens and a decentralized exchange listing. Messaging tied the project to anti-hate initiatives, scholarships, and crypto education. Within minutes of trading, retail buying and thin initial liquidity drove a fully diluted market capitalization into the $580–600 million range. On-chain data showed an early withdrawal of approximately $2.43–2.5 million USDC from the token liquidity pool, a later return of roughly $1.5 million USDC, and about $1 million unaccounted for relative to the initial base, which concentrated control of the pool and altered the token-to-stablecoin ratio. Reduced stablecoin liquidity produced outsized slippage that amplified sell-side price impact, and market cap measures fell to about $110 million by the end of the day. Analysts and multiple media outlets characterized the sequence as consistent with a rug pull and reported connections between the launch and individuals identified as Frank Carone and Yosef Sefi Zvieli, with Adams as the public face. Public disclosures at launch did not include a clear governance model, vesting schedule for team allocations, or transparent custody arrangements, and the project did not demonstrably provide verifiable LP locks, multisig custody, or renounced mint permissions at the time trading began. Regulators have potential consumer protection, fraud, and securities avenues to examine representations about proceeds and funds handling, and open questions remain about the final destination of the missing funds, statements from named parties, and potential state or federal investigations. Observers recommended that issuers publish full tokenomics and governance documents before trading, use audited multisig wallets and verifiable LP locks, provide third-party audits and clear mint permissions, and that traders verify LP locks, inspect wallet histories, and confirm vesting and custody arrangements before allocating capital. Source: https://web3businessnews.com/crypto/nyc-token-collapse-analysis/

Russia finalized a draft bill to recast crypto as an investment asset effective July 1, 2026 with full operational rollout through 2027. The draft imposes a 300,000 ruble annual purchase cap for non‑qualified retail investors and requires new retail entrants to pass a mandatory risk awareness test covering volatility, possible total loss, custody exposures, and drawdown scenarios. Trading and custody for retail and institutional flows will be limited to licensed Russian platforms and approved intermediaries, and foreign trading venues will be allowed only under reporting rules that require disclosure of holdings and income and carry escalating penalties for evasion. The draft maintains the ban on domestic crypto payments and explicitly prohibits privacy‑focused coins such as Monero and Zcash. The proposal criminalizes large‑scale or organized unlicensed mining from 2027. The bill establishes a two‑tier investor model that limits asset lists for non‑qualified retail users and subjects professional and institutional participants to suitability checks, ongoing reporting, independent audits, and capital‑market style controls. The draft assigns domestic exchanges to anchor price discovery and liquidity, assigns banks to handle onboarding, KYC, and custody, and identifies national custodians such as Sberbank as potential custody providers. Regulators and lawmakers frame the proposal as a way to pull trading and custody onshore, limit household exposure, open controlled channels for cross‑border settlements, reduce fraud, increase tax capture, and give supervisors data and tools to limit systemic risk. Estimates cited in the draft put crypto transactions involving Russian participants at about $376 billion between mid‑2024 and mid‑2025. The central bank plans to calibrate limits based on early metrics such as cap utilization, test pass rates, and venue liquidity, and enforcement mechanisms in the draft include fines, reporting requirements, and criminal referrals for large violations. Source: https://web3businessnews.com/policy/russia-crypto-everyday-2026/

Wyoming opened public purchases of FRNT on January 7, 2026. The Wyoming Stable Token Commission issued FRNT under the Wyoming Stable Token Act and set redemption at one-to-one for U.S. dollars. Wyoming described FRNT as a U.S. public-entity stablecoin. The reserves backing FRNT consist of cash and short-dated U.S. Treasuries, with Franklin Templeton managing the reserves and Fiduciary Trust Company International providing custody, and net interest after program costs directed to Wyoming school programs under statute. FRNT launched natively on Solana and enabled cross-chain interoperability via LayerZero messaging and Stargate bridges to Ethereum, Arbitrum, Base, Optimism, Polygon, and Avalanche, with Rain supporting Visa-linked flows on Avalanche. Kraken provides initial regulated on-ramps and distribution under a Wyoming SPDI charter, and Fireblocks supports institutional minting, redemption, and treasury workflows. Transactions on Solana settle in seconds and appear on-chain, while issuance and redemption remain governed by the Commission’s rules and the Stable Token Act. Targeted uses include retail payments, B2B settlement, exchange collateral, and treasury operations. The program requires full reserve backing, defined redemption rights, periodic reporting and attestations, KYC and AML policies, and reserve sufficiency testing as specified by statute. Phase one priorities include growing liquidity across exchanges and DeFi venues, expanding custodial and wallet support, deepening payment integrations, and regularizing reserve disclosures. Key risks include liquidity depth on Solana and connected EVM venues, cross-chain security for messaging and bridges such as LayerZero and Stargate, the frequency, scope, and independence of reserve reporting and audits, and the clarity of redemption mechanics and stress playbooks. Market participants should monitor exchange and DeFi listings, track reserve reporting and audit claims, test cross-chain rails in controlled environments, evaluate redemption processes and fee structures, plan Solana-native and EVM-compatible integration paths, and align custodial and KYC/AML arrangements with Commission policies. Source: https://web3businessnews.com/crypto/wyoming-frontier-stable-token-frnt/

CoinGecko is exploring a potential sale that could value the company near $500 million, with Moelis & Company advising an early-stage, two-track outreach to strategic and financial buyers that began in late 2025; no terms or buyer have been announced and the company remains under existing leadership. CoinGecko aggregates price feeds, exchange coverage, token metadata, exchange trust scores and a programmatic API used by wallets, trading platforms, DeFi front ends and institutional workflows. Sources describe buyer underwriting focused on durability of API revenue, defensibility of data ingestion and normalization pipelines, and stickiness of downstream integrations. Market context includes Binance's 2020 acquisition of CoinMarketCap for about $400 million and 2025 crypto M&A activity totaling 133 announced deals and roughly $8.6 billion, with buyers concentrating on exchanges, derivatives platforms, custody and data layers. Potential ownership changes could concentrate control over pricing, rate limits and access, create conflicts around venue scoring, token inclusion and data openness, or prompt private equity moves toward enterprise packaging, predictable revenue and margin expansion while requiring protections for developer trust. Practical steps for business leaders include mapping contingency plans for critical feeds, identifying alternate data sources, running redundancy tests, assessing contracts and SLAs for rate limits and latency guarantees, budgeting for potential pricing changes, considering multi-source aggregation and monitoring filings for governance commitments and product-roadmap signals. Deal-watch items include bidder identities, governance or neutrality commitments, transaction structure (full sale, minority growth capital or partnerships), possible regulatory scrutiny and buyer commitments to customer retention, transparent change logs and provenance controls. Founders and operators face valuation frameworks that emphasize embedded distribution, stable programmatic revenue and technical defensibility, and investors are modeling value from investments in schema design, provenance tracking, deduplication, low-latency delivery and demonstrable usage metrics and deep integrations that affect multiples. Source: https://web3businessnews.com/crypto/coingecko-500m-sale-moelis/

France’s markets regulator, the AMF, reported that about 90 firms registered under the national PSAN regime do not hold EU MiCA authorization. Of those firms, approximately 30% have submitted MiCA applications, roughly 40% have notified the AMF they will not apply and plan to cease operations, and roughly 30% have not responded to repeated contact since late 2025. The MiCA transition period ends June 30, 2026, and from July 1, 2026 any crypto service provider without MiCA authorization must halt services in France and across the EU. The AMF has instructed unresponsive firms to either complete MiCA applications or present credible wind-down plans that protect customers and preserve orderly exits. ESMA has directed national supervisors to ensure unauthorized entities prepare and execute orderly exit strategies ahead of the cutoff. MiCA establishes a single EU regulatory rulebook that imposes consumer safeguards, governance, prudential requirements and transparency obligations across trading, custody, issuance and stablecoin activities. Firms seeking authorization must demonstrate client asset protection, conflict-of-interest management, risk disclosure, capital sufficiency and operational resilience, and stablecoin issuers must maintain reserve and governance frameworks. Authorized firms can passport services across the EU once they secure MiCA authorization. France is advocating for increased supervisory powers at ESMA to reduce enforcement divergence and limit jurisdiction shopping. A number of firms are pursuing EU authorizations or passports in other member states and some preliminary approvals for payment or stablecoin activity have emerged. The report recommended that investors, counterparties and vendors audit exposures, confirm which providers will remain operational after June 30, 2026, and update contingency plans for key vendors in the unresponsive group. Source: https://web3businessnews.com/policy/amf-warns-crypto-firms-mica-2026/

Illicit cryptocurrency addresses received an estimated $154 to $158 billion in 2025, a near 162% year-over-year increase, with stablecoins accounting for about 84% of that volume. Sanctions-related flows rose and nation-state-aligned actors, notably DPRK-linked groups, stole roughly $2 billion including a single exploit that cost an exchange about $1.5 billion. Criminal operations combined credential theft and compromised infrastructure with transaction signing and withdrawal authorization, then used mixers, cross-chain swaps, OTC desks, money brokers, and weak-control jurisdictions to launder proceeds while repeatedly reusing the same liquidity hubs, stablecoin pairs, and counterparties. Physical coercion and in-person intimidation of traders and executives increased and incidents were sometimes timed to price movements. Investigators and analytics providers pooled signals, improved attribution and tracing, and law enforcement reported record seizures in 2025 through faster tracing and legal actions to freeze assets. Entity risk scores became dynamic as addresses flipped to high risk when new attribution data appeared. Guidance for exchanges and custodians includes hardening key and withdrawal controls with multi-party signing, staged approvals, velocity limits, emergency rotation plans, continuous monitoring of stablecoin corridors, stress testing of hot wallet scenarios, and rehearsed playbooks with prearranged law enforcement contacts. Guidance for funds and enterprise treasuries includes segmenting wallets by function and risk, using hardware-backed signing, granting just-in-time access, screening counterparties and flows against sanctions lists with real-time alerts, prearranging emergency contacts, and practicing on-chain incident response playbooks. Guidance for individuals and developers includes training for phishing and social engineering, preferring hardware wallets and multisig, minimizing hot wallet balances, using allow lists, spend limits, time locks, session isolation, and independent verification of transfer requests. Entity-aware analytics, graph enrichment, dynamic watchlists, fast preplanned holds, legal orders, and participation in shared intelligence programs were associated with improved recovery and seizure outcomes. Three measurable signals to track through 2026 are the velocity of sanction-related flows across stablecoin corridors, the operational tempo of DPRK-linked intrusion campaigns, and the ratio of value recovered through seizures versus value stolen. Source: https://web3businessnews.com/crypto/secure-digital-assets-crypto-crime/

Tether froze about 182 million USDT across five TRC-20 addresses on the Tron network on January 11, 2026, using contract-level blacklist admin calls that took effect upon on-chain confirmation. Analytics services and block monitors flagged the addresses and immobilized balances within minutes, and exchanges and Tron infrastructure continued processing blocks and trades without visible disruption. Each affected wallet held between about 12 million and 50 million USDT, and the blacklist entries are visible in Tron event logs and indexers that parse contract events. Tether reported having frozen about 3.3 billion USDT across more than 7,200 wallets since 2023 and cooperating with more than 310 agencies across 62 countries; Tron currently hosts roughly 82.5 billion USDT and USDT's market capitalization remained near 187 billion. The freeze produced no peg stress, liquidity remained stable across major venues, there was no observed spillover into large DeFi pools on Tron or Ethereum, settlement and exchange connectivity operated normally, and Tron gas costs did not spike. The public record does not cite a specific trigger for the action and there is no confirmed attribution for the five addresses; historically, similar issuer-led freezes have followed risk alerts tied to sanctions, fraud investigations, or suspected laundering. Recommended operational measures included integrating blacklist detection at deposit, withdrawal, and liquidation points, aligning KYC/AML/sanctions screening with issuer processes, maintaining failover settlement paths and alternative assets, instrumenting real-time address risk scoring, and adding routing checks to flag counterparties linked to newly frozen clusters. The event demonstrated that large issuer-led freezes can occur without immediate market disruption while creating operational requirements for builders, operators, and institutional users to handle sudden immobility at the contract layer. Source: https://web3businessnews.com/crypto/tether-freezes-182m-tron-wallets/

The Anti-Defamation League analyzed 15 extremist actors and identified roughly $142,000 moving across 22 services from 2023 into 2024, with Kraken-linked flows accounting for nearly $80,000 and Counter-Currents processing more than $61,800 in 2023; Chainalysis reports that overall extremist donations have dipped in some regions while white nationalist fundraising remained active in North America and Europe. Operators pivot to on-chain addresses and QR codes when banks and payment processors cut off accounts, post public donation addresses on websites and messaging channels, and rely on many small, dispersed transfers to multiple wallets; clustered addresses and intermediaries provide liquidity and occasional cash-out routes that sometimes touch mainstream exchanges, and use of privacy coins and obfuscation tools complicates attribution. Risk teams observe that these flows can appear as low-value retail-like transfers on the surface while underlying clusters, shared intermediaries, and occasional custodial accounts enable coordinated fundraising and liquidation. Recommended operational measures include shifting from address-only alerts to cluster and graph-based scoring, monitoring hops into privacy coins and back into liquid pairs, enriching on-chain alerts with civil-society datasets and open-source reporting, adding extremism-specific red flags to screening rules and case workflows, tightening onboarding and re-verification for high-risk entities, continuously monitoring publicized addresses, maintaining partnerships with analytics firms and NGOs for curated watchlists, and escalating to law enforcement and documenting the rationale for suspicious activity reports when graph analysis indicates coordinated fundraising or legal defense for violent actors. Regulators are expected to increase pressure around address intelligence, standardized reporting, and cross-platform coordination, and known challenges for detection include noisy low-value transfers, limited visibility into privacy coins and decentralized services, and sparse typologies for extremist financing that require sustained investment in tooling and partnerships. Source: https://web3businessnews.com/crypto/neo-nazi-crypto-funding/