Web3 Wavefronts - Digestible News on Crypto, DeFi and AI

An executive order in January 2025 created the President's Working Group on Digital Asset Markets, chaired by Special Advisor David Sacks, and directed Treasury, the Federal Reserve, the SEC, the CFTC, the OCC, the FDIC, the Commerce Department, the Justice Department, and the National Economic Council to coordinate federal crypto policy, harmonize supervision, propose rules, and shape international engagement. The administration prioritized dollar-backed stablecoins for payments, prohibited federal agencies from developing a U.S. central bank digital currency, and directed regulators to enable private stablecoin issuance under federal rules. Congress enacted the GENIUS Act in 2025 requiring payment stablecoin issuers to hold reserves in short-dated U.S. Treasuries and U.S. dollars, maintain daily liquidity and par redemption, meet audit and governance standards, and implement technical controls to seize, freeze, or burn tokens under court orders or sanctions. An executive action in March 2025 established a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile as non-trading, long-term holdings subject to custody, key-management, multi-site storage, and independent audit requirements, and authorized acquisitions that could absorb market float and influence liquidity. Policy changes will increase demand for short-term Treasury paper, channel liquidity toward bank settlement rails, make dollar-backed tokens the compliant route for cross-border payments and settlement, and create legal enforcement friction for noncustodial and on-chain designs that cannot enforce orders across bridges or smart contracts. Agencies have begun withdrawing or revising prior guidance limiting onshore issuance, bank partnerships, or listings, and the working group is drafting a rule calendar with draft rules and staff guidance expected to enter the Federal Register in phased sequences over the next two quarters with staged compliance windows for attestations, redemption standards, and updated AML and sanctions controls. Reported industry contributions tied to political campaigns and family business exposures have prompted scrutiny, led to calls for recusal standards and ethics screens, and prompted expectations of congressional oversight, watchdog reviews, and potential litigation. Market participants and service providers should prepare for reserve attestations, bank-grade custodial segregation, sanctions and OFAC screening integrated into token flows, and auditable controls; noncustodial protocols should assess compatibility with legal orders and compliance tooling; and financial executives and investors should monitor Treasury bill demand, settlement mechanics, and acquisition and custody plans for the Strategic Bitcoin Reserve. Key near-term items to watch include working-group draft rules on reserve composition and disclosure, bank and custodian guidance on segregation and capital treatment, issuer compliance timelines and attestations, operational mechanics of the Strategic Bitcoin Reserve, and congressional or legal challenges to the CBDC ban and token-control mandates. Source: https://web3businessnews.com/policy/trump-crypto-policy-pivot-2025/

On January 17, 2026, WOW Exchange announced a Hong Kong prelaunch for a crypto trading platform that emphasizes transparency, layered security, and integrated AI analytics. The platform will include a matching engine designed for high throughput, low-latency execution, and scalable order acceptance to preserve fill quality during volume spikes. The company stated it will implement multi-layer security composed of encryption, continuous telemetry for anomaly detection, proactive risk detection, and resilience features to preserve core functions if subsystems degrade. The platform will embed AI analytics to surface real-time patterns, liquidity signals, and trend indicators directly on the trading interface. WOW outlined community and ecosystem engagement plans that include open feedback loops for early users, partnerships with blockchain projects for listings and liquidity programs, and staged updates via official channels including Telegram at t.me/WOW_LLC. The announcement identified order acceptance rates, queue times, and fill quality during headline-driven volume as key performance metrics and listed independent security audits, documented incident response playbooks with timestamps, public performance dashboards, custody and monitoring controls, AI data governance, demonstrated throughput and latency under production stress, and jurisdictional regulatory licensing as open questions and validation items for the prelaunch period. Source: https://web3businessnews.com/crypto/wow-exchange-prelaunch-hong-kong/

Chainalysis data show Iran's crypto economy processed about $7.78 billion in 2025. Bitcoin flows clustered around political unrest, cyber incidents, and a nationwide internet blackout. Inflation near 40–50 percent and a roughly 90 percent decline in the rial's value since 2018 drove civilian demand for Bitcoin for emergency savings, cross-border transfers, and flight capital. IRGC-linked wallets accounted for about half of the crypto value moving into Iran-linked clusters by Q4 2025 and moved more than $3 billion on-chain during 2025. On-chain flows and daily Bitcoin transactions spiked during protests and outages, and exchange outflows surged between December 28, 2025 and January 8, 2026 as users withdrew funds into personal wallets. Large retail withdrawals under $10,000 rose about 236 percent in value and 262 percent in transfers versus the late-fall baseline; average withdrawals under $1,000 rose about 228 percent in value and 123 percent in transactions; institutional-sized withdrawals under $100,000 rose about 32 percent in volume and 55 percent in transfers; small withdrawals under $100 rose about 111 percent in value and 78 percent in transfers. Addresses consolidated into self-custody and transfers prioritized spendable balances accessible during intermittent connectivity. Recommended actions for builders and exchanges include strengthening on-chain attribution and sanctions screening; implementing dynamic controls with clear appeal and remediation paths for crisis periods; building wallet features for offline signing, watch-only access, seed phrase safety, and modular custody that degrades under intermittent networks; formalizing incident playbooks and legal criteria for freezing or restricting flows; and pairing cross-border transfer features with sanctions-aware routing and enhanced KYC. Expect continued elevated flows concentrated around Bitcoin, increased regulator and investigator scrutiny, and pressure on global exchanges to refine controls while preserving access for users who rely on crypto to preserve value and access basic financial services. Source: https://web3businessnews.com/crypto/iran-bitcoin-adoption-unrest-2025/

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/