In this week’s newsletter, Alex Thorn unpacks the market structure bill’s stalled progress in the Senate Banking Committee; Zack Pokorny considers the implications of the long-awaited launch of a lending product from the Trump family’s World Liberty Financial; and Lucas Tcheyan explains why an Ethereum DAT investing in Mr. Beast isn’t as absurd as it sounds.

📄 Market Structure Bill Falters at Last Minute After Coinbase Yanks Support

Senate Banking Committee Chairman Tim Scott (R-S.C.) on Wednesday night announced the postponement of a critical hearing previously scheduled for Thursday. The delay came about five hours after Coinbase CEO Brian Armstrong publicly withdrew support for the bill. Armstrong cited objections to language on several issues, including tokenized securities, DeFi prohibitions, and stablecoin yield.

The Wednesday night postponement capped a whirlwind 48 hours that started with draft language being publicly released after 11 p.m. on Monday. More than 100 amendments to the bill were filed by 5 p.m. on Tuesday, and stakeholders were still identifying new issues with the bill as late as Wednesday morning.

While Sen. Scott has not announced a future date for the hearing, the Senate is in recess next week, making the week of Jan. 26 – Jan. 30 the soonest possible time for a new Senate Banking markup hearing. The Senate Agriculture Committee, which has jurisdiction over the Commodity and Futures Trading Commission and will need to sign off on the commodities-related issues in the bill, already previously delayed its own markup hearing until Jan. 27.

Senators, their staffs, and industry stakeholders mostly took Thursday off, the first break from what has been a hectic week and a half. No significant action is expected through the weekend, though negotiations are expected to restart in earnest next week.

On Thursday, liquid crypto markets traded moderately lower on news of the postponement, with bitcoin and ether down about 2% on the day. Crypto-relevant equities traded lower, with Coinbase (COIN) -6.5%, Robinhood (HOOD) -7.8%, and Circle (CRCL) -9.7%.

OUR TAKE:

The path forward for the bill is narrower but not closed. The sheer litany of issues at stake and the complexity of the stakeholder environment bedeviled efforts to reach political agreement throughout the week. As I wrote last week, the “market structure” items were mostly agreed upon, but a range of additional issues (themselves still related but not core to the regulatory jurisdiction items that formed the foundation of the bill) created fault lines that could not be traversed in time to hold a successful markup on Thursday. There’s no doubt that progress was made on some issues, and on several, the sides are not too far apart, but distance remains on some key dealbreakers in which progress was stubbornly slow or non-existent. Overall, the gap is narrow, but the chasm is deep.

The stablecoin yield issue is particularly instructive. Quick refresher: the issue is whether stablecoin issuers may share portions of the yield they generate on collateral with either B2B partners or tokenholders. Consensus on GENIUS Act language has been that issuers are prohibited from directly paying token holders, but that issuers could pass on rewards in other ways, such as through partner platforms. The bank lobby has become extremely active – much more so than during last year's GENIUS Act negotiations – and has been a driving force behind the effort to restrict stablecoin rewards, promoting a fear that interest-bearing stablecoins could siphon bank deposits. Essentially, the argument is that yield-bearing stablecoins can destabilize the banking system. Regardless of whether that fear is valid (a Cornell study found such fears to be overblown), a number of key Democrats and even some Republican holdouts made clear that they could not support the bill without explicit restrictions on stablecoin rewards. Negotiations to secure Democrats and holdout Republicans led to a compromise in the discussion draft which prohibited stablecoin issuers from paying rewards “solely in connection with the holding of a payment stablecoin,” but could offer “activity-based rewards,” such as for making a payment or transfer, using a wallet or account, buying a subscription or for customer acquisition (in the case of a B2B relationship). Most of the crypto stakeholders were comfortable with that compromise if it could ensure passage, but by Wednesday, it appeared Democrats and holdout Republicans were still seeking stronger prohibitions. Ultimately, the stablecoin yield prohibitions necessary to secure the Democrats and holdout Republicans proved to be dealbreakers for the stablecoin sector of the crypto industry, some of whom view the issue as existential. A narrow gap but a deep chasm.

Other outstanding issues that the industry wants altered include certain provisions in Title 3 of the bill (DeFi and illicit activity) and language in Titles 5 and 6 that restricts tools available to the Securities and Exchange Commission to allow innovation in tokenized securities. It’s not quite clear whether those issues were on the path to a palatable resolution for the various sides, but they did seem to be heading in the right direction. One example is protections for developers of non-custodial software. Language was mostly agreed upon, and the sides were close, but if that issue were relitigated through amendments or other means, it would be a dealbreaker for crypto and Republicans. A narrow gap but a deep chasm.

There is still time to find a path to passage. But not much. The postponement of the hearing gives all involved the time to relax, take a step back, consider new creative suggestions to win over skeptics, and address outstanding industry asks. There’s no doubt that a failed markup would have been a materially worse outcome. Senate floor time is a scarce commodity, and the calendar presents challenges if a deal can’t be reached soon. We expect the parties to return from their corners next week during the Senate recess to explore whether a path forward is possible and the gaps can be closed. We hope that it is possible, because while the status quo is an accommodative regulatory environment, codifying market structure in federal law is the type of thing that solidifies an industry for 100 years. – Alex Thorn

🦅 World Liberty’s Long-Awaited Lending App Swaps Aave for Dolomite

The Trump family’s World Liberty Financial announced the launch of its long-awaited lending product, World Liberty Markets, powered by Dolomite. The application allows users to borrow and lend ETH, cbBTC, and a variety of stablecoins, including WLF’s USD1. In its first four days, the app has managed to attract $57 million of total liquidity with $18 million in borrows.

World Liberty Financial has long planned to offer a lending application, but the road has been rocky. The team initially posted a temperature check in the Aave governance forum in October 2024 detailing its intention to launch an Aave instance on Ethereum mainnet. As part of the agreement, the Aave DAO was slated to receive 7% of the WLFI supply and 20% of the fees generated by the World Liberty Aave instance (a standard practice for groups licensing Aave tech). This was followed by an Aave Snapshot vote and later ratified by a World Liberty Snapshot vote in November 2024. Both passed with overwhelming support. It wasn’t until August 2025, around the time of WLFI token launch, that the collaboration between the two teams came into question. Rumors swirled that World Liberty team members publicly referred to the reported terms of the agreement as “fake news,” and many at the time assumed the deal was dead, even after some assurance from Stani Kulechov, the founder and CEO of Aave. Ultimately, Aave never received its WLFI token allocation, and the World Liberty team instead launched an app powered by Dolomite.

OUR TAKE:

The World Liberty Markets launch using Dolomite is less of a technology and lending story and more of a governance one. The unilateral decision to ditch the deal with Aave, despite its overwhelming support, brings into question the validity and weight of decentralized autonomous organization (DAO) governance.

Notably, the World Liberty/Aave proposal never advanced beyond the offchain Snapshot voting stage in either DAO’s governance process. Snapshot votes are typically not legally binding and are designed to measure tokenholder sentiment through token voting rather than to execute binding protocol changes. Still, at most DAOs, they serve as a strong social signal and an expression of intent that teams are generally expected to respect unless a subsequent onchain vote or formal governance action reverses course. In this case, no such vote to withdraw or reconsider the integration occurred.

This disconnect highlights a persistent tension in DAO governance between technical authority and social legitimacy. While Snapshot votes may not be enforceable in a legal or smart-contract sense, they form the backbone of many DAOs’ decision-making norms. For a proposal that generated significant enthusiasm, the absence of any formal governance process to unwind the deal makes the unilateral termination feel less like responsible discretion and more like a breakdown in the social contract between tokenholders and protocol maintainers. Moreover, the World Liberty Gold Paper (a Trumpian twist on the standard white paper) published in October 2024 contained language framing the Aave integration as merely a “potential” outcome that “may not occur,” which suggests the team may have been hedging its bet from the start.

Newer DAO designs are moving to reduce governance ambiguity by making votes legally binding and recognizable under legal frameworks. Instead of relying on social norms or informal expectations, these structures tie governance outcomes to enforceable obligations, limiting teams’ discretion to override community decisions. This shift also reflects a broader push for DAOs to operate more like traditional companies, with clearer lines of authority and accountability. That campaign, in turn, is part of the broad token ownership and governance quality movement, where legal recognition is meant to more closely align token quality, voting power, and protocol maintainers’ responsibilities and obligations. – Zack Pokorny

💪 Bitmine Goes Beast Mode

Bitmine Immersion Technologies, the largest Ethereum treasury company by ETH holdings, invested $200 million in Beast Industries, an entertainment and consumer products company founded by YouTube creator Jimmy Donaldson. Better known as MrBeast, Donaldson is one of the world’s most popular digital creators, boasting more than 450 million subscribers across platforms and over 5 billion monthly views.

Beast Industries spans Mr. Beast’s media empire and fast-growing consumer brands such as Feastables. The company has signaled grander ambitions, including a recent trademark filing for “MrBeast Financial,” which hinted at a potential expansion into fintech and crypto-adjacent services.

Bitmine Chairman Thomas “Tom” Lee framed the investment as a strategic alignment, describing Beast Industries as “the leading content creator of our generation” with unparalleled reach among Gen Z, Gen Alpha, and Millennials. Lee emphasized Ethereum’s role as a foundational layer for the future of finance, where tokenization and digital money increasingly blur the boundaries between media, commerce, and financial services. The announcement came hours before Bitmine’s annual stockholder meeting.

OUR TAKE:

Beyond the obvious marketing upside, Bitmine is likely making a forward-looking bet that a yet-to-be-launched Mr. Beast platform can become a major on-ramp for new Ethereum users. On the surface, the partnership pairs Ethereum’s most visible corporate advocate with one of the most powerful consumer media engines in the world. More strategically, it gives Bitmine exposure to a consumer-facing business that could plausibly use Ethereum—rather than simply promote it.

Following the announcement, Lee publicly floated potential use cases ranging from stablecoins and loyalty programs to IP management and digital payments, though Beast Industries has not formally announced any such endeavors. While speculative, these ideas highlight the real prize: integrating Ethereum-native financial rails directly into a fast-growing, large-scale consumer brand.

From Bitmine’s perspective, the investment is part of its stated “moonshot” capital allocation strategy. The company has earmarked 5% of its balance sheet for higher-risk, higher-upside investments outside its core ETH and BTC treasury. The Beast Industries investment follows prior non-core bets, including its September 2025 investment in Eightco Holdings, a digital asset treasury company tied to Sam Altman’s Worldcoin (of eyeball-scanning fame). Bitmine also plans to launch its own Made-in-America Validator Network (MAVAN) this quarter.

More broadly, the timing matters. Digital Asset Treasuries (DATs) remain under pressure, with many trading near cycle lows as investors question whether holding crypto on balance sheets meaningfully adds value versus direct exposure. Bitmine’s approach suggests one potential path forward: using treasury scale to secure strategic partnerships that create upside beyond ETH price appreciation and staking yield.

If Bitmine can pair ETH accumulation with initiatives like its planned validator network—capturing staking economics—while onboarding high-visibility partners that expand Ethereum’s real-world usage, it would strengthen the case that some DATs could outperform the underlying asset. The risk, of course, is execution, and whether any additional value actually accrues to ETH and Bitmine itself. Ultimately, the question for shareholders is whether this creates more value than simply allocating $200 million to ETH. – Lucas Tcheyan

Charts of the Week

Privacy coins, until recently a backwater of the crypto market, are posting outsized gains. Monero (XMR) and Railgun (RAIL) have notched fresh all-time highs in the past 90 days, while Zcash (ZEC) is up more than 700%, though still below its prior peak.

This week, the U.S. Securities and Exchange Commission ended its years-long probe into Zcash. The move removes a lingering regulatory overhang for the project, even as the ecosystem works through internal leadership and governance turmoil.

That turmoil came to a head last week, when the entire staff of Electric Coin Company (ECC), one of the main development teams behind Zcash, resigned following a dispute with its nonprofit overseer, Bootstrap. Josh Swihart, ECC’s now-former CEO, said the departing team plans to form a new, independent company to continue building in the Zcash ecosystem under a structure they believe better reflects their values.

The historically illiquid sector’s resurgence is remarkable because for years these coins traded sideways, shunned by regulated exchanges that are required to use onchain analytics to trace fund flows. Whether the rally signals a newfound investor appreciation for privacy, or simply speculation that institutions will demand it as they move onchain, remains to be seen. – Christopher Rosa

Other News

✋X bans apps that reward ‘AI slop,’ ‘reply spam’; KAITO tanks

🔌 Sui blockchain restored after six-hour outage

🐼 EU exchange Bitpanda plans $5b IPO in 2026

🖥️ ‘Post-quantum’ crypto startup Project Eleven raises $20m

🇨🇳 China’s Z.AI releases model trained without U.S. chips

💠 Polygon to become U.S.-regulated payments platform

🟠 Citrea introduces U.S. dollar stablecoin on top of Bitcoin

🕔 Interactive Brokers enables 24/7 account funding with stablecoins

🏛State Street expands tokenization push

🏀 NCAA urges CFTC to pause college sports prediction markets