Welcome to Galaxy Research's Weekly Top Stories. Subscribe to get this newsletter delivered to your inbox every Friday morning.
In this week's edition, Alex Thorn juxtaposes the U.S. banking industry’s lobbying campaign to hamstring crypto with the institutions’ accelerating integration of the technology; Lucas Tcheyan unpacks prosecutors’ move to retry Tornado Cash founder Roman Storm; and Thad Pinakiewicz explains an unusual proposal to take a crypto protocol private.
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Market Update
The total crypto market cap stands at $2.54t, up 2.42% from last week (when it stood at $2.48t). Bitcoin's network value is 4.83% of gold's market cap. Over the last seven days, BTC is up 2.78%, ETH is up 2.8%, and SOL is up 2.32%. Bitcoin dominance is 57.1%, up 8 basis points from last week.
The Great Crypto-Capital Markets Convergence Is Underway
Nasdaq said Monday that it is working with crypto exchange Kraken and issuing companies in developing its plan to offer tokenized stocks, an effort it filed with the SEC in September and more formally announced in January. Kraken raised $800 million in November which included a $200 million strategic investment by Citadel Securities that valued the exchange at $20 billion.
According to its latest press release, Nasdaq plans to allow "public issuers to have more control over their shares in tokenized form" and "introduce programmable investor engagement that modernizes the connection that issuers have with investors, notably as it relates to proxy-related actions, corporate actions, and governance rights."
The move comes a week after a similar arrangement was announced between Intercontinental Exchange (owner of the NYSE) and OKX. That deal also featured an equity investment by ICE that valued the crypto exchange at $25 billion.
The traditional players are increasingly integrating blockchain and crypto. Here's a pile of announcements and launches just from the last four months:
The DTCC received a no-action letter from the SEC in December for tokenized securities and announced a strategic partnership with Canton Network.
JPMorgan announced plans to bring JPM Coin to Canton, launched JPMD (its bank-issued USD deposit token) on Base, and launched the MONY tokenized money-market fund on Ethereum.
Wells Fargo filed a trademark for WFUSD covering crypto trading, payments, and tokenization.
JPMorgan, Bank of America, Citigroup, and Wells Fargo were in discussions to develop a joint stablecoin using infrastructure from Zelle's operator and The Clearing House.
Morgan Stanley filed for Bitcoin, Ether, and Solana ETFs and is planning spot crypto trading on E*TRADE in H1 2026 via Zero Hash, with a proprietary wallet coming later in the year.
Goldman Sachs CEO David Solomon said the firm is ramping up research on tokenization and prediction markets and is exploring crypto lending.
Charles Schwab is preparing to offer spot BTC and ETH trading and is exploring a stablecoin launch.
Citigroup plans to launch institutional Bitcoin custody this year. State Street announced a digital asset rollout. BNY Mellon began tokenizing deposits onchain. Truist began offering spot Bitcoin ETFs to private wealth clients. Deutsche Bank is preparing to launch crypto custody.
And the OCC granted conditional trust bank charters to BitGo, Circle, Fidelity Digital Assets, Paxos, and Ripple.
Our Take
The great convergence of crypto and capital markets is underway. Most if not all the big banks and brokerages are engaged at various levels in efforts to integrate and adopt blockchains. That fact alone is a major milestone, even if some of them are more innovation theater than earnest endeavors.
But a fascinating tension is emerging. While these firms are all building crypto products, their main lobbyists are actively obstructing progress in Washington. The CLARITY Act stablecoin rewards negotiations are one well-known instance, but not the only one.
The Guardian reported Monday that the Bank Policy Institute is considering suing the OCC over national banking licenses granted to crypto firms. As I wrote last week, the banking lobby is raising alarms about Kraken's new Federal Reserve master account, a harbinger of the proposed “skinny” account, and may sue the Fed over the issue. It's hard to take those fears seriously — the effort looks more like moat protectionism. And since this was primarily a story about Kraken, it’s worth pointing out that Citadel invested $200m in the exchange and tokenized-securities company but has simultaneously been criticizing tokenized securities and counseling the SEC against allowing them through both paid research and scary letters to the SEC.
It appears empirically true that the big banks and financial incumbents are delaying crypto regulatory clarity while simultaneously racing to catch up on crypto and blockchain products. If this is a deliberate strategy (and not another example of “left hand, meet right hand”), it would make sense. Banking is among the most regulated and shielded industries on earth. Clayton Christensen famously argued in The Innovator's Dilemma that incumbents fail not because they ignore new technologies, but because they absorb innovations into legacy business models rather than let those innovations disrupt their economics — and the banks' simultaneous embrace of blockchain technology and obstruction of blockchain-native competitors suggests they are following that playbook to the letter.
Regardless of this tension, or the possibility that some traditional firms are LARPing rather than innovating, crypto and blockchain technologies are now definitively embedding themselves in the capital markets. There is a palpable sense of inevitability emanating from the financial services industry – spanning from formal announcements to internal meetings to vendor selection processes to conversations over after-work martinis.
But while the inevitability of this convergence is clear, the outcomes are not. Where the push and pull between centralization and decentralization lands, and who captures the most value from this great convergence – crypto or TradFi –remains an unfinished story, and one that undoubtedly will be characterized by battles in Washington, in the marketplace, and onchain. –Alex Thorn
DOJ Seeks Retrial of Tornado Cash Developer Roman Storm
Federal prosecutors in the Southern District of New York this week asked the court to schedule a retrial for Tornado Cash co-founder Roman Storm on two criminal charges a jury failed to reach a verdict on last August. As we covered at the time, a Manhattan jury found Storm guilty of conspiracy to operate an unlicensed money-transmitting business but deadlocked on conspiracy to commit money laundering and conspiracy to violate sanctions, charges that carry a combined statutory maximum of 40 years. Prosecutors are asking for an October 2026 start date. Storm remains free on bond.
The retrial request comes against a policy backdrop that has shifted meaningfully since the original trial. The same day the SDNY filing landed, the U.S. Treasury submitted a 32-page report to Congress under the GENIUS Act that formally acknowledged crypto mixers can serve legitimate privacy purposes on public blockchains. Lawful users may rely on mixers to shield information about personal wealth, business payments, and charitable donations, the report said. This is a notable softening from the department that sanctioned Tornado Cash in 2022, sanctions that were themselves lifted in March 2025 after a federal appeals court ruled the Treasury’s Office of Foreign Assets Control (OFAC) had overstepped its authority.
Our Take
The tension here is hard to miss. One arm of the federal government is prosecuting a developer for building non-custodial privacy software. Meanwhile another part of the executive branch is publicly acknowledging that the tools in question serve legitimate purposes, and the legislature is actively considering safe harbors for exactly that kind of activity.
Storm's conviction on the money-transmitting charge rests on the theory that deploying non-custodial smart contracts constitutes operating an unlicensed money services business. This conflicts with how 2019 guidance from the Financial Crimes Enforcement Network (FinCEN, another bureau of the Treasury) was widely understood, namely that developers who do not custody or control user funds are not money transmitters. Congress is now moving to codify that interpretation. The CLARITY Act, which passed the House with bipartisan support in July 2025, incorporates the Blockchain Regulatory Certainty Act (BRCA). BRCA includes a provision to create a federal safe harbor explicitly exempting non-custodial blockchain developers and service providers from money services business registration under both state licensing laws and the Bank Secrecy Act. The Senate Banking Committee's fact sheet frames the approach as "focusing regulatory efforts on control rather than code."
That situation creates an uncomfortable dynamic. The SDNY is asking for a three-week trial this October on charges that could put Storm in prison for decades, while Congress may be months away from passing a law that explicitly carves out the conduct at issue. The DOJ's own Deputy Attorney General, Todd Blanche, issued a memo last year stating the Justice Department "is not a digital assets regulator" and cautioning prosecutors against targeting developers for the conduct of users who interact with decentralized tools. The retrial request does not square easily with that directive.
None of this is a comment on Storm's guilt or innocence on the specific charges. But the case highlights a growing disconnect between the enforcement posture of federal prosecutors, who are pursuing theories of liability rooted in a pre-crypto regulatory framework, and the direction Congress and the executive branch are moving. Whether the BRCA reaches the finish line before Storm's retrial begins may determine whether this case becomes a lasting precedent or a relic of a regulatory era that Washington is actively trying to move past. – Lucas Tcheyan
Degens (Not Barbarians) at the Gate
Across Protocol, the cross-chain bridge that has been quietly doing the plumbing work of intents in crypto, has proposed a true first in crypto: taking the DAO private. Backed by VC firm Paradigm and battle-tested, Across has floated a proposal that would give ACX tokenholders two choices. First, an equity exchange: swap your ACX for shares in a new corporate entity, AcrossCo. Larger holders would exchange directly; smaller holders would route through a no-fee special-purpose vehicle (SPV). Second, a token buyout: redeem ACX for USDC at $0.04375, a 25% premium to the one-month average spot price, with a six-month window to decide. The buyout would be financed with Across’ liquid assets, roughly equal to its current market cap.
In other words: here’s cash, or here’s stock. Choose your own adventure.
The stated motivation, per cofounder Hart Lambur, is pragmatic. As Across courts more traditional financial institutions, the DAO (decentralized autonomous organization) structure has become a speed bump. Selling infrastructure into TradFi, or even crypto-adjacent companies that employ lawyers, increasingly requires entering into “out-of-protocol agreements.” Named counterparties. Signatures. Liability. The sort of things that DAOs, in their purest form, are bad at. The future, Lambur suggests, involves structured commercial relationships, and legal recourse. You can’t send a Delaware court a Snapshot link. Across wants to reposition itself for that world.
The proposal raises deliciously uncomfortable questions about DAO governance, tokenholder rights, and the organizational form of crypto protocols. What happens to holders who don’t choose by the deadline: will they be raided like many token holders taxed for inactivity? Governance participation is lumpy. Many holders are traders, not governors. Others are long-term aligned but inattentive. Still others are ideologically committed to token-price maximization rather than governance process, the futarchy-adjacent camp that evaluates every action by its immediate market impact.
Therein lies the tension. A venture-backed protocol building infrastructure for a multi-decade financial transition may require long time horizons. But a liquid token can trade every second and has a holder base with a variety of time horizons. If productive investment depresses the token price in the short term, markets can punish exactly the sort of long-term decision making that builds enduring value. This is not a crypto-specific problem. Public equities have been arguing about short-termism for decades. The current U.S. administration has even floated reducing financial reporting cadence to combat quarterly-earnings myopia. Amazon in 1997 did not optimize for next quarter’s EPS, it optimized for dominance a decade down the line.
Our Take
Across seems to be answering the question: “can a DAO optimize for dominance?” with a firm no. But this is not quite a DAO-versus-corporation morality play. It’s more about legal compatibility.
As crypto continues to win and integrates with traditional finance, protocols need contract counterparties, responsible persons, and recognized representatives to interact with traditional legal structures and contracts. We’ve discussed before how difficult it can be for certain DAO structures to “convert” into equity-like arrangements without friction. There are workarounds: tokenize true equity (Galaxy has done this), maintain onchain coordination while layering in legal wrappers (Gabe Shapiro’s MetaLeX thesis). Across could theoretically have kept the token and restructured its rights. Instead, it is offering something closer to a classic M&A take-private transaction (the leveraged buyouts of Wall Street’s two-tone shirt era).
We have seen DAO mergers (Fei-Rari). We’ve seen tokens grant equity rights (Backpack). We’ve seen LayerZero collapse a DAO and absorb it. We’ve seen “ownership tokens” with redemption mechanics. But this, a tender offer–style buyout funded by protocol assets, paired with an equity exchange option, looks like the first DAO take-private transaction in crypto.
The market’s reaction was a standing ovation. ACX jumped more than 75% on the announcement, far exceeding the 25% tender premium to the 30-day average. But what is the market applauding?
One interpretation: the DAO structure was so misaligned with the protocol’s growth prospects that it was cutting the company’s value in half. Remove governance drag, add corporate clarity, streamline decision making, unlock value. Another possible explanation is that the real upside lies in the partnerships now made possible: TradFi integrations, fee-sharing arrangements, enterprise contracts that simply could not be signed by a governance forum. The premium may reflect the expansion of the opportunity set under a new legal wrapper, or it may be a vote against DAOs’ general ability to effectively compete in a nimble market. Either way, the market is confirming that the DAO structure was inappropriate for Across’ business prospects.
Or perhaps it’s simpler. Markets like optionality. ACX holders are being handed a floor (USDC at a premium) and a 6-month call option (equity in a presumably more agile, partnership-friendly company). When you give traders both downside protection and upside narrative, they tend to click “buy.”
But the deeper lesson is structural. Liquid tokens impose public-market discipline on what are, functionally, venture-stage tech companies. DAOs promise decentralization, but they also fragment accountability and distract focus with their anarchic nature. As Gabriel Shapiro puts it, DAOs are well suited to steward the mutable parts of smart contract code, but they are ill suited to nimbly react to rapidly changing competitive landscapes. DAO governance liveliness is uneven, attention is scarce, and when the token price becomes the metric of success, long-term strategy can fall to the wayside in favor of short-term price management.
Across is experimenting with a different equilibrium: keep the protocol, keep the mission, but swap the coordination mechanism. If this works, if partnerships accelerate, if equity holders outperform the buyout, if the protocol thrives, expect more DAOs to discover that decentralization is a spectrum, not a sacrament. That decentralization of decision making comes with an inherent trade-off with efficiency of execution. Corporations have refined this balance over a century of study in organizational behavior with their principal-agent framework.
The cypherpunk dream is unstoppable code. The business reality is signatories and indemnities. Perhaps the happy medium lies somewhere in the middle. – Thad Pinakiewicz
Chart of the Week
Launched in early 2025, fomo (named for the “fear of missing out” that motivates herd behavior) is by far the clearest example of the emerging model of social trading. Rather than centering the experience around order books and charts, this app organizes activity around people. Users follow other traders by username and observe their activity in real time. From there, they can choose how (or whether) to act on that information. The experience is closer to a familiar social platform than traditional trading software. Early traction has been significant.
Note: The chart below shows Solana-based activity only. fomo supports trading across multiple blockchains.
What’s notable about these numbers is composition. This is activity that historically required configuring complex systems: fragmented DEX interfaces, Telegram bots, multiple wallets. The fact a social media-esque app is processing volume comparable to that of Moonshot (a mobile trading app tailored for retail users) suggests removing the interface bottleneck unlocks a meaningfully different user base.
For more on the rise (and risks) of social trading, see our latest report.
In Other News
⛏️The 20 millionth bitcoin has been mined. Just 1m more to go...
🤝SEC and CFTC end turf wars, sign historic MOU
🪨BlackRock debuts its first staked ether ETF
🔮CFTC seeks public comment for coming prediction market rules
🤦Pricing glitch causes $27m spike in liquidations on Aave
🔎DOJ probes Iran’s use of Binance to skirt sanctions, WSJ reports...
⚖️... as Binance sues WSJ over earlier sanction violations article
🤕Bonk.fun’s domain hijacked; hackers plant a wallet drainer
💀Dems introduce bill to ban “war and death” prediction markets
🇿Bitcoin miner Foundry to introduce Zcash mining pool
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