Off the Blockchain+, February 2-9, 2026

I didn’t hear no bell! Despite crypto prices continuing to fall along with larger market pullbacks across assets, the legal developments continued forward. After two weeks of fast-paced legal developments, it was a relatively slow week with lots of minor updates such as the Whitehouse trying to get the parties in a room to solve the stablecoin yield issues and the creator of the Ethereum network issuing some spicy takes on the L2 ecosystem he helped encourage.

Here’s everything that happened last week in crypto law:

OTHER STORIES

Whitehouse Yield Summit: Monday of last week the Whitehouse brought together the banking and crypto advocacy leaders to try to settle the stablecoin yield issue once and for all. Public reporting is that the crypto leaders came with solution proposals while the banking leaders just reiterated their positions without any substantive negotiation on solutions which is fitting on which side is trying to reach a deal vs. which side is just being obstructionist.

Startup Stablecoin Funding: Pretty cool that leading accelerator Y Combinator is giving startups the option to receive their YC funding in USDC. It makes so much sense, especially since payment for developers and contractors is increasingly easier and preferred to be done in stables vs. bank transfers.

Vitalik Spicey L2 Takes: Vitalik had some spicey takes on layer 2 networks’ role in the ETH ecosystem, as many abandon or push back prior goals to reach stage 2 decentralization. Saying “the original vision of L2s and their role in Ethereum no longer makes sense, and we need a new path.” Is like “I don’t want to play with you anymore” in Toy Story or this hilarious comp to The Social Network.

House Financial Services Hearings: The House Financial Services Committee held a hearing of the full Committee on The Annual Report of the Financial Stability Oversight Council and the subcommittee on capital markets on A New Day at the SEC: Restoring Accountability, Due Process, and Public Confidence, both of which focused heavily on crypto topics.

Senate Banking Hearing: The Senate Banking Committee also held its Financial Stability Oversight Council’s Annual Report to Congress hearing, but luckily there was far less focus on partisan crypto issues (some, but not as much), so that was nice to see this wasn’t as much of a partisan issue in the committee we are waiting on for market structure legislation to move forward.

CME Coin: The Chicago Mercantile Exchange (“CME”) is considering launching its own token which right now is looking like it will serve as tokenized cash for meeting collateral requirements on its exchange, but more to come I am sure. It’s giving “how do you do, fellow kids” with this vague statement about what a tokenized asset even is.

BSA Usefulness: When I see an article breaking down how broken the BSA is at actually solving crime despite its costs and privacy intrusions inflicted on ordinary Americas, I post that article. Those are the rules.  

CFTC Withdraws Sports/Politics Prediction Market Ban Proposal: CFTC Chair Selig made good on the promise he made last week to withdraw proposed rulemaking proposals which would ban prediction markets on federal election outcomes or sporting event outcomes.

Prediction Markets Class Action: Speaking of prediction markets, as is common the Plaintiff’s bar has taken note of the various state regulator lawsuits and wants their pound of flesh in private class action litigation. Polymarket seems like the first target but every lawyer knows this will be the first of probably 50+ files against all prediction market operators in states across the country until there is regulatory clarity on the jurisdictional lines between state regulated gaming and federally regulated event contracts.

CFTC Updates Stablecoin Guidance: The CFTC made a clerical update that payment stablecoins issued by national trust banks are also eligible collateral to support margin position on CFTC regulated exchanges. Nothing major changed, but it shows staff is paying close attention and likely preparing further implementing rulemaking in this area.

Gemini Cutting UK/EU/Australian Operations: Gemini announced it is focusing on the U.S. market, prediction markets, and increasing efficiencies through AI as it recently announced it would be cutting 25% of its work force as a part of this narrowing of focus. Probably smart, as all-purpose exchanges get commoditized so narrowing focus probably make sense for anybody not trying to be the Everything Exchange.

Chris Dixon Still Bullish on Web3: One book I generally recommend for people who want to learn more about crypto is Read/Write/Own, and I have extra copies in my office at all times to give away. So I loved this recent article by Chris on why he is still bullish on the non-financial use cases for blockchain tech. I still believe in blockchain-enabled social media, ticketing, gaming, etc.

CONCLUSION

If you have any questions or would like me to write about anything else, let me know on Twitter (X?) or Farcaster. As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.

Outro/Disclaimer: In late 2022, while I was at Polsinelli, I started preparing weekly updates for attorneys at the firm to stay abreast of the latest Web3 legal developments. I now post the weekly updates on my personal blog every Tuesday, where I also provide links to more obscure legal developments and otherwise discuss industry trends and stories. Please note, the views and opinions I express are solely my own. They do not reflect the official stance or endorsement of the Digital Chamber or any of its members.