Stablecoin Products Launch by US Financial Institutions and Crypto Companies
By Robert A. Musiala Jr.
On Dec. 18, SoFi Technologies Inc. announced the launch of SoFiUSD, “a fully reserved U.S. dollar stablecoin issued by SoFi Bank, N.A.” According to a press release, “SoFi is now the first national bank to offer open access to its stablecoin, SoFiUSD, and stablecoin infrastructure, bringing bank-grade oversight and reliability to companies looking to integrate stablecoin products and services.”
In more stablecoin news, on Jan. 7, Wyoming announced the state’s “historic launch of the first fiat-backed, fully-reserved stable token to be issued by a public entity in the United States.” According to a press release, “[t]he Frontier Stable Token (FRNT) is now publicly available on Kraken, a Wyoming-domiciled cryptocurrency exchange and Special Purpose Depository Institution.” FRNT is currently supported on the Arbitrum, Avalanche, Base, Ethereum, Optimism, Polygon and Solana blockchains.
Also on Jan. 7, the issuer of the USD1 stablecoin announced that an affiliated company has filed a de novo application to the Office of the Comptroller of the Currency to establish a proposed national trust bank “purpose-built for stablecoin operations.” According to a press release, the trust company plans to serve institutional customers and will offer “digital asset custody and stablecoin conversion services, enabling holders of other stablecoins to move into USD1.”
In a final recent development, the largest U.S. bank announced that its blockchain business unit intends to collaborate on the “native issuance” of its “deposit token product, JPM Coin … on the Canton Network, a privacy-enabled blockchain network designed for synchronized financial markets.” According to the press release, “[w]ith native availability of JPM Coin, institutions using Canton will be able to issue, transfer, and redeem JPMD near-instantly within a secure and synchronized ecosystem.”
For more information, please refer to the following links:
Ethereum ETF Distributes Staking Rewards; Exchange Joins Settlement Network
By Jonathan Cardenas
On Jan. 5, a market-leading digital asset investment company with approximately $31 billion in assets under management published a press release announcing that its ethereum staking exchange-traded fund (ETF) became the first U.S. ethereum exchange-traded product (ETP) to distribute staking rewards to its shareholders. The announcement follows the ETF’s distribution to its existing shareholders of proceeds from the sale of staking rewards that were earned by the ETF between Oct. 6, 2025, and Dec. 31, 2025. According to a statement by the company’s CEO, the distribution of staking rewards to its shareholders is a “landmark moment” for the “entire Ethereum community and ETPs at large.” According to the press release, the company intends to extend staking capabilities to additional products in the future.
In other cryptocurrency market news, the Lynq Network, an interest-bearing digital asset settlement network, published a press release announcing the integration of a major global cryptocurrency exchange into the network’s settlement platform. With the integration, the exchange is able to accept collateral via the Lynq Network, which enables institutional clients to fund and manage their digital asset exchange accounts. According to the press release, the partnership between the exchange and the Lynq Network advances the broader goal of “building operationally robust, on-chain settlement solutions for institutional participants.”
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2026 Crypto Market Outlook Reports Published
By Robert A. Musiala Jr.
Multiple companies recently published reports addressing the 2026 cryptocurrency market outlook. Links to reports by several well-known companies are provided below.
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Bank Association Urges Congress to Close GENIUS Act ‘Regulatory Loophole’
By Robert A. Musiala Jr.
The American Bankers Association, a major U.S. community bank trade association, recently announced that it has sent a letter to the U.S. Senate urging it to “take decisive action to protect local economies from emerging risks in the digital asset market.” The letter expresses concern that cryptocurrency companies are “exploiting a regulatory loophole” in the GENIUS Act related to its prohibition of stablecoin issuers paying interest on stablecoins. According to a press release, “While the law prohibits stablecoin issuers from paying interest – a safeguard to ensure that deposits remain in banks and continue funding loans for families, farmers and small businesses – some companies are circumventing clear Congressional intent through indirect payments via affiliates and partners.” The letter states that this “regulatory loophole” could result in up to $6.6 trillion in deposit flight from community banks. The letter calls for Congress to make clear that the GENIUS Act’s prohibition on interest “applies not only to stablecoin issuers but also to their affiliates and partners.”
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SEC Issues Statement on Broker-Dealer Custody of Crypto Asset Securities
By Amos Kim
The U.S. Securities and Exchange Commission’s (SEC) Division of Trading and Markets recently published a statement clarifying its views on how broker-dealers can satisfy the “physical possession” requirement of the Customer Protection Rule when holding cryptocurrency asset securities. Paragraph (b)(1) of Rule 15c3-3 under the Securities Exchange Act of 1934 requires a broker-dealer to promptly obtain and thereafter maintain physical possession or control of all fully paid and excess margin securities it carries for the account of customers. The statement outlines a framework under which the division will not object to a broker-dealer deeming itself to have “physical possession” of a cryptocurrency asset security as set forth in paragraph (b)(1) of Rule 15c3-3. The framework includes specific requirements in the following five areas:
- Access to cryptocurrency asset securities and transfer capability. The broker-dealer directly has access to the cryptocurrency asset security and the capability to transfer it on the associated distributed ledger technology.
- Assessment of the characteristics of a cryptocurrency asset security’s distributed ledger technology. The broker-dealer establishes, maintains and enforces reasonably designed written policies and procedures to conduct and document an assessment of the distributed ledger technology and associated network prior to undertaking to maintain possession of the cryptocurrency asset security.
- Not undertaking to maintain custody of a cryptocurrency asset security due to security or operational problems. The broker-dealer does not deem itself to possess a cryptocurrency asset security if it is aware of material security or operational problems or weaknesses with the distributed ledger technology and associated network or material risks posed by custodying the cryptocurrency asset security.
- Protection of private keys. The broker-dealer establishes, maintains and enforces reasonably designed written policies, procedures and controls to protect against theft, loss or unauthorized or accidental use of the private keys necessary to access and transfer the cryptocurrency asset security.
- Measures for ensuring the continued safekeeping and accessibility of the cryptocurrency asset securities in the event of disruption. The broker-dealer establishes, maintains and enforces reasonably designed written policies, procedures and arrangements to (i) identify the steps it will take in the wake of events that could affect the firm’s possession of cryptocurrency asset securities, including blockchain malfunctions, 51% attacks, hard forks or airdrops; (ii) allow the broker-dealer to comply with a lawful order as to seizing, freezing or burning the cryptocurrency asset securities; and (iii) allow for transfer of the cryptocurrency asset securities to an appropriate person in the event the broker-dealer self-liquidates or is subject to a formal bankruptcy, receivership, liquidation or similar proceeding.
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SEC Action Targets Crypto ‘Investment Confidence Scam’
By Robert A. Musiala Jr.
The U.S. Securities and Exchange Commission (SEC) recently announced charges against multiple digital asset trading platforms and investment clubs, alleging the defendants “defrauded retail investors out of more than $14 million in an elaborate investment confidence scam.” According to an SEC press release, the defendants perpetrated “a multi-step fraud that attracted victims with ads on social media, built victims’ trust in group chats where fraudsters posed as financial professionals and promised profits from AI-generated investment tips, then convinced victims to put their money into fake crypto asset trading platforms where it was misappropriated.” The SEC’s complaint charges the defendants with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC seeks permanent injunctions and civil penalties against all the defendants and disgorgement with prejudgment interest against certain defendants.
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Wallet Hack Results in $7M Loss; Report Addresses North Korea Crypto Crimes
By Robert A. Musiala Jr.
On Dec. 26, a major cryptocurrency wallet software provider confirmed that approximately $7 million in customer funds were lost in a hack. The hack reportedly appeared to be a “supply-chain attack” that exploited a vulnerability in the wallet’s browser extension version 2.68. Users of the wallet software were reportedly instructed to turn off the browser extension and upgrade to version 2.69.
On Dec. 18, TRM Labs published a report addressing cryptocurrency crime by North Korea. Key takeaways from the report include the following: (i) North Korea stole over half of the total $2.7 billion lost in 2025 in cryptocurrency hacks, (ii) attack targets have shifted from bridges to centralized targets more susceptible to social engineering and developer compromise and (iii) laundering is outsourced to the “Chinese laundromat” – a network of OTC brokers and underground banks.
For more information, please refer to the following links:
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