By: Moish Peltz

I’m writing this as I’m settling in for a blizzard (Polymarket suggests 16-18″ in NYC, I’m taking the under because that’s just ridiculous) which will hopefully give me some time to read the IEEPA decision and play with my OpenClaw. Stay safe and warm, friends.

This week, the SEC tackled tokenized securities, and the CFTC claimed jurisdiction over prediction markets. An appellate court handed out sanctions for AI hallucinations. The Pentagon picked a fight with Anthropic. And crypto PACs are loaded up for the midterms with nine-figure war chests (while the CLARITY Act inches forward, Polymarket currently has it at a 72% chance of passing this year).

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The SEC Is Finally Speaking Tokenization’s Language

• Peirce and Atkins lay out an “incremental” path for tokenized securities — and signal an exemption is coming. SEC Commissioners Peirce and Atkins outlined a framework for how tokenized securities fit within existing regulation, hinting at an imminent innovation exemption. This is the clearest regulatory green light the industry has seen in years. [The Block | CoinTelegraph]
• The Trumps are betting big on real estate tokenization. Eric Trump called the Maldives hotel deal the “first of many” tokenized real estate projects, while Trump-linked World Liberty Financial pivots to real estate as crypto prices slide. The family is treating tokenization as a political and commercial brand. [The Defiant | Bloomberg | CoinTelegraph]
• Crypto tax confusion hits a new high as IRS rules scramble holders. New IRS rules for crypto — including cost-basis tracking per wallet — have taxpayers and advisors baffled. 1099-DA forms are rolling in, the compliance burden is real, and most holders aren’t ready. [CoinDesk]
• CFTC claims exclusive prediction market jurisdiction. Despite CFTC claims of exclusive jurisdiction, analysts say states retain significant leverage in the prediction market legal fight. The jurisdictional battle isn’t over. [The Block]. Relatedly, Tennessee court blocks state enforcement against Kalshi. A Tennessee judge granted a preliminary injunction preventing state action against Kalshi, adding to a string of legal victories for prediction markets. [The Block]

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AI in Court

• AI and privilege: it’s complicated. In Warner v. Gilbarco, Inc. (E.D. Mich., Feb. 10, 2026), Magistrate Judge Patti denied a motion to compel discovery of the plaintiff’s AI tool usage, holding that generative AI programs “are tools, not persons” and that treating AI use as a waiver would gut work product protection in virtually every modern drafting environment. Some are calling this a split with Judge Rakoff’s ruling that using Claude waived attorney-client privilege — but as Avi Gesser (Debevoise) points out, the two decisions may not actually conflict: Rakoff’s work product ruling turned on the defendant not acting at counsel’s direction, not on confidentiality. Work product protection requires disclosure to an adversary, and AI isn’t one. The real takeaway: privilege and work product are different doctrines with different waiver standards (including in the criminal and civil context), and AI use may blow one without touching the other. Expect a lot more litigation teasing this apart. [h/t Aaron Lauchheimer & Avi Gesser on LinkedIn | Link to Order]
• An Am Law 100 firm filed another AI-hallucinated brief. For the second time, a top-100 law firm stands accused of submitting court filings with fabricated AI citations. Courts are losing patience, and the reputational damage is accelerating. [Above the Law]
• Fifth Circuit sanctions attorney over AI errors — the appellate courts are done tolerating it. The Fifth Circuit sanctioned a lawyer for AI-generated brief errors, sending a clear message: ignorance of your tools is not a defense. [Law360]
• Smart glasses in court are a surveillance time bomb. Meta’s smart glasses are showing up in courtrooms and depositions. The privacy implications — recording, facial recognition, real-time lookups — haven’t been addressed by courts or bar associations yet. [The Verge]
• AI deposition simulators are now a real legal training tool. AltaClaro and Verbit launched a deposition training simulator, and another platform is offering AI-driven practice sessions for young litigators. Jury is out on whether AI is good or bad for associate training. [Above the Law | Artificial Lawyer]

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AI Governance: The Fight Over Who Controls the Tools

• Pentagon CTO calls Anthropic’s military use restrictions “undemocratic”. The Pentagon’s CTO publicly attacked Anthropic for limiting Claude’s military applications, framing AI safety policies as anti-democratic overreach. This is a new front in the AI governance war — and it’s escalating fast. [Breaking Defense]
• OpenAI’s KYC provider allegedly shared users’ crypto wallet addresses with federal agencies. Persona, the identity verification provider used by OpenAI, is accused of feeding user crypto data to FinCEN. The privacy implications for AI product users are significant and underreported. DL News
• Vitalik proposes AI “stewards” to fix DAO governance. Buterin floated using AI agents as neutral governance stewards in DAOs — a response to voter apathy and plutocratic capture. Ambitious, and technically thorny. CoinDesk
• Decentralized AI could break Big Tech’s grip on the stack. A CoinDesk opinion piece argues that open, decentralized AI infrastructure is the only path to leveling the playing field against hyperscaler dominance. Worth a read for the framing alone. CoinDesk

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Crypto Advocacy

• Crypto super PACs have $100M+ primed for the 2026 midterms The crypto industry is entering the midterms with unprecedented political firepower. This isn’t 2022 — the infrastructure, the war chest, and the voter targeting are all in place. [Citation Needed]
• Digital Chamber launches dedicated prediction market and Quantum + AI working groups. The Digital Chamber formed a working group to push for federal clarity on prediction markets, signaling the industry is done waiting for courts to sort it out. [The Digital Chamber | CoinTelegraph]
• Coin Center fights to keep developer protection bill alive in the Senate. Coin Center sent a letter opposing Senate efforts to strip protections for crypto developers from prosecution as unlicensed money transmitters. [CoinTelegraph | Coin Center Letter]
• Kevin O’Leary wins $2.8M defamation judgment against BitBoy Armstrong. A reminder that even on X, crypto’s culture war has real legal consequences. O’Leary’s win against influencer Ben Armstrong sets a meaningful precedent for defamation in the crypto media space. [The Block]
• Hyperliquid drops $29M in HYPE tokens to fund DeFi policy advocacy. Hyperliquid Foundation is writing big checks to shape DeFi regulation. This is what serious policy engagement looks like from a DeFi protocol. [The Block]

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Odds and Ends

• Starboard pushes Riot to accelerate data center pivot. Everyoneis pivoting from crypto to AI, even activist investors. [Bloomberg]
• OpenAI’s Sora can’t use “Cameo” trademark. I am obligated to comment on anything AI/IP, so here you go. [Law360]
• Tips for GCs on AI in pro se suits. Expect a lot more of this. [Law360]

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Questions? Insights? Your feedback shapes the docket. Reply or reach out.

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Block & Order Weekly Docket | Week of February 16-22, 2026

For legal professionals navigating crypto, AI, and emerging technology law. The materials in this article are for informational purposes only and are not legal advice. Do not act upon this information without first seeking advice from an attorney licensed in your jurisdiction.

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