Block & Order Weekly Docket (January 25, 2026)
Same winter, different vibes. Nano Banana Pro 3.
Welcome to this week’s edition of Block & Order Weekly Docket. I hope everyone is staying warm and cozy with the snow. This week, states are aggressively asserting regulatory authority, institutional players are embracing tokenization and Bitcoin strategies, and courts are grappling with how legacy statutes apply to emerging technologies. Meanwhile, AI governance questions are moving from theoretical to actionable.
Crypto Policy & State Enforcement
• Coinbase withdraws support for Senate Banking bill, citing provisions favoring traditional banks over crypto innovation – CEO Brian Armstrong characterized the draft legislation as undermining pro-crypto policy goals through restrictions on tokenized securities, DeFi protocols, stablecoin yields, and CFTC authority—pushing markup indefinitely as Senate leadership pivots to housing initiatives. [Bitcoin Magazine]
• Criminal penalties loom as New York and California transform compliance from administrative to existential risk – New York’s proposed CRYPTO Act would criminalize unlicensed virtual currency activity with penalties up to 15 years imprisonment, while California secured a $500,000 settlement against Nexo for unlicensed lending operations, signaling that state-level compliance now carries potential criminal exposure. [Fenwick]
• Oklahoma proposes framework allowing state employees and vendors to receive Bitcoin compensation – Senate Bill 2064 would establish voluntary Bitcoin payment mechanisms for state workers and contractors while exempting digital-asset-only firms from money transmitter licensing, targeting November 2026 implementation if enacted. [Bitcoin Magazine]
• Kansas advances legislation creating state-run Bitcoin reserve fund for unclaimed digital assets – Senate Bill 352 would formalize how Kansas classifies and custodies abandoned crypto-assets under escheatment rules, requiring Bitcoin to remain held within the reserve while permitting 10% of other digital assets to fund state operations. [The Defiant]
• SEC voluntarily dismisses Gemini Earn enforcement action following customer asset recovery – The Commission withdrew its 2023 lawsuit alleging unregistered securities offerings after successful restitution through Genesis bankruptcy proceedings, marking another legacy case closure as Chair Paul Atkins shifts toward formal rulemaking over litigation. [DL News]
• Mango Labs can’t reverse SEC settlement – A Manhattan federal judge denied Mango Labs’ effort to vacate its SEC settlement, ruling that perceived agency policy changes don’t constitute grounds for rescinding consent decrees, underscoring the finality of enforcement agreements regardless of political transitions. [Law360] [Link to Court Order]
• Federal prosecutors decline to retry landmark OpenSea NFT fraud case after conviction vacated – The DOJ’s decision to abandon the “insider trading” prosecution of former OpenSea product manager Nathaniel Chastain signals enforcement challenges in applying traditional fraud statutes to digital collectibles. [Law360]
• CFTC Chair Selig unveils sweeping regulatory review targeting “minimum effective dose” oversight framework – The CFTC is conducting a comprehensive audit of legacy agricultural-era rules to accommodate digital asset market structures and prediction markets, positioning the agency for expanded jurisdiction under potential federal legislation. [The Block]
Institutional Crypto Adoption
• Delaware Life launches first U.S. fixed index annuity offering Bitcoin exposure with principal protection – Through BlackRock’s iShares Bitcoin Trust (IBIT), the insurance carrier integrates crypto returns into retirement products while maintaining volatility controls, marking a milestone in state-regulated insurance product innovation. [CoinDesk] [Cointelegraph]
• UBS prepares pilot program for bitcoin and ether trading among Swiss wealth clients – The world’s largest wealth manager will utilize third-party custody and execution to navigate Basel III capital requirements, with potential expansion to U.S. and Asia-Pacific markets pending regulatory clarity. [Bitcoin Magazine]
• Steak ‘n Shake expands Bitcoin treasury strategy to hourly employee bonus program – Following a $10 million corporate allocation, the fast-food chain now offers workers $0.21 in vested Bitcoin per hour worked via the Fold app, highlighting the intersection of treasury management and employment law. [Bitcoin Magazine]
• DOJ denies liquidation of forfeited Samourai Wallet Bitcoin, affirms Strategic Reserve mandate – Senior advisor Patrick Witt confirmed compliance with Executive Order 14233 requiring retention rather than sale of seized digital assets, establishing a new procedural baseline for criminal forfeiture proceedings. [Bitcoin Magazine]
Digital Asset Infrastructure Evolution
• Gemini’s Nifty Gateway NFT marketplace enters withdrawal-only mode before February 2026 shutdown – The closure reflects Gemini’s strategic consolidation into a “super app” following prolonged NFT market contraction, underscoring the importance of robust custodial wind-down protocols for platform-integrated wallets. [Cointelegraph] [The Block]
• Ledger targets $4 billion NYSE IPO alongside wave of industry public offerings – Partnering with Goldman Sachs, Barclays, and Jefferies, the hardware wallet provider joins Kraken, Consensys, and Animoca Brands in pursuing traditional equity fundraising, signaling maturation and acceptance of rigorous disclosure standards. [DL News]
• Intercontinental Exchange quietly advances blockchain-native settlement for traditional securities – The NYSE parent is building infrastructure for tokenized U.S. equities and ETFs with T+0 settlement, 24/7 trading, and stablecoin funding, partnering with BNY Mellon and Citigroup for custodial integration. [Unchained Crypto]
• Skadden outlines structural requirements for blockchain-enabled fund interests – Sponsors must adopt “fully funded” models and master-feeder structures to ensure token fungibility, while integrating KYC/AML via smart contract “white-listing” to maintain regulatory compliance without manual GP approval. [JD Supra]
Prediction Markets & DAO Governance
• Massachusetts judge authorizes Kalshi sports betting ban, rejecting CFTC preemption argument – The ruling marks the first state-level prohibition in the U.S., with the court dismissing claims that federal commodity futures regulation shields prediction markets from state gambling licensing requirements. [DL News]
• Portugal orders nationwide blocking of Polymarket following surge in election wagering – The SRIJ cited lack of local authorization and prohibitions on political betting, joining France, Germany, and Hungary in classifying decentralized prediction markets under traditional gambling frameworks. [The Block]
• Stanford professor proposes cryptographically committed LLMs as neutral prediction market judges – By locking model versions and prompts to blockchain at contract inception, the approach aims to provide auditable, non-discretionary resolution resistant to manipulation—addressing integrity challenges analogous to ISDA’s CDS market protocols. [a16z crypto]
• Ethereum co-founder identifies five critical use cases requiring decentralized governance – Despite recent failures, Buterin argues “different and better” DAOs are essential for oracle hardening, on-chain dispute resolution, and long-term protocol maintenance—pushing governance back on-chain to reduce reliance on centralized legal entities. [DL News]
AI Regulation & Litigation
• xAI files for preliminary injunction against California’s training data disclosure law – Elon Musk’s firm argues AB 2013 constitutes unconstitutional taking of trade secrets and compelled speech, setting a critical test case for state-level transparency mandates versus intellectual property protections. [Law360]
• Bipartisan “Content Origin Protection” bill would require public AI training dataset registries – The proposed federal legislation mandates developers maintain records of materials used for training, providing copyright holders tools to identify unauthorized use and addressing burgeoning fair use litigation risks. [Law360]
• Senator Markey demands answers on “deceptive advertising” in ChatGPT – The Massachusetts Democrat raised concerns that conversational AI interfaces create manipulation risks by blurring ad disclosure, pressing OpenAI and six other firms for detailed safeguards by February 12th. [The Verge]
• California AG orders xAI to cease enabling sexualized deepfakes – Rob Bonta’s formal order underscores that state attorneys general intend to police generative AI outputs through legacy mandates long before comprehensive federal legislation is enacted. [Law360]
• Federal brief tells Colorado court Midjourney artwork lacks human authorship requirement – The decision reinforces significant hurdles for commercialization of AI-assisted digital assets and highlights ongoing legal uncertainty surrounding ownership and enforcement rights for firms utilizing generative tools. [Law360]
• Eightfold AI lawsuit highlights litigation risks of opaque algorithmic data scraping – The complaint alleges violations of consumer protection statutes through unauthorized personal data collection and “black box” processing, serving as a reminder that proprietary AI models handling sensitive information remain high-velocity enforcement targets. [Law360]
Looking Ahead
This week’s takeaway is clear: compliance strategies must now account for a patchwork of state-level enforcement with divergent philosophies.
Goodbye Nifty Gateway, Hello Node.
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.