01-27-2026 
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U.S. digital asset market structure legislation proved no match for Mother Nature, while the barriers protecting the government’s digital assets apparently proved no protection from insider crooks.
- Market structure hearing delayed, amendments filed
- Bankers not letting up on stablecoin ‘rewards’ issue
- OCC rejects Liz Warren’s demands to slow-roll WLF bank application
- Trump wants $5 billion from JPM for debanking
- SEC drops Gemini suit over Earn debacle
- Crypto custodians linked to theft of U.S. government BTC?
On Monday, the Senate Agriculture Committee rescheduled the planned Tuesday markup session of its market structure legislation (the Digital Commodity Intermediaries Act) for Thursday (January 29) at 10:30 EST. The rescheduling followed one of the worst winter storms in U.S. history that shut down Washington’s airport and will delay some senators’ return to D.C. from their home states.
Regardless of the timing, the Ag committee’s draft remains a purely partisan affair, having failed to secure buy-in from the committee’s Democratic members. While representatives from both parties claim to be still interested in resolving their areas of disagreement, other factors may come to bear that prevent the Ag bill or the companion bill by the Senate’s Banking Committee from making it to the Senate floor for a vote this year.
The January 24 shooting of Minnesota resident Alex Pretti by U.S. Immigration and Customs Enforcement (ICE) has outraged Democrats and even some Republicans. The possibility now exists that, unless the GOP is willing to discuss reining in ICE’s tactics, Dems could withdraw support for government funding bills, resulting in yet another federal government shutdown.
The last shutdown, which ended on November 12, was the longest in U.S. history. The digital asset sector is increasingly concerned that concerns over ICE, along with a Congressional turn toward addressing the ‘affordability’ crisis, could push crypto legislation way down the priority list. And with November’s midterm elections soon to turn one-third of the Senate’s focus to getting re-elected, there’s a real possibility that the market structure push could come up short this year.
Meanwhile, the Ag committee’s Dems have been filing proposed amendments to the market structure draft that will be discussed on Thursday. These amendments include a pair from Minnesota’s Amy Klobuchar: one would delay implementation of the legislation until “at least four” commissioners are appointed to the normally five-member Commodity Futures Trading Commission (CFTC), which currently features only Chairman Michael Selig.
In addition, “not fewer than 2” of these CFTC commissioners would require the approval of Klobuchar, the committee’s ranking member. This is a nod to the ‘quorum’ issue that Dems on both committees have cited as a major concern. Simply put, the Trump administration has shown scant interest in nominating any new commissioners—for either the CFTC or the Securities and Exchange Commission (SEC)—let alone those that would ensure minority party representation.
A number of amendments proposed by Michael Bennett (D-CO) would address the similarly thorny ‘ethics’ issue by prohibiting digital asset transactions by elected officials, their family members, and candidates for public office. Dems have repeatedly flagged concerns over the ever-widening list of lucrative crypto asset ventures involving President Donald Trump and his family, but the GOP appears unwilling to take any step that might annoy the current occupant of 1600 Pennsylvania Ave.
Dick Durbin (D-IL) proposed a pair of amendments: one would prohibit federal bailouts of digital asset issuers like 2023’s $3.3 billion bailout of stablecoin-issuer Circle (NASDAQ: CRCL), while the other seeks to prevent fraudulent transactions at digital asset kiosks/ATMs, a problem that has been getting more press of late..
On the other side of the partisan divide, Jerry Moran (R-KS) proposed prohibiting “interference” in U.S. crypto markets “by entities organized or established in a foreign adversary.” The bill would prohibit any U.S.-approved crypto operator from deriving income from, or employing staff and basing digital asset infrastructure in, countries like China (including Hong Kong), Cuba, Iran, North Korea, and Russia.
A bipartisan effort was offered by Durbin and Roger Marshall (R-KS), who sought to include their years-long effort to force credit card companies to limit their swipe fees and share their payment rails with other companies. However, Politico reported Monday that Marshall wouldn’t press the issue at Thursday’s markup. Marshall was reportedly subjected to pressure from the White House, which doesn’t appear eager to further antagonize a banking lobby that already has major issues with market structure plans.
Bankers not backing down on stablecoin rewards
Last week, the American Bankers Association (ABA) released its top policy priorities for 2026, and the stablecoin ‘yield v reward’ issue was at the top of this list. Specifically, the ABA called on Congress to “Protect Local Lending: Stop payment stablecoins from becoming deposit substitutes that slash community bank lending by prohibiting paying interest, yield or rewards regardless of the platform.”
The GENIUS Act that Congress approved last summer prohibited stablecoin issuers from offering yield or interest to token holders. But third-party platforms like the Coinbase (NASDAQ: COIN) digital asset exchange are offering ‘rewards’ to their customers for holding those same stablecoins. The traditional banking sector claims that the further spread of this practice will result in massive ‘deposit flight’ as bank customers seek higher returns.
The Senate Banking market structure bill was thrown into chaos earlier this month when Coinbase withdrew its support for the committee’s draft on the eve of a since-scrapped markup session. While Coinbase claims to have a number of concerns with the draft as written, CEO Brian Armstrong called stablecoin rewards his company’s “biggest” concern (it accounts for ~20% of Coinbase’s revenue).
In an interview with the All-In podcast from Davos last week, Armstrong repeated his mantra that Coinbase’s rewards aren’t interest, claiming that “rewards can’t be based solely on the balance you’re holding. The customer has to do some sort of other activity like payments or trading or they have a subscription to Coinbase One.” (The latter isn’t actually an activity, but we digress.)
And yet, the Senate’s latest draft contained a proposal by Angela Alsobrooks (D-MD) that would allow rewards based on customers engaging in certain stablecoin-related activities. Moreover, the draft defined said activities so broadly that Alsobrooks reportedly took exception to the plan.
OCC rejects Liz Warren’s demands for WLF bank scrutiny
One of the ABA’s other 2026 priorities was removing “barriers to new bank formation by facilitating a timely, transparent and tailored approval process that promotes competition.” On this, the banks and crypto are actually aligned, as a number of digital asset operators received conditional approval of their de novo applications for national trust bank charters last December. Crypto-friendly UK fintech Revolut will soon join this application queue, but a different applicant is attracting more attention than the others.
Earlier this month, Sen. Elizabeth Warren (D-MA) wrote a letter to Jonathan Gould, chief of the Treasury Department’s Office of the Comptroller of the Currency (OCC). Warren sought a delay in the OCC’s review of the recently filed bank charter application by an offshoot of World Liberty Financial (WLF), the Trump-linked decentralized finance (DeFi) platform.
Warren urged Gould to delay the review until Trump and his sons—all three of whom are WLF co-founders—had fully divested from WLF. Warren told Gould that she had “no confidence” that he would apply rigorous analysis of the WLF application due to Gould’s alleged “willingness to rubber stamp the President’s dangerous agenda during your tenure as Comptroller.”
On January 23, Gould replied to Warren, saying the OCC “is committed to following all applicable laws and regulations, including those governing the chartering application and review process, for all applications submitted for the OCC’s consideration.” Gould claimed the WLF review would be “an apolitical and nonpartisan process.”
But Gould couldn’t resist taking a shot at Warren, a major Trump critic, saying, “Congress has made clear that the OCC has a duty to act on the applications it receives in a timely manner. The OCC intends to act consistent with this duty rather than your demand.”In response, Warren told the Washington Examiner that the president’s “unprecedented crypto corruption has metastasized to the banking system.” She claimed “the OCC’s review is a sham. We have never seen financial conflicts of this magnitude and no crypto market structure legislation should pass Congress without guardrails to stop this kind of corruption.”
Trump sues JPM over debanking
Sticking with banking, Trump has made good on his threat to sue JPMorgan (NASDAQ: JPM) for ‘debanking’ both himself and the Trump Organization following the January 6, 2021, riot at the Capitol building in Washington.
On January 17, Trump threatened to sue JPM for “incorrectly and inappropriately DEBANKING me” following what Trump called the “protest” by his supporters. On January 22, Trump’s attorneys filed suit against both JPM and its CEO Jamie Dimon, with whom Trump has occasionally sparred.
Trump is seeking $5 billion for the alleged JPM debanking and accuses Dimon & Co of doing so because they “believed that the political tide at the moment favored doing so.” The suit alleges that JPM’s actions were part of “a systemic, subversive industry practice that aims to coerce the public to shift and re-align their political views.”
A JPM spokesperson told Politico that the company believes “the suit has no merit.” However, displaying full awareness of Trump’s mercurial nature and sensitivity to slights, the statement added that the company “respect[s] the President’s right to sue us and our right to defend ourselves—that’s what courts are for.”
The ‘debanking’ issue is a favorite bugaboo of the crypto sector, which views itself among the prime targets of Operation Choke Point 2.0, the alleged effort by the Biden administration to deny financial services to individuals and entities it didn’t like. Trump’s administration has since dismantled most of the barriers previously separating crypto operators from banking services, but the sense of victimization is dying hard.
SEC dropping Gemini complaint
This weekend’s winter storm also impacted the planned summit by the chairs of both the CFTC (Selig) and SEC (Paul Atkins). The pair had booked off Tuesday to discuss “harmonization between the two agencies and their efforts to deliver on President Trump’s promise to make the United States the crypto capital of the world,” but this event has now been rescheduled for Thursday at 2pm EST.
Inclement weather hasn’t derailed the SEC’s efforts to torpedo all litigation against digital asset operators initiated under the regulator’s previous leadership. On January 23, the SEC and the Gemini (NASDAQ: GEMI) exchange filed a joint stipulation with the U.S. District Court for the Southern District of New York seeking to dismiss (with prejudice) the civil complaint filed against Gemini in January 2023.
The SEC’s previous leadership accused Gemini of selling unregistered securities in connection with the company’s Gemini Earn program. The complaint followed the collapse of Digital Currency Group’s now defunct Genesis lending division, to which Gemini had unwisely loaned nearly $1 billion of its Earn customers’ digital assets.
While Gemini paid a $50 million penalty in 2024 to New York’s Attorney General for defrauding the state’s Gemini Earn customers, funds recovered from the Genesis bankruptcy settlement, plus an additional $40 million top-up from Gemini, allowed for a 100% ‘in-kind’ return of Earn customers’ losses. As such, the SEC considers the dismissal of its claims against Gemini to be “appropriate.”
A year ago, Cameron Winklevoss—who runs Gemini along with his twin brother Tyler—announced that the SEC’s new leadership had informed the company that the agency wouldn’t recommend an enforcement action against Gemini. At the time, Cameron complained that it was “wholly unacceptable for an agency like the SEC to bully, harass, and attack a lawful industry.”
So far, neither Cameron nor Tyler nor Gemini itself has publicly commented on the SEC complaint dismissal, possibly because it still requires court approval. Regardless, investors were underwhelmed, as Gemini’s share price continues to fall in lockstep with the price of prominent tokens like BTC. Gemini’s shares closed Friday at $9.72, down 3% for the day and at less than one-third of the price it enjoyed when Gemini went public last September.
Who custodies the custodians?
Last week brought the year’s first initial public offering (IPO) of a digital asset firm as crypto custodian BitGo (NASDAQ: BTGO) made its Nasdaq debut. In what is now a predictable pattern, the shares initially soared but retreated below the $18 IPO price the very next day. The shares shed a further 8% on Monday, closing at $13.32.
Custodying digital assets is proving harder than it looks given recent news that the U.S. Marshalls Service (USMS) may have lost tens of millions of dollars’ worth of the digital assets it’s seized from criminals over the years. Worse, one of the government’s custodial contractors appears to have a connection to this heist.
The brouhaha began last week when blockchain sleuth ZachXBT reported that a threat actor named John ‘Lick’ Daghita had gotten into a livestreamed war of words with another hacker over who had the fattest digital wallets.
In the process of backing up his wallet claims with video evidence, Daghita inadvertently revealed control over TRON-based wallets tied to thefts of millions of dollars’ worth of tokens from both the U.S. government and other victims. Some of the tokens stolen from the government were part of the over 94,000 BTC seized by the government from the individuals responsible for the 2016 hack of the Bitfinex exchange.
ZachXBT went on to reveal that Daghita’s father, Dean Daghita, owns Command Services & Support (CMDSS), a self-proclaimed “proven provider of mission-critical services to the Department of Defense and Department of Justice.” Last February, CoinDesk reported that CMDSS had won a USMS contract in 2024 to custody some of the government’s tokens.
(Ironically, BitGo was originally awarded the main token custody contract in 2021, but this was revoked after the government determined BitGo didn’t meet the contract’s required definition of a ‘small business.’ The contract ultimately went to Coinbase.)
The USMS has repeatedly come under fire for lacking a proper accounting of what types of tokens it has and how many of each are under its control. Recent suspicions that the federal government had sold some of the seized BTC under its control forced White House crypto advisor Patrick Witt to confirm that the tokens in question “have not been liquidated and will not be liquidated.”
On January 26, Witt tweeted a reply to ZachXBT’s thread discussing the alleged USMS heist, saying, “On it. More to follow.” Meanwhile, the younger Daghita responded to ZachXBT’s tweets by publicly daring the authorities to apprehend him if they can. Shrewd.
President Trump issued an executive order last year establishing both a Strategic Bitcoin Reserve and a Digital Asset Stockpile. The order prohibited the government from selling the BTC in its possession but crypto bros continue to press the government to (a) conduct and release an audit of its token holdings, and (b) figure out a creative way to buy more BTC that doesn’t involve spending taxpayer funds.
Watch: What’s ahead for crypto regulation? Highlights from Blockchain Futurist Conference 2025
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