Tornado Cash Delisted, ETH Staking Gains Steam, and Institutions Double Down on Crypto

TL;DR

• The U.S. Treasury removed Tornado Cash and related addresses from its sanctions list, though legal proceedings for its developers continue.
• Strategy (MSTR) raised $711M in a preferred stock sale, signaling fresh bitcoin purchases that could push its holdings past 500,000 BTC.
• The total stablecoin market cap surpassed $230B, driven by institutional growth and supportive rhetoric from President Trump.
• NYSE filed to allow Bitwise’s Ethereum ETF to stake ETH, as BlackRock highlights the yield potential of next-gen crypto ETFs.
• Ripple CEO Brad Garlinghouse announced the SEC case against the company has officially ended, sending XRP prices higher.
• A Coinbase/EY-Parthenon survey shows over 75% of institutional investors plan to increase crypto exposure in 2025, citing regulatory clarity and growing product maturity.

U.S. Treasury Removes Tornado Cash from Sanctions List, but Legal Uncertainty Remains

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has officially removed Tornado Cash from its sanctions list, reversing a years-long designation that barred U.S. entities from interacting with the crypto mixing tool. The move follows a federal appeals court ruling last November, which found that Tornado Cash’s smart contracts could not be sanctioned because they weren’t the “property” of any specific foreign national.

While more than 100 Ethereum addresses tied to Tornado Cash have been lifted from the Specially Designated Nationals (SDN) list, broader legal uncertainties persist. Roman Storm, one of the protocol’s developers, still faces trial this July over allegations of conspiracy to violate sanctions—specifically, those targeting North Korea’s Lazarus Group. A recent attempt by his legal team to dismiss the charges was rejected, with a judge ruling that the legality of the smart contracts does not invalidate the conspiracy allegations.

In a statement, Treasury Secretary Scott Bessent warned that the U.S. remains focused on shielding the digital asset ecosystem from exploitation by state-backed hackers. The agency has also suggested in court filings that fully vacating Tornado Cash’s designation could create “disruptive consequences” for law enforcement and national security, signaling that its cautious stance toward crypto privacy tools is far from over.

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Strategy Raises $711M in Preferred Stock Sale to Fund More Bitcoin Purchases

Strategy (MSTR) has raised approximately $711 million in a newly upsized offering of its 10% Series A Perpetual Strife Preferred Stock, signaling the company’s intent to further expand its already-massive bitcoin holdings. Initially targeting $500 million, Strategy increased the size of the sale to 8.5 million shares at $85 each, reflecting strong investor demand for the high-yield instrument.

Unlike the company’s earlier STRK issuance, which featured an 8% coupon and the option to convert into common stock, this new Series A offering carries a 10% yield and no conversion rights. The structure is designed to attract institutional capital without diluting existing shareholders—while maintaining a focused strategy of leveraging capital markets to accumulate more bitcoin.

With more than 499,200 bitcoin on its books prior to this raise, Strategy’s next purchase could push its stack past the 500,000 mark. The firm remains one of the largest institutional holders of bitcoin globally. As of Friday morning, Strategy’s shares were trading slightly lower in premarket activity, hovering just below $300, while bitcoin remained steady at $84,000.

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Stablecoin Market Cap Surpasses $230B as Institutions and Regulators Embrace Growth

The total market capitalization of stablecoins has exceeded $230 billion for the first time, fueled by renewed institutional demand and supportive U.S. policy signals. According to DefiLlama data, the stablecoin sector has grown by over $2.3 billion in the past week alone, and is now 56% larger than it was a year ago. Tether (USDT) continues to lead the market with a 62.6% share, while Circle’s USDC follows with $59 billion in capitalization.

This milestone marks a strong recovery from the lows of 2022, when the collapse of the Terra-Luna ecosystem and failures of major crypto firms like FTX and Celsius triggered a sharp contraction in stablecoin usage. Since mid-2023, however, the sector has rebounded, supported by expanding institutional activity. Analysts note that firms like PayPal entering the space, and legal reforms in the U.S. and Hong Kong, have lowered barriers for banks and asset managers to engage with stablecoins.

Policy momentum has also been a key driver. During a Thursday conference, President Trump reiterated his commitment to expanding the use of dollar-pegged stablecoins as a tool to reinforce U.S. economic leadership. Since the start of his administration in January, the market cap of stablecoins has grown by approximately $20 billion. Ongoing legislative efforts—like the GENIUS Act and the expected finalization of a stablecoin regulatory framework—signal further tailwinds for institutional adoption and cross-border payment use cases.

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Momentum Builds for Ethereum ETF Staking as NYSE and BlackRock Signal Support

Efforts to enable staking for spot Ethereum exchange-traded funds (ETFs) are accelerating, with BlackRock and NYSE Arca both making notable moves this week. On Thursday, NYSE Arca filed a proposed rule change that would allow Bitwise’s ether ETF to stake its assets, potentially generating yield for investors. The filing follows similar proposals from Grayscale, 21Shares, and Fidelity, signaling growing industry alignment around staking as the next phase in Ethereum ETF evolution.

Speaking at a conference the same day, BlackRock’s Head of Digital Assets Robert Mitchnick emphasized the importance of staking to unlock additional returns. “A staking yield is a meaningful part of how you can generate investment return in this space,” Mitchnick said, noting that none of the initial ether ETFs launched with staking functionality. While such features were seen as unlikely under the prior SEC leadership, the more accommodative stance of the current administration has opened the door to new possibilities.

Ethereum ETFs have underperformed their Bitcoin counterparts in terms of assets under management, with BlackRock’s ether fund holding just $2.3 billion compared to nearly $48 billion in its bitcoin ETF. Industry leaders argue that allowing staking could materially enhance the appeal of Ethereum ETFs, helping to close the gap and attract more institutional capital. While regulatory and operational complexities remain, market participants believe approval would represent a step-change for Ethereum-based financial products.

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Ripple Declares Victory as SEC Lawsuit Officially Ends, XRP Spikes

Ripple CEO Brad Garlinghouse announced on Wednesday that the company’s years-long legal battle with the U.S. Securities and Exchange Commission has officially concluded. “This case has ended. It’s over,” Garlinghouse posted to X, marking a major milestone in one of the most closely watched enforcement actions in crypto history. XRP, the token central to Ripple’s operations, surged over 8% following the news, briefly trading above $2.50 before paring gains.

The SEC initially filed suit in December 2020, alleging Ripple had raised $1.3 billion through the unregistered sale of XRP, which the agency classified as a security. The case saw several twists over the years, including a partial victory for Ripple in July 2023, when Judge Analisa Torres ruled that XRP sales on public exchanges did not constitute securities transactions. However, she found that Ripple’s direct sales to institutional clients did violate securities laws, leading to a $125 million fine imposed on the firm last August.

Although the SEC has not yet voted to formally drop its appeal, the agency’s recent pattern of retreat from enforcement actions suggests that the Ripple case is no longer a priority. The lawsuit’s conclusion follows a string of similar decisions, including the dropping of cases against Coinbase, Kraken, and other major platforms. This trend reflects the SEC’s changing posture under the new administration, which has taken a markedly more constructive approach to regulating digital assets.

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Coinbase Study Finds 75% of Institutions Plan to Increase Crypto Exposure in 2025

A recent survey from Coinbase and EY-Parthenon reveals that institutional interest in crypto is far from cooling off. According to the study, more than 75% of over 350 institutional investors surveyed said they expect to increase their allocations to digital assets in 2025, with 59% planning to allocate more than 5% of their assets under management to crypto or related products. The findings were published Tuesday in a Coinbase blog post and highlight growing demand for tokenized assets, DeFi, and regulated exposure vehicles like ETFs.

The survey was conducted in mid-January as bitcoin surged toward its all-time high of over $108,000, and just before the Trump administration took office. Respondents cited regulatory clarity as the top factor influencing their decision to boost allocations—underscoring how a more constructive U.S. regulatory stance is likely to unlock additional inflows. The study also found that 60% of investors prefer to access the asset class through registered investment vehicles, a nod to the growing institutional popularity of spot crypto ETFs.

EY’s Paul Brody noted that demand is expanding from high-net-worth individuals and family offices to a broader institutional base. While volatility has returned to the market in recent weeks, Brody pointed to the potential impact of falling interest rates as a catalyst for further DeFi adoption. "There are a lot of use cases for DeFi,” he said, “but in the institutional space, demand will really take off if interest rates come down.”

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