Polymarket has taken legal action against Massachusetts officials, seeking to block the state from restricting its prediction markets.

The move comes as U.S. regulators and courts step up scrutiny of platforms that allow users to trade on real-world events, especially in sports.

On Feb. 10, Polymarket filed a lawsuit in federal court against Massachusetts Attorney General Andrea Campbell and state gaming regulators. The company said the threat of enforcement is “immediate and concrete,” following a recent ruling against rival platform Kalshi.

According to Polymarket, state intervention would disrupt its national operations, fragment its user base, and force it to choose between federal compliance and state restrictions. The company argues that its markets fall under federal oversight and should not be treated as local gambling products.

Federal authority vs. state gambling laws

At the center of the case is a dispute over who has the right to regulate prediction markets.

Polymarket says its event contracts are governed by the Commodity Futures Trading Commission. Under federal law, the CFTC oversees derivatives and futures markets, including certain types of prediction products. The company claims this authority overrides state-level gambling rules.

In its complaint, Polymarket pointed to comments made on Jan. 29 by CFTC Chairman Michael Selig, who said the agency would re-assess how it handles cases testing its jurisdiction. Shortly after, the CFTC filed an amicus brief in a related lawsuit involving Crypto.com.

Massachusetts courts have taken a different view. Last week, a state judge refused to pause a ban on Kalshi’s sports contracts, ruling that the platform must follow state gaming laws. The judge said Congress did not intend federal regulation to replace traditional state powers over gambling.

Kalshi has appealed the decision but was denied a stay. The ruling requires the company to block Massachusetts users from sports markets within 30 days.A federal judge in Nevada also recently denied Coinbase’s request for protection from a similar enforcement action, adding to the legal pressure on prediction platforms.

Robinhood, which partners with Kalshi, is now seeking its own injunction in Massachusetts to avoid state licensing requirements.

Growing pressure on prediction platforms

Polymarket’s lawsuit reflects wider tensions between fast-growing prediction markets and state regulators.

In a statement posted on social media, Polymarket chief legal officer Neal Kumar said the company is fighting “for the users.” He argued that state officials are racing to shut down innovation and ignoring federal law.

He added that Massachusetts and Nevada risk missing an opportunity to support new market models that blend finance, data, and public forecasting. State officials have so far declined to comment on the lawsuit.

The case arrives as prediction markets gain mainstream attention. Jump Trading recently made investments in Polymarket and Kalshi, two platforms that have garnered institutional support. According to recent funding rounds, Polymarket is valued at approximately $9 billion. 

Supporters claim that by enabling users to trade on economic, sports, and election data, these markets enhance price discovery and public insight. Many contracts, according to critics, resemble unlicensed gambling and may put users at risk.

If Polymarket succeeds, it could limit the ability of states to regulate prediction markets and strengthen the CFTC’s role nationwide. A loss, however, may encourage more states to impose licensing rules or bans.

TLDR:

• On-chain RWAs continue expanding despite crypto price swings, showing independence from speculative market cycles.
• Institutional data providers now supply pricing and reserve data to support tokenized asset markets.
• Blockchain connectivity systems are becoming essential for linking financial infrastructure with on-chain trading.
• Orchestration tools now manage cross-chain workflows, data feeds, and privacy for complex RWA applications.

The current crypto market cycle is revealing signs of structural change rather than financial stress. Industry data shows fewer systemic failures compared with previous downturns. 

At the same time, real-world assets are steadily moving onto blockchains. These developments suggest a shift in how value forms across digital markets.

On-chain RWAs reshape crypto market structure

Recent commentary from Chainlink co-founder Sergey Nazarov highlighted the absence of major institutional collapses during recent price drawdowns. He contrasted this with past cycles that saw large failures among centralized lenders and exchanges. 

According to Nazarov, the industry now shows stronger risk controls and infrastructure resilience.

He also pointed to continued growth in on-chain RWAs despite volatile crypto prices. Tokenized commodities and financial instruments have expanded across decentralized platforms. This trend indicates that RWA adoption operates independently from short-term crypto market movements.

Data feeds and proof mechanisms now support on-chain trading for assets such as silver and tokenized funds. 

Nazarov noted that on-chain perpetual markets for traditional commodities rival activity seen in permissioned financial venues. These markets rely on transparent pricing and continuous settlement.

The shift has attracted attention from established data providers. 

Chainlink confirmed integrations with institutions, including S&P and ICE, to support pricing and reserve verification for RWAs. These integrations aim to standardize how off-chain financial data enters blockchain systems.

Infrastructure demand grows with institutional adoption of on-chain RWAs

Nazarov identified connectivity as a central requirement for scaling RWA markets. 

Blockchain networks must link with accounting systems, payment rails, and risk management platforms. Chainlink’s interoperability tools have been selected by several Web3 security teams due to their operational track record.

He also emphasized orchestration as a technical layer coordinating multiple systems in one transaction flow. This includes cross-chain operations, off-chain data feeds, and automated settlement processes. 

Chainlink’s Runtime Environment currently supports these workflows for enterprise applications.

Privacy features are also becoming critical for advanced RWA use cases. Nazarov stated that new orchestration tools aim to combine data transparency with confidential execution. These features target institutions that require regulatory compliance and internal controls.

According to Nazarov’s assessment, on-chain RWAs may eventually exceed cryptocurrencies in total on-chain value. 

He described this shift as a transition from speculative markets to functional financial infrastructure. The growth of tokenized assets would still support crypto liquidity by bringing more capital onto blockchains.

TLDR

• XRP ETFs total daily net inflows of $6.31M with a cumulative net inflow of $1.23B as of February 9.
• The XRPC ETF on NASDAQ reports a $2.31M daily inflow, holding net assets of $275.59M.
• GXRP ETF on NYSE has daily inflows of $846.19K, with net assets of $87.44M.
• The Franklin XRPZ ETF sees a daily inflow of $3.15M and holds $236.25M in assets.
• TOXR and Bitwise XRP ETFs report no daily inflows or outflows, maintaining minimal changes.

According to a recent SoSoValue update as of February 9, the total daily net inflow for XRP ETFs stands at $6.31 million, with a cumulative net inflow of $1.23 billion. The total value traded on this day is recorded at $15.89 million.

XRP ETFs See Inflows Across XRPC, GXRP, and XRPZ

The XRP ETF products on various exchanges have reported varying levels of performance. A deep dive on the individual ETFs reveals that the XRPC ETF on NASDAQ, managed by Canary, shows a premium of +0.26%. The daily net inflow for this ETF amounts to $2.31 million, with a cumulative inflow of $411.16 million. It holds net assets of $275.59 million, equating to a 0.31% share of the total XRP market cap.

The GXRP ETF, also on the NYSE and managed by Grayscale, reports a daily inflow of $846.19K. GXRP holds the lowest net assets at $87.44 million, which represents 0.10% of XRP’s total market cap. The market price of this ETF is $28.25, with a daily change of +0.57%.

The Franklin XRPZ ETF, listed on the NYSE, has a daily inflow of $3.15 million. It currently holds $236.25 million in net assets, representing a 0.27% XRP share. Its market price stands at $15.82, with a daily increase of +0.70%.

TOXR and XRP ETFs Record No Inflow or Outflow

The TOXR ETF, trading on CBOE under the 21Shares sponsor, reports no change in daily flow with a cumulative net inflow of $70.22K. With net assets of $178.24 million, it has a minimal XRP share of 0.20%. The ETF shows a market price of $14.19, with a daily change of +0.35%.

On the NYSE, the Bitwise XRP ETF has gained a premium of +0.75%, with no changes in daily inflow and a cumulative net inflow of $357.89 million. This XRP ETF holds net assets of $263.22 million and a 0.30% XRP share. Its market price is $16.35, with a daily change of +0.74%.

From 2023 to 2026, from Hong Kong to a global stage, institutions from around the world convened once again. As the next decade of digital assets unfolds, LTP looks ahead alongside the industry.

What does it feel like to observe—at close range—the front-line pulse of digital assets and traditional finance (TradFi) amid market volatility?

On Feb. 9, 2026, Liquidity 2026, the annual flagship institutional digital asset summit hosted by LTP Hong Kong, concluded successfully in Hong Kong. Now in its fourth consecutive year, the event once again brought together senior representatives from hedge funds, market makers, high-frequency trading firms, family offices, asset managers, exchanges, custodians, banks, and technology service providers, marking another milestone in the accelerating convergence of digital assets and traditional financial markets.

Throughout the full-day agenda, the summit featured keynote addresses, fireside chats, and in-depth roundtable discussions. Speakers and participants engaged in rigorous exchanges around the evolution of the global financial system, the rise of tokenization, and the rapid integration of multi-asset ecosystems—exploring what new opportunities and new paradigms may emerge as institutional adoption deepens.

As the summit drew to a close, a clear consensus emerged across diverse perspectives: at a turning point in the reshaping of the global financial landscape, infrastructure development, regulatory dialogue, and cross-institutional collaboration will be the critical variables shaping the industry’s sustainable growth.This was not merely a forum for ideas, but a defining step in the digital asset industry’s progression toward standardization, institutionalization, and mainstream relevance.

Full Agenda Highlights and Key Takeaways

At Liquidity 2026, LTP convened global experts to examine the future of institutional digital asset markets through multiple lenses—including core infrastructure, liquidity connectivity, tokenization, and emerging market paradigms.

Multi-Asset Trading and Market Convergence: Compatibility and Resilience

Participants broadly agreed that crypto assets are increasingly being redefined as a core asset class that must be integrated into institutional portfolio management frameworks, rather than treated as a standalone alternative market. Stephan Lutz, CEO of BitMEX, noted that CIOs can no longer afford to ignore this asset class. As institutions formally incorporate digital assets into allocation frameworks, the design logic of trading systems is shifting—from pursuing peak performance to enabling seamless integration within existing governance structures, API architectures, and risk controls.

System resilience was repeatedly emphasized. Tom Higgins, Founder and CEO of Gold-i, remarked during a roundtable that system design must assume failure as inevitable, with redundancy and survivability achieved through multi-venue aggregation. At a macro level, regulatory fragmentation remains a key obstacle to global market interoperability; without cross-jurisdictional alignment, genuine multi-asset convergence will remain constrained.

The New Settlement Layer: Clearing, Custody, and Interoperability

Discussions around settlement and custody pointed to a clear direction: custodians are evolving from passive asset safekeeping toward becoming a core infrastructure layer supporting clearing, settlement, and risk management. As institutional participation grows, custody is no longer viewed solely as a compliance requirement, but as a critical nexus connecting regulatory certainty with operational scalability.

The definition of trust is also evolving. Ian Loh, CEO of Ceffu, emphasized that trust must be embedded in executable on-chain mechanisms, with assets generating tangible yield through collaboration between custodians and prime brokers. The importance of mature third-party technology has become increasingly evident. Amy Zhang, Head of APAC at Fireblocks, highlighted the industry’s growing reliance on established infrastructure providers, noting that Europe is emerging as a strategic hub for institutional digital assets due to its regulatory clarity and infrastructure maturity.

Technological redundancy was widely seen as essential to mitigating systemic disruptions. As Darren Jordan, Chief Commercial Officer at Komainu, observed, the future of custody lies in asset usability—shifting the core question from whether assets are safely stored to whether they can be securely and reliably mobilized.

Rebuilding Infrastructure and the Price of Data

Johann Kerbrat, SVP and GM of Robinhood Crypto, shared how Robinhood is evolving from a crypto trading platform into a general-purpose financial infrastructure provider, leveraging blockchain to re-architect payments, settlement, and traditional asset trading—while abstracting complexity away from the end user.

In his view, TradFi’s core bottleneck remains settlement efficiency, often operating at T+1 or longer, whereas crypto-native systems offer 24/7 availability, near-instant transfers, and composability that materially reduce capital costs and counterparty risk. Within regulatory frameworks, Robinhood is advancing equity tokenization on a fully collateralized, 1:1 basis, anticipating that tokenization will expand beyond stablecoins into equities, ETFs, and private markets. The central challenge, he argued, lies not in technology, but in regulatory implementation and collective adoption.

Cory Loo, Head of APAC at Pyth Network, described market data as a structurally underappreciated industry—generating over $50 billion in annual revenue, with data costs rising more than 15-fold over the past 25 years. The true cost, he noted, stems not from information asymmetry, but from data quality, which ultimately determines whether traders achieve best execution.

Pyth Network aims to reconstruct traditional data pipelines by bringing price inputs directly from trading firms and exchanges into a shared price layer, which is then redistributed to institutions at higher quality and lower cost with millisecond-level multi-asset updates. Loo disclosed that Pyth Pro attracted over 80 subscribers within two months of launch, achieving more than $1 million in ARR in its first month. The project also plans to implement a value-capture mechanism whereby subscription revenue flows into a DAO, which repurchases tokens and builds long-term reserves.

Institutional Capital Allocation: From Speculation to Systematic Exposure

A notable shift in capital allocation is underway. Institutional capital is rotating away from narrative-driven assets toward instruments with clear demand drivers and regulatory visibility. Fabian Dori, CIO of Sygnum, observed that as metaverse narratives faded, institutions have refocused on leveraging smart contracts for value-chain integration and process automation. Risk management has increasingly displaced return speculation as the primary screening criterion.

Tokenization is widely expected to drive structural, rather than incremental, change—but scale will depend on demonstrable client demand rather than technological capability alone. Interest in index-based and structured products is rising, and Giovanni Vicioso, Global Head of Cryptocurrency Products at CME Group, noted that the future market landscape will likely be defined by the coexistence of multiple technologies and market structures.

Trading Convergence: Bridging Liquidity, Pricing, and Risk

In discussions on liquidity and risk management, participants focused on system stability during extreme market conditions. Jeremi Long, CIO of Ludisia, highlighted how infrastructure upgrades have materially improved execution quality, while emphasizing that risk management must be designed for worst-case scenarios.

Improving cross-venue capital efficiency was identified as a key solution to fragmented capital deployment. Collaborative models between exchanges and custodians—enabling shared capital pools—are increasingly being explored. In this context, transparency has become paramount. Giuseppe Giuliani, Vice President of Kraken’s Institutional team, stressed that liquidity depends on risks being clearly priced, and that exchange transparency and operational stability directly influence market-maker participation.

Building Institutional Rails for the Digital Asset Economy

At the institutional and infrastructure level, multiple case studies suggest a shift from proof-of-concept to real-world deployment. Stablecoin pilots in insurance and payments demonstrate the tangible efficiency gains of on-chain settlement. Some institutions are now exploring migrating flagship products directly on-chain to access broader global liquidity.

System stability is increasingly viewed as a form of revenue protection. Zeng Xin, Senior Web3 Solutions Architect at AWS, noted that stability functions as “income insurance,” with cloud infrastructure providing the resilience and elasticity required for digital markets. Meanwhile, traditional regulatory frameworks continue to impose structural constraints on capital allocation.

Sherry Zhu, Global Head of Digital Assets at Futu Holdings Limited for Futu Group, emphasized that trust and convenience represent core opportunities for brokerage platforms, while acknowledging the capital constraints imposed by frameworks such as Basel. Balancing compliance, privacy, and custody remains a critical threshold for institutional participation in DeFi.

Everything as Collateral: RWA, Stablecoins, and Tokenized Credit

Debates around whether tokenized assets can serve as core collateral are moving from theory to practice. Compared with traditional structures, on-chain collateral—enabled by 24/7 settlement—is better suited to meet sudden margin requirements in derivatives markets. However, legal clarity remains the determining factor.

Chetan Karkhanis, SVP at Franklin Templeton, emphasized the importance of choosing natively on-chain asset structures rather than digital replicas, ensuring a single source of legal truth. Regulatory classification and its impact on capital requirements are equally critical. Institutions evaluating tokenized collateral tend to focus on four dimensions: legal ownership, operational risk, custody arrangements, and liquidity depth.

Beyond the Hype: Where the Industry Goes Next

As the summit concluded, participants converged on a shared view: tokenization alone does not constitute a competitive advantage. The true differentiator lies in whether it delivers measurable improvements across reserves, trading, or settlement.

Erkan Kaya, CEO of ABEX, suggested that tokenization has the potential to fully absorb traditional finance into crypto-native systems, with a tipping point likely to emerge over the next decade. As regulatory credentials, system stability, and user experience become decisive factors, the evolution of financial infrastructure appears irreversible. Digital assets are no longer a peripheral complement to TradFi, but a force increasingly capable of reshaping its operating logic and power structures.Moses Lee, Head of APAC at Anchorage Digital, summarized the sentiment succinctly: tokenization does not equal success—its value depends on delivering clear functional advantages in reserves, trading, or settlement.

Closing Thoughts

For LTP, the industry’s transition into a more mature phase—marked by the fading of hype—also represents the optimal moment for infrastructure, compliance, and sustainable innovation to take root. We remain firmly convinced that lasting value creation resides in the foundational systems that quietly support market operations.

From 2023 to 2026, from regional markets to a global perspective, LTP has remained committed to observing, documenting, and actively participating in the structural, institutional, and regulatory evolution of the digital asset industry. The successful conclusion of Liquidity 2026 marks another meaningful milestone in our long-term effort to advance the integration of digital assets and TradFi.

Looking ahead, LTP will continue to invest heavily in ecosystem development—championing more resilient infrastructure and more open collaboration—to help shape the next decade of digital assets.

With infrastructure build-out, regulatory engagement, and cross-institutional collaboration converging, a healthier, more professional, and increasingly mainstream digital asset era is taking shape.

While Liquidity 2026 has just concluded, the marathon toward deep digital asset–TradFi integration is only entering its second half. As a long-term participant and observer, LTP will continue to dedicate resources to ecosystem building and industry dialogue, helping to usher in the next decade of digital assets.

A full post-event report, including detailed roundtable highlights and key speaker insights, will be released shortly. Stay tuned.

About LTP

LTP is a global institutional prime broker, purpose-built to meet the evolving needs of digital asset market participants. By applying traditional financial standards to blockchain innovation, LTP provides end-to-end prime services spanning trade execution, clearing, settlement, custody, and financing. Its offerings further extend to institutional asset management, regulated OTC block trading, and compliant on/off-ramp solutions — delivering a secure and scalable foundation for institutions across the digital asset ecosystem.

LiquidityTech Limited is HK SFC licensed for Type 1, 2, 4, 5, and 9 regulated activities.

Liquidity Technology Limited is BVI FSC licensed to act as a Virtual Asset Service Provider and licensed under SIBA for Dealing in Investments activities.

Liquidity Technology S.L. is registered with Bank of Spain as a Virtual Asset Service Provider.

Liquidity Fintech Pty Ltd AUSTRAC registered for digital currency exchange, remittance, and foreign exchange service provider activities.

Liquidity Fintech Investment Limited is BVI FSC licensed to provide investment management services.

Neutrium Trust Limited is registered as a Trust Company under the Trustee Ordinance and licensed as a Trust or Company Service Provider under AMLO.

Liquidity Fintech FZE, granted In-Principle Approval (IPA) by the Dubai VARA for a VASP licence (note: IPA does not permit regulated activities).

Disclaimer: All regulated activities are performed exclusively by the relevant entities that are duly licensed or registered, and strictly within the boundaries of their respective regulatory approvals and jurisdictions.

More details: https://www.liquiditytech.com

Backpack, a crypto exchange founded by former employees of FTX, says it will launch a 1-billion-supply token in the future, with its distribution schedule tied to its goal of going public in the US.

Backpack posted to X on Monday that its token launch will begin with 25% of the intended supply, or 250 million tokens, to become available on a yet-to-be-disclosed launch date.

Another 37.5% of the total supply, or 375 million pre-IPO tokens, will be made available “upon achievement of key milestones,” which Ferrante said would include opening in a new region or launching a new product.

The remaining 375 million post-IPO tokens would be locked until a year after the company goes public, with the tokens held strategically in a corporate treasury.

The IPO push comes as Axios reported on Monday that Backpack is in discussions to raise $50 million at a $1 billion pre-money valuation, potentially making it the crypto industry’s latest unicorn.

In a separate post, Backpack co-founder and CEO Armani Ferrante wrote on X on Monday that the “guiding principle” for its token unlocks was that “insiders ‘dumping on retail’ should be impossible.”

Ferrante, an early employee at the FTX-linked Alameda Research, added that none of the Backpack team or investors should gain wealth from the token “until the product hits escape velocity,” which he said would happen when the company launches an initial public offering.

“Going public might happen quickly, it might happen not so quickly, and in fact, it might not happen at all,” Ferrante said. “In any case, we’re going for it.”

Related: Backpack Exchange launches beta testing of prediction market platform

Ferrante said that “not a single founder, executive, team member, or venture investor has been given a direct token allocation,” and that the team instead owns equity in the company.