Crypto World
Grayscale to Turn AAVE Trust into ETF on NYSE Arca
Grayscale has filed with the U.S. Securities and Exchange Commission to convert its Aave-tracking trust into an exchange-traded fund, signaling a continuing push to bring decentralized-finance exposure to mainstream investors. The filing, disclosed via a Form S-1 on February 13, 2026, envisions renaming the vehicle the Grayscale Aave Trust ETF and listing on NYSE Arca under the ticker GAVE, with Coinbase serving as custodian and prime broker. If approved, the product would hold AAVE tokens directly, rather than using a mix of securities and assets. Aave, a cornerstone of DeFi, currently dominates borrowing and lending activity across multiple chains and has drawn sustained investor interest despite broader market softness.
Key takeaways
- Grayscale aims to convert its Aave Trust into an NYSE Arca-listed ETF (GAVE) with a 2.5% management fee, and Coinbase would act as custodian and prime broker.
- The filing makes Grayscale the second U.S. firm to seek regulatory approval for an ETF tied to AAVE, joining Bitwise in a growing field of altcoin ETFs.
- Grayscale would hold AAVE tokens directly in the fund, contrasting with Bitwise’s approach that blends a substantial token stake with traditional securities to track AAVE exposure.
- AAVE remains the largest DeFi protocol by total value locked, a lens through which the ETF product could unlock liquidity for users and risk-managed investors alike.
- EU-listed products, including 21Shares’ AAVE ETP in Nasdaq Stockholm, illustrate a global appetite for regulated crypto access even as the U.S. market weighs its own framework.
Tickers mentioned: $AAVE
Sentiment: Neutral
Market context: The push for crypto ETFs persists even as risk sentiment remains cautious in the broader markets. Regulators are scrutinizing novel structures that blend regulated investment vehicles with direct token holdings, a trend that continues to shape the way institutions access DeFi assets.
Why it matters
The Grayscale filing underscores a sustained appetite among traditional market participants to provide regulated access to key crypto rails, particularly in decentralized finance. By proposing to hold AAVE tokens directly, the Grayscale Aave Trust ETF would deliver a relatively simple, token-centric exposure that mirrors the underlying protocol’s on-chain activity. This structure could appeal to investors seeking a transparent, single-asset vehicle that tracks a well-established DeFi protocol without the complexities of a blended equity-and-token approach.
From a market-theory perspective, a direct-token ETF has the potential to increase liquidity and price discovery for AAVE, a token that sits at the core of a multi-chain lending and borrowing ecosystem. AAVE (CRYPTO: AAVE) powers collateralized lending across different networks, and its token economics include staking opportunities that reward participants for securing the platform’s stability. If the fund gains approval, it would provide a familiar, U.S.-listed conduit for macro investors to gain leverage to DeFi yields and protocol growth while mitigating some idiosyncratic risk through ETF mechanics. The decision could also influence how other altcoins are packaged into ETFs, potentially accelerating similar filings across the sector.
The competition landscape is notable. Grayscale is not entering a vacuum; Bitwise currently seeks regulatory clearance for the Bitwise AAVE Strategy ETF, a plan that would allocate up to a majority of assets to AAVE tokens and place a substantial portion in securities linked to the token’s performance. The contrast between Grayscale’s direct-token approach and Bitwise’s mixed-asset strategy highlights a broader debate about how best to structure crypto exposure for institutional portfolios. As the two filings advance, regulators will weigh issues such as custody, liquidity, and investor protection in the context of a market where on-chain activity can diverge from traditional equity markets.
Beyond the United States, the appetite for regulated Aave exposure is evident. In Europe, 21Shares launched an Aave exchange-traded product on Nasdaq Stockholm in November, joining earlier European efforts by Global X in Germany. These products reflect a broader trend of creating accessible, regulated pathways for investors to participate in the DeFi economy without directly managing private keys or navigating on-chain custody. The cross-border momentum matters because it signals that crypto-native products can find distribution channels outside the U.S., even as policymakers refine the domestic framework for crypto-asset ETFs.
From a price perspective, the market has not fully priced in the regulatory drama and potential upside from a US-listed AAVE ETF. The AAVE token has hovered around the mid-$100s, with price swings often reflecting broader crypto market sentiment as well as protocol-specific developments, such as staking mechanics and governance changes. Market data show that the token’s trajectory remains sensitive to both macro risk appetite and the evolving regulatory landscape for crypto funds and custodians.
As this story unfolds, the sector’s growth narrative continues to hinge on clarity from regulators, custody capabilities, and the ability of managers to deliver transparent, liquid products that align with investor expectations. The Grayscale filing does not guarantee approval or listing, but it does reinforce that, even in a downturn, there is continued demand among asset managers to bridge the gap between DeFi innovation and traditional market access.
What to watch next
- Regulatory decision on Grayscale’s Form S-1 for the Grayscale Aave Trust ETF, including potential timing for a decision.
- NYSE Arca listing logistics and the official launch timeline for GAVE, if approved.
- Regulatory progress on Bitwise’s AAVE Strategy ETF and any subsequent outcomes for U.S.-listed altcoin ETFs.
- Developments in European AAVE-linked ETFs/ETPs, including any new products or regime changes that affect cross-border distribution.
- Market reaction in AAVE pricing and liquidity as ETF chatter intensifies and custody arrangements mature.
Sources & verification
- Grayscale’s Form S-1 registration for the Grayscale Aave Trust ETF filed with the SEC (aave-20260213.htm).
- Bitwise’s SEC filing for the Bitwise AAVE Strategy ETF.
- DefiLlama data confirming Aave’s market position as a leading DeFi protocol with significant TVL.
- 21Shares’ Aave ETP on Nasdaq Stockholm as an example of Europe’s regulated exposure to the token.
- CoinGecko price data for the AAVE token and on-chain activity references used to illustrate the current market context.
Grayscale targets Aave ETF, expanding US access to DeFi exposure
AAVE (CRYPTO: AAVE) has become a focal point in a growing wave of regulated products designed to mirror the performance of decentralized finance assets. Grayscale’s filing with the SEC outlines a structure in which the Grayscale Aave Trust ETF could hold the token directly on its balance sheet. The move—should it clear regulatory hurdles—would place a U.S.-listed, token-backed vehicle alongside existing crypto ETFs and ETPs, potentially broadening the investor base for Aave and the DeFi ecosystem more broadly.
In the current filing framework, the Grayscale vehicle would be listed on NYSE Arca under the symbol GAVE, with a management fee of 2.5% and a custody arrangement described as handled by Coinbase. The direct-token approach contrasts with other ETF strategies that blend token holdings with traditional securities or derivatives to achieve exposure. The difference may matter to fund sponsors and investors alike, particularly around liquidity profiles, redemption mechanics, and custody risk management in a landscape where on-chain activity can precede off-chain valuations.
The regulatory backdrop for a token-backed ETF remains nuanced. While the SEC has shown openness to crypto investment products, it has also emphasized investor protection, disclosure, and custody standards. Grayscale’s S-1 indicates a careful alignment with those expectations, aiming to provide transparent access while maintaining robust safeguards around token custody and exchange mechanisms. The broader market context—where Bitwise is pursuing a similar filing and European issuers have already brought Aave-linked products to market—suggests a multi-regional competition to offer the most liquid and compliant versions of DeFi exposure.
From a product design standpoint, the choice between direct token ownership and a blended allocation represents more than a stylistic preference. Direct token holdings could simplify the fund’s tracking error relative to the underlying asset but require sophisticated custody and liquidity planning. In contrast, a partially token-weighted ETF can diversify risk by incorporating securities linked to the token’s performance, potentially smoothing volatility but introducing tracking complexities. As both Grayscale and Bitwise move through the regulatory process, the evaluation of these trade-offs will inform not just AAVE ETFs, but the future shape of DeFi-focused investment products in the United States.
The evolving narrative around Aave ETFs also intersects with activity on other fronts. Europe’s active ETP pipelines and ongoing discussions about crypto product approvals in the U.S. highlight a broader market interest in regulated crypto access. The Aave ecosystem—where users lend, borrow, and earn yield across multiple blockchains—remains a compelling case study for what “regulated DeFi exposure” could look like in practice. Investors watching the Grayscale filing should consider how direct token exposure compares to more traditional ETF constructs, and what this implies for the future of institutional participation in the DeFi economy.
What to watch next
- The SEC’s decision timeline for Grayscale’s Aave Trust ETF filing and any subsequent amendments to the Form S-1.
- Timing and logistics for an NYSE Arca listing if the ETF receives regulatory approval.
- Regulatory and market updates on Bitwise’s AAVE Strategy ETF and any related product developments.
- Regulatory developments in Europe and other regions, where Aave-linked ETPs have already gained traction.
- Market reactions to the potential launch, including AAVE price dynamics and liquidity indicators on major exchanges.
Democratic senators are calling for a national security review of a major foreign investment in World Liberty Financial, the crypto firm tied to Donald Trump and his family.
Summary
- Democratic senators urged the Committee on Foreign Investment in the United States to review a reported $500 million UAE-linked stake in World Liberty Financial, citing national security concerns.
- Sens. Elizabeth Warren and Andy Kim questioned whether the deal was formally reviewed and whether foreign investors could gain board influence or access to sensitive financial data.
- The investment is reportedly tied to Sheikh Tahnoon bin Zayed Al Nahyan, with links to G42, intensifying political scrutiny as Donald Trump denies knowledge of the transaction.
In a Feb. 13 letter to Treasury Secretary Scott Bessent, Senators Elizabeth Warren and Andy Kim urged the Committee on Foreign Investment in the United States to examine a reported $500 million stake linked to the United Arab Emirates.
The lawmakers said the investment could pose national security risks. They questioned whether CFIUS was notified. They also asked whether the deal was formally reviewed.
According to the letter, a UAE-backed entity acquired a large stake in World Liberty shortly before Trump’s January inauguration. The senators said the timing raises concerns. They warned that foreign ownership of a U.S. financial technology firm tied to a sitting president is unprecedented.
The letter sets a March deadline for answers from the Treasury.
Background and political fallout
The controversy centers on reports that an investment vehicle linked to Sheikh Tahnoon bin Zayed Al Nahyan purchased nearly half of World Liberty. Tahnoon is the UAE’s national security adviser. He is also linked to tech conglomerate G42, which has previously drawn scrutiny in Washington.
Lawmakers said the structure of the deal could give foreign actors board influence and access to sensitive financial data.
Trump has denied knowledge of the specific transaction. He said his sons manage the business. The White House has rejected claims of improper influence.
World Liberty has already faced a congressional probe over its foreign fundraising. The new letter intensifies pressure. It frames the issue as a national security matter, not just an ethics debate.
Treasury officials have not yet publicly responded.
TLDR:
- Strategy can maintain full debt coverage even if Bitcoin price crashes 88% to $8,000 levels
- Michael Saylor plans to convert company’s convertible debt into equity over three to six years
- The announcement demonstrates Strategy’s confidence in its balance sheet and risk management approach
- Debt-to-equity conversion strategy aligns with Saylor’s long-term bullish outlook on Bitcoin
Strategy announced it can weather a Bitcoin price decline to $8,000 while maintaining sufficient assets to cover all outstanding debt obligations.
The bitcoin-focused company made the statement amid ongoing market volatility. Michael Saylor, the firm’s founder, simultaneously revealed plans to convert convertible debt into equity over a three to six-year period. The disclosure provides insight into the company’s risk management approach.
Financial Buffer Against Market Downturn
Strategy’s official statement indicates the company maintains substantial financial cushion despite aggressive bitcoin accumulation.
The company posted that it “can withstand a drawdown in BTC price to $8K and still have sufficient assets to fully cover our debt.” The $8,000 threshold represents an 88% decline from Bitcoin’s current trading levels.
Such a dramatic collapse would bring the cryptocurrency to prices last seen in early 2020. The company’s assertion demonstrates confidence in its balance sheet structure and asset management strategy. Strategy has positioned itself as a corporate bitcoin treasury company.
The firm holds one of the largest corporate bitcoin reserves globally. This financial resilience stems from the company’s debt-to-asset ratio and overall capital structure.
Strategy has raised billions through various financing mechanisms to fund bitcoin purchases. The company apparently structured these obligations with significant downside protection in mind.
Convertible Debt Transformation Timeline
Michael Saylor shared his vision for the company’s debt management through a post on X. Saylor stated: “Our plan is to equitize our convertible debt over the next 3–6 years.” This approach would transform debt obligations into equity stakes.
The conversion strategy aligns with Saylor’s long-term bullish outlook on bitcoin. Converting debt to equity reduces fixed obligations and interest expenses. It also provides flexibility as the company continues building its bitcoin position.
The timeline Saylor outlined suggests a gradual transition rather than immediate conversion. This measured approach allows the company to optimize conversion timing based on market conditions.
The strategy potentially reduces dilution risk for existing shareholders while maintaining operational flexibility. The combination of debt coverage capacity and conversion plans reflects Strategy’s evolving corporate structure.
Billionaire investor and Bridgewater Associates founder Ray Dalio says the global order established after World War II is breaking down. He argued that the world is entering what he calls “Stage 6” of the “Big Cycle.”
His warning has triggered renewed debate about geopolitical instability and its impact on cryptocurrency markets.
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Ray Dalio Says We’re in “Stage 6” as World Order Breaks Down
Dalio frames the current moment through what he calls the “Big Cycle.” This is a pattern in which dominant empires rise, peak, and eventually decline. According to this model, the world is now in “Stage 6.”
“In my parlance, we are in the Stage 6 part of the Big Cycle in which there is great disorder arising from being in a period in which there are no rules, might is right, and there is a clash of great powers,” the post read.
Unlike domestic political systems, Dalio argues, international relations lack effective enforcement mechanisms such as binding laws or neutral arbitration. As a result, global affairs are ultimately governed by power rather than rules. When a dominant country weakens and a rival gains strength, tensions typically increase.
He identifies five types of conflict that tend to escalate in such periods: trade and economic wars, technology wars, capital wars involving sanctions and financial restrictions, geopolitical struggles over alliances and territory, and finally, military wars.
Most major conflicts, he argues, begin with economic and financial pressure long before bullets are fired. Dalio draws comparisons to the 1930s, when a global debt crisis, protectionist policies, political extremism, and rising nationalism preceded World War II.
He notes that before large-scale military conflict erupted, countries engaged in tariff battles, asset freezes, embargoes, and financial restrictions, tactics that resemble measures used today.
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In his view, the most significant flashpoint in the current cycle is the strategic rivalry between the United States and China, particularly over Taiwan.
“The choice that opposing countries face—either fighting or backing down—is very hard to make. Both are costly—fighting in terms of lives and money, and backing down in terms of the loss of status, since it shows weakness, which leads to reduced support. When two competing entities each have the power to destroy the other, both must have extremely high trust that they won’t be unacceptably harmed or killed by the other. Managing the prisoner’s dilemma well, however, is extremely rare,” Dalio wrote.
However, warnings like this are not new. Dalio has issued similar cautions for years. This suggests his recent remarks are part of a consistent long-term thesis rather than a sudden shift.
Still, it’s worth noting that rather than making a direct prediction about military conflict, Dalio argues that the structural conditions historically associated with major power transitions are now in place.
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Broader Implications for the Crypto Market
Dalio’s warning raises questions about how digital assets might perform. In periods marked by sanctions, asset freezes, and restrictions on cross-border finance, cryptocurrencies can attract attention as alternative settlement rails that operate outside traditional banking infrastructure.
Bitcoin, in particular, is often viewed as resistant to censorship and capital controls. These characteristics could become more relevant if financial fragmentation accelerates. At the same time, cryptocurrencies remain sensitive to global liquidity conditions.
Historically, geopolitical stress and policy tightening have triggered broad risk-off reactions across markets. This, in turn, may weigh on equities and high-beta assets alike.
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If rising tensions lead to tighter financial conditions or reduced investor appetite for risk, crypto markets could experience heightened volatility in the short term.
“For stocks, this likely means higher volatility, lower valuations, and sharper swings as geopolitical risks rise. For crypto, weakening trust in traditional money could drive long-term interest, but short-term stress may still trigger severe price swings,” analyst Ted Pillows stated.
Another key factor is that heightened geopolitical tensions may push investors toward traditional safe-haven assets. Gold has historically benefited during periods of uncertainty, as capital seeks stability and long-standing stores of value.
In recent months, precious metals have surged to record highs, while cryptocurrencies struggled to recover following October’s tariff-driven market downturn. This divergence highlights that, despite Bitcoin’s “digital gold” narrative, many investors still treat gold as the primary hedge during acute geopolitical stress.
If tensions deepen, capital flows could continue favoring established defensive assets over more volatile alternatives. For crypto markets, that dynamic suggests a complex outlook: while long-term narratives around monetary debasement and financial fragmentation may strengthen, near-term price action could remain vulnerable to shifts in global risk sentiment.
Apollo Global Management is moving to deepen its involvement in decentralized finance through a long-term collaboration with the Morpho Association.
Summary
- Apollo Global Management will acquire up to 90 million MORPHO tokens over 48 months.
- The partnership follows institutional integrations with Bitwise, which launched a USDC yield vault, and Flare, which enabled XRP-linked lending.
- The deal strengthens Morpho’s on-chain lending infrastructure and gives Apollo long-term governance influence.
The partnership was announced on Feb. 13, with the Morpho Association confirming that it had signed an agreement with Apollo affiliates.
Over the next 48 months, Apollo and its related entities will have the option to acquire up to 90 million Morpho (MORPHO) tokens.
Agreement outlines token purchase plan
These tokens may be obtained through a mix of open-market purchases, over-the-counter transactions, and other negotiated arrangements. To promote market stability, the agreement includes ownership caps as well as specific transfer and trading restrictions.
These safeguards were built into the structure of the deal to limit sudden supply increases and reduce the likelihood of sharp price swings.
If the full allocation is purchased, Apollo’s holdings would represent about 9% of Morpho’s total governance token supply.. At recent prices ranging between $1.19 and $1.37 per token in mid-February, the full cap would be valued at approximately $107 million to $115 million.
Galaxy Digital UK Limited acted as the exclusive financial adviser to Morpho during the negotiations. Morpho said the cooperation will support the development of lending markets, credit infrastructure, and curator-managed vaults across its protocol.
Agreement outlines token purchase plan
The Apollo deal follows several high-profile institutional partnerships that have helped Morpho strengthen its position in decentralized lending.
In late January 2026, Bitwise Asset Management introduced its first on-chain vault on Morpho, offering USDC deposits with yields of up to 6%. The launch marked Bitwise’s first move into non-custodial DeFi yield strategies.
Shortly after, in early February 2026, Morpho expanded its platform by integrating with the Flare blockchain. This integration made it possible for users to lend and borrow XRP-linked assets, such as FXRP. The rollout included vaults backed by FXRP, FLR, and USDT0, all accessible through the Mystic app.
Coinbase made major strides in 2025 when it integrated Morpho’s infrastructure to support its crypto-backed lending services. The integration supported over $960 million in active loans, $1.7 billion in collateral, primarily backed by Ethereum and Bitcoin, and over $450 million in USDC earning yield.
Morpho has been also able to reach a wider audience by offering lending, borrowing, and yield products to both individual and institutional customers through other partnerships with Bitget, Société Générale Forge, Gemini, and Crypto.com.
Ongoing protocol improvements have enabled this expansion. Morpho Vaults 1.1, which was released in 2025, improved risk management. In the meantime, the development of Morpho V2 is one of the main objectives for 2026. Future iterations will include fixed-rate and fixed-term loans with decentralized risk controls.
Market observers see the Apollo deal as evidence of growing institutional confidence in on-chain credit markets. Partnerships such as these are becoming more common as traditional asset managers look for more direct access to blockchain-based financial infrastructure.
Stani Kulechov, the founder of decentralized lending platform Aave, said DeFi could benefit from $50 trillion worth of “abundance assets” such as solar through tokenization by 2050, opening a new class of onchain collateral.
Data from RWA.xyz shows that nearly $25 billion worth of real-world assets have been tokenized onchain, but they are mostly in the form of US Treasury bonds, stocks, commodities, private credit and real estate.
In a post to X on Sunday, Kulechov said he expects these scarce assets to continue growing but that the “biggest impact from tokenization can be achieved by tokenizing abundance assets.”
“Capital is hungry for new collateral, and the world is ready for a transformation that onchain lending can capture and accelerate,” the Aave Labs boss said, while adding that solar could account for $15-$30 trillion of the $50 trillion “abundance asset” market by 2050.
Kulechov said solar debt financiers could tokenize a $100 million solar project while borrowing $70 million to redeploy into new projects, while onchain depositors would have “access to enormously scalable, low-risk yield that is well diversified.”
“An investor might buy tokenized solar, hold for three years, sell at a profit, and immediately redeploy into new development,” Kulechov added, arguing that such a model could significantly increase capital efficiency.
“Traditional infrastructure capital locks up for decades. Tokenized assets allow continuous trading, meaning the same dollar can finance multiple projects over time.”
Kulechov said the same idea extends to batteries for energy storage, robotics for labor, vertical farming and lab-grown food for nutrition, semiconductors for computation and 3D printing for materials.
Abundance assets could offer better returns
Kulechov said these abundance assets could offer higher returns than scarce assets, which he said are heading down “a road toward low, thin margins and diminished profitability.”
“Abundance-backed products offer better returns, better risk characteristics, and better values alignment. They win in the market because they are superior products.”
Aave is the largest DeFi protocol by total value locked, at $27 billion for borrowing and lending, DeFiLlama data shows.
The Tether-issued USDt (USDT) stablecoin, Ether (ETH) and wrapped Ether (wETH) are the most lent and borrowed assets on the platform.
AAVE down 15.2% in 2026
Aave’s native token Aave (AAVE) has not managed to stave off the recent crypto market slump, falling another 1.6% over the last 24 hours, CoinGecko data shows.
Related: Aave winds down Avara, phases out Family wallet in DeFi refocus
AAVE has fallen 15.2% so far in 2026 to $125.98 and is now 81% off its $661.70 all-time high set in May 2021.
Magazine: A ‘tsunami’ of wealth is headed for crypto: Nansen’s Alex Svanevik
Crypto World
Coinbase Retail Users Increase BTC and ETH Holdings During Market Downturn, Armstrong Reports
TLDR:
- Coinbase retail users accumulated more Bitcoin and Ethereum in native units during recent market volatility
- Platform data shows vast majority of customers maintained or increased holdings between December and February
- CEO Brian Armstrong confirmed retail investors bought the dip rather than panic selling during downturns
- Native unit measurements reveal investor conviction independent of fiat currency price fluctuations
Coinbase retail users have maintained strong purchasing activity during recent market volatility, according to data shared by CEO Brian Armstrong.
The exchange platform recorded increases in native unit holdings for both Bitcoin and ETH among retail customers.
Armstrong’s analysis revealed that most customers demonstrated long-term holding patterns, with February balances matching or exceeding December levels across major digital assets.
Retail Investors Increase Native Unit Holdings
Armstrong disclosed the trading patterns through his official Twitter account on February 16, 2026. According to his statement, “Retail users on Coinbase have been very resilient during these market conditions, according to our data.” The CEO noted that customers actively purchased digital assets during price declines.
Armstrong specifically stated that “they’ve been buying the dip” in his public announcement. Platform data confirmed this behavior through measurable growth in cryptocurrency holdings.
The Coinbase executive further explained that “we’ve seen a native unit increase for retail users across BTC and ETH.”
This buying behavior contrasts with traditional market panic selling during downturns. Retail investors on Coinbase chose to accumulate more tokens as prices dropped.
The pattern suggests confidence in long-term value appreciation despite short-term market fluctuations. The data represents actual customer holdings tracked across the Coinbase platform.
Long-Term Holding Patterns Emerge
Armstrong described the customer base using a popular market term in his tweet. He stated that “they have diamond hands” when characterizing their holding behavior. The phrase refers to investors who maintain positions through market volatility without selling.
The data backed up this characterization with concrete numbers. Armstrong noted that the “vast majority of customers had native unit balances in Feb equal to or greater than their balances in December.” This two-month period captured behavior through significant market volatility and price fluctuations.
The holding pattern indicates retail investors are not engaging in panic selling during downturns. Instead, customers are either maintaining existing positions or adding to them strategically.
Platform data tracked individual account balances to measure this retention behavior across the entire user base.
Market observers often question retail investor resilience during extended price declines. However, Coinbase data suggests this demographic is exhibiting patience and long-term thinking.
Armstrong’s public disclosure of internal platform metrics offers transparency into retail trading patterns. The findings challenge common assumptions about retail capitulation during market stress periods and demonstrate sustained conviction among individual investors.
Binance is forcefully rejecting allegations that its internal investigators uncovered more than $1 billion in Iran-linked transactions and were subsequently dismissed.
The pushback escalates tensions between the world’s largest crypto exchange and sections of the financial press.
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Binance Rejects Allegations and Defends Compliance Record
The controversy stems from a February 13 investigative report by Fortune, which alleged that compliance investigators identified over $1 billion in transactions tied to Iranian entities between March 2024 and August 2025.
The transfers reportedly involved Tether (USDT) on the Tron blockchain, an ecosystem frequently scrutinized by regulators for sanctions-related activity.
According to the report, at least five members of Binance’s compliance investigations team were dismissed after raising concerns internally.
Several of the affected staff were described as senior investigators with law enforcement backgrounds. Additional compliance personnel were also said to have departed in recent months, though the precise reasons for their exits were not publicly confirmed.
Binance Says “The Record Must Be Clear”
In a public statement, Binance Co-CEO Richard Teng directly refuted the allegations.
“The record must be clear. No sanctions violations were found, no investigators were fired for raising concerns, and Binance continues to meet its regulatory commitments. We’ve asked for corrections to recent reporting,” Teng wrote.
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In a formal letter addressed to Fortune, Binance Communications stated that the article contained “gross material inaccuracies and misleading implications.” The company articulated that:
- No personnel were terminated for reporting sanctions concerns.
- No personnel decisions or terminations are related to the reporting of alleged sanctions violations.
Binance further asserted that a full internal review, conducted alongside external legal counsel, found no evidence of sanctions breaches related to the referenced activity.
The letter emphasized that the exchange operates under whistleblower protections and strict employment laws across multiple jurisdictions.
Binance also pushed back against suggestions it had reneged on regulatory commitments stemming from its 2023 settlement with US authorities.
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The exchange has committed to fully cooperate with monitorship requirements. Reportedly, they have also “significantly strengthened” their sanctions screening, monitoring, and compliance infrastructure since the resolution.
Heightened Sensitivity Post-Settlement
The allegations are particularly sensitive given Binance’s 2023 $4.3 billion settlement over anti-money laundering and sanctions violations. Since then, the exchange has operated under enhanced compliance obligations and increased regulatory scrutiny.
However,beyond the dispute itself, the incident highlights broader concerns about stablecoins and sanctions evasion.
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Blockchain analytics firms, including TRM Labs, Chainalysis, and Elliptic, have previously reported growing use of USDT by Iranian-linked actors to move funds outside traditional banking channels.
US authorities, including the Office of Foreign Assets Control (OFAC), have sanctioned other exchanges over similar Iran-linked activity involving USDT on Tron.
The standoff remains a battle of narratives, with anonymous-source allegations meeting categorical corporate denials.
With no new enforcement action announced, the question shifts from whether violations occurred to how transparency, compliance, and investigative reporting intersect in an industry still fighting to rebuild trust.
Strategy founder Michael Saylor unveiled a plan to convert roughly $6 billion of convertible debt into equity, a move designed to ease balance‑sheet pressure while preserving the firm’s Bitcoin holdings. The company maintains a Bitcoin treasury of about 714,644 BTC, valued at roughly $49 billion at current prices, a substantial cushion for its leverage profile. Equitizing the debt—converting bonds into equity rather than repaying cash—would turn bondholders into shareholders and reduce near‑term debt obligations. The announcement, prompted by a Sunday post on X, followed a public assertion that the plan could withstand a dramatic BTC price drop and still fully cover the debt, a claim the firm made in a message linked to a Saylor post. The news comes as the market contends with sharp volatility and a price environment that has kept BTC trading in a wide range around the high 60,000s.
Key takeaways
- Strategy plans to convert about $6 billion of convertible debt into equity, reducing debt exposure without a cash repayment.
- The firm’s Bitcoin treasury stands at approximately 714,644 BTC, underpinning the balance sheet with a sizeable asset base worth tens of billions of dollars at current prices.
- Bond-to-equity conversion hinges on BTC price sensitivity; the firm argues that BTC would need to fall about 88% for the debt and equity to be equivalent on a value basis.
- Equitization could dilute existing shareholders by issuing new stock, though it also eases pressure on cash flow and debt servicing.
- The company has continued accumulating BTC, signaling a persistent long‑term thesis even as market prices dip.
- Strategy’s stock has fallen roughly 70% from its all‑time high, reflecting broader declines in crypto markets and investor sentiment as BTC fluctuates near $68,000–$70,000.
Tickers mentioned: $BTC, $MSTR
Sentiment: Neutral
Price impact: Neutral. The described debt conversion is a balance‑sheet adjustment rather than a direct price move.
Trading idea (Not Financial Advice): Hold. The company is pursuing structural relief through equity issuance while continuing to accumulate BTC, which could support downside protection if BTC stabilizes or recovers.
Market context: The strategy reflects a broader approach among BTC‑heavy firms to balance debt with control over equity issuance, as crypto markets experience episodic volatility and shifting investor risk appetite.
Why it matters
The move to convert debt into equity spotlights a pragmatic path for crypto‑native companies seeking to de‑risk their balance sheets without selling large BTC holdings into a volatile market. If successful, the conversion could limit cash obligations and preserve a strategic BTC reserve that could support future liquidity needs. For investors, the key question is how the equity dilution will affect existing shareholders and whether the new capital structure will provide a clearer path to profitability as BTC remains a cornerstone of Strategy’s balance sheet.
From a market perspective, Strategy’s strategy tests how far a BTC‑backed business can lean on its crypto reserves while weathering price swings and volatility in both digital assets and traditional equity markets. The company contends its BTC hoard provides a robust cushion, even if the price of BTC experiences extended drawdowns. The dynamic between debt relief and equity dilution will be watched closely by investors and analysts, particularly as BTC prices hover in a historically elevated but highly cyclical band and as the broader market evaluates the durability of corporate treasury strategies tied to crypto assets.
What to watch next
- Details on the final terms of the debt‑to‑equity conversion, including any changes to voting rights, dilution thresholds, and timing of the issuance.
- Any updates to the BTC accumulation program, including changes to the size of the reserve and the cadence of purchases.
- Regulatory developments around convertible notes and crypto treasuries that could influence balance‑sheet choices for BTC‑heavy companies.
- Further commentary from Michael Saylor or Strategy on future buy signals or treasury strategy, including additional posts on X.
Sources & verification
- Strategy’s official posts and remarks on X detailing the debt conversion and BTC holdings.
- Historical data on Strategy’s stock price (MSTR) and Bitcoin price data from referenced sources (Google Finance, CoinGecko).
- Previously published articles referenced in the original piece about Saylor’s buy signals and prior accumulation episodes.
Strategy’s balance sheet reshaped by a debt-to-equity plan
Strategy’s planned move to convert about $6 billion of convertible debt into equity reflects a deliberate effort to pare back leverage while preserving governance and the strategic advantage of its bitcoin reserves. Bitcoin (CRYPTO: BTC) is central to this approach, and the company publicly states that its 714,644 BTC stack creates a substantial cushion that could sustain debt obligations even as market prices swing. The conversion turns creditors into shareholders, realigning incentives with long‑horizon investors who expect the BTC treasury to underpin future growth and liquidity.
From a structural standpoint, the strategy has a double effect. On the one hand, it reduces the near‑term debt load on the balance sheet and eliminates cash interest obligations tied to the convertible notes. On the other hand, it introduces equity dilution, which can dilute existing owners’ ownership and shareholder earnings per share if the new stock issuance expands the float. The firm emphasizes that the conversion would be fully backed by BTC reserves; in other words, the risk on debt coverage remains anchored by the crypto asset base, even if BTC experiences a meaningful price correction.
The financial calculus is anchored to a striking data point: the conversion would effectively require an 88% drop in BTC price for the debt and the resulting equity to be value‑balanced. The math underscores how much the reserve acts as a backstop and also highlights the sensitivity of the plan to BTC’s price trajectory. The firm’s public statements to date suggest that even under severe stress scenarios, the strategy could sustain debt coverage while giving bondholders an ownership stake rather than a cash repayment at maturity, thereby avoiding forced sales in a downturn.
Meanwhile, Strategy has continued to accumulate BTC, a pattern that has persisted through recent market turbulence. The company’s average entry price for Bitcoin sits around $76,000, implying that even with current prices near $68,400, the overall position remains underwater on a cost basis. The ongoing accumulation is part of a broader narrative wherein the company uses its treasury not simply as a reserve but as a cornerstone of its equity‑backed financial stance. The public posts and related coverage indicate a steady cadence of purchases, including mentions of multiple weeks of continued accumulation as BTC price action fluctuates.
Beyond the internal balance‑sheet mechanics, the market response to Strategy’s leadership has been a mix of caution and curiosity. Strategy’s stock (MSTR) has endured a significant drawdown from its all‑time high, illustrating how crypto equities can decouple from the performance of BTC during periods of broad risk aversion. The latest trading, with shares near a fraction of the peak, showcases the tension between a potentially stabilizing balance‑sheet strategy and the market’s perception of dilution risk and growth prospects. As BTC attempted to reattain key levels in late trading and again faced pressure, investors weighed whether the new equity issuance would unlock a clearer path to profitability or simply reset the capital structure without delivering immediate earnings momentum.
The ongoing narrative also intersects with broader market sentiment about crypto treasuries and convertible debt, a topic covered in prior industry discussions. The company’s approach, while tailored to its own assets and obligations, mirrors a broader trend in which BTC‑centric businesses seek structural options to weather cycles of drawdown without sacrificing long‑term exposure to the asset that forms the core of their strategic thesis.
Crypto World
USD1 Stablecoin Surges to $5 Billion Market Cap as Wall Street CEOs Schedule Florida Summit
TLDR:
- USD1 achieved over $5 billion market capitalization within initial phase, ranking among top stablecoins globally.
- Platform recorded $300 million total value locked with yields reaching 13% on USDC and 7% on USD1 holdings.
- Major financial CEOs from Goldman Sachs, Coinbase, Franklin Templeton attend February 18 Mar-a-Lago meeting.
- Developer plans target $9 trillion daily FX market, positioning USD1 as potential settlement infrastructure.
USD1 has reached a market capitalization exceeding $5 billion within its initial phase, positioning itself among the largest stablecoins in the global market.
The token, associated with World Liberty Financial, has attracted attention from traditional finance leaders ahead of a scheduled February 18 gathering at Mar-a-Lago.
Capital flows into the platform have accelerated despite broader market volatility, with early metrics showing substantial total value locked and competitive yield rates.
Platform Metrics Show Early Traction
The stablecoin recorded approximately $300 million in total value locked during its first month of operation. Users can access yield rates reaching around 13 percent on USDC deposits through the platform.
USD1 itself offers roughly 7 percent returns to holders, creating multiple entry points for yield-seeking investors.
A crypto analyst posting under the handle @Eljaboom noted the scale of the project on social media. “Everyone is watching BTC · $68,174.43. Meanwhile, a new dollar rail is quietly forming in Florida,” the analyst wrote. The commentary emphasized that USD1 had moved beyond early-stage development into operational scale.
The platform’s rapid accumulation of locked value demonstrates market appetite for alternative stablecoin infrastructure. Traditional stablecoin markets have been dominated by established players for years.
However, new entrants with institutional backing are now challenging existing market structures through competitive yield offerings and expanded functionality.
World Liberty Financial architect Zak Folkman has discussed plans extending into foreign exchange markets. The global FX market processes approximately $9 trillion in daily transactions, representing a substantial opportunity for blockchain-based settlement infrastructure. If USD1 transitions from a yield-generating token to a settlement layer, its utility could expand considerably.
Institutional Participation and Infrastructure Development
The February 18 event at Mar-a-Lago includes participation from several prominent financial executives. Coinbase CEO Brian Armstrong, Goldman Sachs CEO David Solomon, Franklin Templeton CEO Jenny Johnson, and Cantor Fitzgerald CEO Michael Selig are confirmed attendees.
This lineup reflects institutional curiosity about digital asset infrastructure rather than typical cryptocurrency community engagement.
The platform has outlined several development priorities on its public roadmap. A debit card product aims to bridge digital and traditional payment systems.
Mobile onboarding tools will expand accessibility beyond desktop users. Real-world asset integration could connect traditional financial instruments with blockchain rails.
The analyst’s post emphasized infrastructure over short-term price movements. “The token price is noise. The infrastructure is the story,” according to the social media commentary.
This perspective suggests that platform utility and adoption metrics matter more than speculative trading activity.
Capital allocation patterns indicate growing confidence in alternative stablecoin systems. Whether driven by yield opportunities or institutional partnerships, the flow of funds into newer platforms challenges the assumption that established stablecoins maintain permanent market dominance.
The development of payment rails and settlement infrastructure continues regardless of broader cryptocurrency market conditions.
Strategy founder Michael Saylor has revealed the firm plans to convert its $6 billion in bond debt into equity — a move that reduces debt on the balance sheet.
“Strategy can withstand a drawdown in BTC price to $8,000 and still have sufficient assets to fully cover our debt,” stated the firm on X on Sunday, prompting Saylor’s response.
The Bitcoin (BTC) treasury company currently holds $49 billion in Bitcoin reserves with a stash of 714,644 BTC.
Its convertible debt is around $6 billion, so BTC would need to fall around 88% for the two to be equal, and it still has enough to cover the debt, the firm explained.
Equitizing convertible debt means converting the bond debt into equity as stock shares rather than repaying it in cash, essentially turning bondholders into shareholders.
The move would reduce debt pressure on the company, but it can also dilute existing shareholders because new stock is issued.
Strategy down 10% on average BTC purchase price
The average Bitcoin purchase price for Strategy is around $76,000, which means the firm is currently down around 10% on its investment with the asset trading at $68,400.
Related: Michael Saylor signals another Bitcoin buy amid market rout
Meanwhile, Saylor signaled another Bitcoin buy as he posted the Strategy accumulation chart on X on Sunday, a typical sign of a purchase.
The purchase would mark 12 consecutive weeks of buying as the company continues to accumulate despite a sharp decline in the underlying asset and its stock price.
Strategy stock down 70% from ATH
Strategy stock (MSTR) climbed 8.8% on Friday to end the week trading at $133.88, according to Google Finance.
The move came as Bitcoin recovered the $70,000 level again in late trading on Friday, but that recovery was short-lived as it lost some of those gains in early trading on Monday morning, falling to $68,400, according to CoinGecko.
Meanwhile, shares in the company are down 70% from their mid-July all-time high of $456, as BTC prices have fallen 50% from their peak in early October.
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