The First Signs of Regulations in Progress
White Star Capital Digital Asset Fund - Newsletter #179
By Arjun Mehra and Alexandre Chartois
U.S. Edges Closer to Crypto-Friendly Banking Regulations
Regulatory Shifts Pave the Way for Institutional Crypto Adoption
The tides are turning in Washington. In a series of landmark moves, U.S. regulators are signaling a shift toward a more constructive stance on digital assets—potentially unlocking mainstream institutional adoption.
White House Issues Executive Order on Digital Assets (White House)
A new executive order directs federal agencies to craft a unified digital asset strategy, prioritizing financial inclusion, cross-border payments, and economic competitiveness. This marks a departure from past regulatory fragmentation.
SEC Reverses Stance on Crypto Custody (U.S. Securities and Exchange Commission (SEC))
In a major reversal, the SEC has rescinded prior guidance that restricted banks from holding digital assets on behalf of clients. The rollback eliminates a critical barrier for financial institutions, clearing the way for Wall Street to deepen its involvement in crypto markets.
Congress Establishes Bipartisan Crypto Committee (USA Banking Committee)
For the first time, a bipartisan, bicameral committee has been formed to draft comprehensive crypto legislation.
WSC Perspective
Regulatory clarity is the missing link for institutional capital to fully enter the crypto space. These developments suggest the U.S. is moving toward a more predictable regulatory environment—one that could drive significant capital inflows into digital asset infrastructure, particularly within the banking sector.
Capital Markets: Crypto Firms Prepare for Public Debut
IPO Momentum Builds as Markets Stabilize
A fresh wave of crypto firms, including Kraken, BitGo, Bullish, Gemini, Circle, and eToro, are reportedly either preparing for an IPO or have already filed for one. If successful, this would be a major milestone—not just for these companies, but for the entire crypto ecosystem.
A strong IPO pipeline signals market maturity, providing liquidity for venture investors and proving that crypto startups can scale beyond private markets. It also validates the sector for institutions, reinforcing that crypto-native firms can reach the same public market milestones as traditional fintech companies.
WSC Perspective
Public listings will accelerate capital flows into crypto, providing early investors with exits and attracting fresh funding for startups. As more companies go public, it also increases the pool of potential acquirers, fostering a dynamic market for mergers and acquisitions. If this momentum continues, we could see a flywheel effect—more capital, more innovation, and a stronger bridge between crypto and traditional finance.
Trends & Market Disruptions
AI + Crypto: The Next Evolution of Blockchain
In recent months, the integration of AI into blockchain has surged across various industries, driven by AI agents that unlock innovative functionalities. This sector is currently marked by heightened volatility in token prices, presenting both risks and significant growth potential.
Memecoin Mania: The Rise of TRUMP/MELANIA Token
Last January, the presidential couple Trump each launched their own memecoin a few days before the official inauguration of the new president in the White House. Trump became the fastest memecoin of all time to enter the top 20 coins by market capitalisation with a launch reaching more than $14.7b through an FDV of more than $72b, while the Melania made less noise and did not attract the same level of engagement from the crypto community with a market capitalisation of barely $2.2b and $13b in FDV.
Argentina’s Pro-Crypto President Faces Legal Challenges
Recently, the cryptocurrency community has been rocked by accusations of fraud and embezzlement against the president of Argentina, Javier Milei. Last Friday, he promoted the memecoin LIBRA on his X account, triggering a wave of investors and pushing its market capitalization above $5B. A few hours later, the token collapsed by more than 95% due to what is considered a coordinated rug pull (insider manipulation).
WSC Perspective
The intersection of AI and blockchain presents long-term opportunities, while memecoin speculation underscores crypto’s cultural and market-driven volatility. Meanwhile, political uncertainty in Argentina could ripple across Latin America’s evolving crypto landscape.
Portfolio Spotlight
Ledn Achieves $100 Million in Loans Originated in January
Ledn has reached a significant milestone by originating $100m in loans this January. This accomplishment reflects the growing demand for Ledn's crypto-backed lending services and underscores its commitment to providing accessible financial solutions within the digital asset space.
Space and Time's Ecosystem Surpasses 100+ Projects
The Space and Time ecosystem has expanded by over 100 projects this year, partnering with top innovators across multiple sectors. By empowering businesses, developers, and creators, Space and Time is driving the next generation of blockchain-powered applications.
Safello Reaches 400,000 Customers and Launches Six New Tokens
Safello has surpassed 400,000 customers and expanded its offerings by introducing six new tokens.This growth reflects the increasing adoption of digital assets and Safello's commitment to providing diverse investment options.
DFNS Partners with Agant & Figment for Security and Staking Solutions
DFNS collaborates with Agant to enhance security infrastructure, ensuring a safer user experience. At the same time, its integration with Figment improves staking capabilities, enabling users to securely manage and stake their digital assets more efficiently.
Etherfuse Launches Stablebonds for Secure Global Investments
Etherfuse has introduced Stablebonds, a new financial instrument designed to provide stable returns for investors. This initiative aims to bridge the gap between global bonds and local impact, offering a secure investment option within the blockchain ecosystem.
Final Thoughts
With regulatory barriers crumbling and capital markets reopening, 2025 is shaping up to be a defining year for institutional crypto adoption. As always, WSC will be monitoring these trends closely, ensuring our investors stay ahead of the curve.