From Rules to Throughput: Crypto’s High-Stakes Week

Welcome to our Crypto news in 10, a daily podcast bringing you the latest news about crypto in under 10 minutes.

It’s Tuesday, January 20, 2026, and here’s what’s moving crypto today.

In Washington, the new chair of the Commodity Futures Trading Commission—the CFTC—lays out a roadmap meant to end regulation by enforcement and prepare markets for a wave of tokenized finance.

In Hong Kong, the securities industry is pushing back hard on proposed rules that would force even tiny crypto allocations into a full licensing regime.

On the tech side, Ethereum Layer 2 project MegaETH is opening its mainnet to the public for a seven-day, 11 billion transaction stress test... an audacious bid to prove real-time throughput.

We’ve also got a fresh DeFi exploit at Makina Finance—about $5 million drained, with a surprise twist where an MEV builder captured most of the loot—and a messy token launch for Trove that plunged about 95 percent within minutes, with investors demanding answers.

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Let’s start in D.C. The Commodity Futures Trading Commission chairman, Michael S. Selig—sworn in late December—published an op-ed this morning saying the U.S. is on the cusp of a golden age for financial innovation if Congress passes the Digital Asset Market Clarity Act. He says the CFTC will deliver a minimum effective dose of rules, move away from policymaking by enforcement, and modernize oversight under a new Future-Proof initiative. The big idea is clear, fit-for-purpose regulation that lets tokenized markets and digital asset platforms operate domestically with strong investor protections.

If you’re wondering how real this is, Selig’s appointment is official, and the agency has already moved to retool its tech engagement. Earlier this month, the CFTC launched an Innovation Advisory Committee to replace the old tech panel—signaling a broader embrace of blockchain and AI topics that intersect with derivatives and market infrastructure. On Capitol Hill, the House report on the Clarity Act outlines split jurisdiction—the CFTC for digital commodities, the SEC for investment contract tokens—with customer-protection requirements for both. Bottom line... expect the CFTC to get more explicit authority if the bill clears the Senate.

Across the Pacific, Hong Kong’s professional securities association is pushing back against a proposal that would eliminate the current 10 percent de minimis option for traditional asset managers. The filing argues the change would force a firm to secure a full virtual asset management license even for a 1 percent Bitcoin sleeve—an all-or-nothing burden that could deter mainstream managers. The group also objects to custody language that would limit managers to SFC-licensed providers—impractical, they say, for early-stage token investments—though they support allowing self-custody and qualified offshore custodians for professional clients. The consultation window closes this week, so watch for next steps from the SFC.

Now, a big technical swing. MegaETH—an Ethereum Layer 2 focused on ultra-low latency—is opening its mainnet for a public, global stress test starting Thursday, aiming for 11 billion transactions in seven days. The team says it’s targeting sustained throughput of 15,000 to 35,000 transactions per second during the test; in recent internal runs, they peaked near 47,000. What’s unusual here is they’ll let users interact with live, latency-sensitive apps—on-chain games like Stomp GG, Smasher, and Crossy Fluffle—while the backend hammers the network with transfers and AMM swaps. A public mainnet launch is slated to follow right after, assuming it holds under pressure. If successful, this could reset expectations for real-time Ethereum execution in consumer apps and market microstructure.

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On to security—and a reminder that throughput isn’t the only challenge. DeFi protocol Makina Finance was exploited overnight for roughly $5 million from a DUSD and USDC Curve pool. According to blockchain security firms, the attacker used a $280 million USDC flash loan to push the protocol’s Machine Share Oracle mid-transaction, letting the pool pay out at an inflated rate. Then, in a dramatic twist, an MEV builder front-ran the exploiter and intercepted about $4.14 million of the would-be haul. Makina says the incident appears isolated to the DUSD liquidity pool on Curve, has put systems into safe mode, and is urging LPs to withdraw as they assess. It’s another case study in how oracle updates, permissions, and transaction ordering can interact in unexpected—and costly—ways.

And finally, a messy token launch. Trove’s token crashed by about 95 percent within minutes of listing after the project pivoted from a Hyperliquid-based build to Solana right before TGE. The team had previously raised around $11.5 million and said it would retain roughly $9.4 million to keep building on Solana—fueling investor backlash and accusations of a rug pull from some community members and on-chain sleuths. Liquidity was thin at launch, fully diluted value plunged from about $20 million to under $2 million—somewhere in the $1 to $2 million range—within minutes, and legal threats started flying on social media. The team denies exit-scam claims and cites a late withdrawal by a key liquidity partner as the reason for the pivot. However this shakes out, it’s a cautionary tale—late-stage changes to chain choice, use-of-proceeds transparency, and launch mechanics can reverberate violently in the first minutes of trading.

Quick recap to close. In the U.S., the CFTC chair set the tone for a rules-not-enforcement era as Congress weighs the Clarity Act. In Hong Kong, industry is warning that tighter licensing could push crypto allocations out of mainstream funds. MegaETH is about to put real-time Ethereum to the test with an 11 billion transaction stress run. Makina’s exploit shows how flash loans, oracles, and MEV collide. And Trove’s launch implosion underscores how fragile trust is at the token-generation finish line. We’ll keep watching the policy clocks and the throughput counters—because both are setting crypto’s pace right now...

Thanks for listening and see you tommorow!