WuBlockchain

Chainalysis estimates that global on-chain potentially taxable crypto activity reached at least $457 billion in 2025, led by the United States at $112.6 billion. The total includes realized gains on CEXs and DEXs, income from mining, staking and lending, and crypto payments. Chainalysis said the figure is a conservative lower bound because off-chain activity within centralized exchanges is not visible on-chain. It also estimates that only about 14% of global on-chain taxable activity falls within the practical scope of the OECD’s Crypto-Asset Reporting Framework, leaving most DEX, P2P, self-custody, on-chain income and payment activity outside its coverage.

Sui co-founder Kostas Kryptos said Havenex is currently raising a Series A round that is close to completion and has already applied for the licenses required for its planned operations. The platform is being built as regulated infrastructure for financial institutions to offer both digital and traditional financial assets, with a focus on verifiable custody, continuous proof of solvency, multisig security, quantum-resistant keys, hardware-based two-factor authentication, and self-custody and key-loss protection mechanisms. Havenex plans to use Sui technology where appropriate while also integrating assets, infrastructure and bridges from other ecosystems. Kostas said he will advise Havenex but will remain focused on Mysten Labs and Sui.

A former employee of WebSea, JuCoin and CoinUP told WuBlockchain that some small and mid-sized exchanges rely on rising platform-token prices, discounted token purchases, high-yield products, copy trading and agent networks to attract user funds and keep them within the platform. He said WebSea allowed employees to withdraw while ordinary users were unable to do so during a 2024 crisis; JuCoin targeted users in lower-tier markets through mining products and a complex multi-level agent system; and some CoinUP team leaders or agents were required to purchase its CPX platform token, which later suffered a severe price collapse.
He said ordinary users could face withdrawal restrictions while employees, agents and other insiders could sometimes withdraw more easily. At JuCoin, withdrawals exceeding deposits were less likely to be approved and profits could be deducted. Dougao argued that in a bear market, some smaller exchanges may increasingly turn to platform tokens, high-yield products and lower-tier user acquisition, highlighting the risks behind “principal protection,” high returns and discounted token purchases.

According to 21Shares, Solana is advancing two governance proposals, SIMD-550 and SIMD-553. SIMD-550 would double the annual disinflation rate from -15% to -30%, moving Solana’s path to its 1.5% terminal inflation rate from around 2032 to H1 2029, while nominal staking yield is projected to fall to about 2.25% by year three.
SIMD-553, approved and merged on July 20, introduces a burn fee on requested compute units from financial activity. Based on current network activity, daily SOL burns could rise from about 600-800 SOL to roughly 7,500-9,000 SOL. Together, the two proposals are projected to reduce issuance by about $1.4B-$1.5B over six years. The final impact still depends on the SIMD-550 vote and SIMD-553 validator fee design.

According to Bloomberg, the SEC sent a new proposal to the White House Office of Management and Budget on Aug. 25 to clarify the custody framework for crypto assets held by investment advisers and investment companies.
The proposal also seeks to remove certain existing custody requirements that the SEC says have become “outdated” due to market evolution and current trading and holding practices. Full details will be released after OMB review, followed by an SEC vote and a public comment period, typically lasting at least 60 days.

US Core PCE Price Index YoY for July came in at 3.3%, matching expectations of 3.30% and unchanged from the previous reading of 3.30%. US Q2 Real GDP Annualized QoQ (Second Estimate) stood at 1.5%, in line with forecasts of 1.50% and the prior reading of 1.50%. US Personal Spending MoM for July rose 0.2%, beating expectations of 0.1% against the previous reading of 0.30%.

The Hyperliquid Policy Center (HPC) and trade[XYZ], a third-party market deployer on Hyperliquid, have submitted a comment letter to the U.S. Commodity Futures Trading Commission (CFTC). They recommend establishing a regulated U.S. market access pathway for crude oil and natural gas perpetual contracts, and support 24/7 trading. The two parties also recommend allowing stablecoins and tokenized traditional assets to be used as margin, and recognizing on-chain infrastructure for trading, clearing, and settlement.

Complied by | WuBlockchain
Original Link：
https://www.wublock123.com/articles/three-exchange-collapse-survivor-i-stayed-at-all-59185
The guest on this episode, Dougao, previously worked at WebSea, JuCoin, and CoinUP. Drawing on his experience at the three companies, the conversation examines the internal operating models of these highly controversial exchanges. Based on his account and publicly available information, the episode presents three distinct risk profiles: WebSea was previously reported to have frozen withdrawals and announced in May 2026 that it would gradually resume withdrawals in batches based on account snapshots; JuCoin became embroiled in controversy over withdrawal delays and reserve transparency in June 2026; and CoinUP drew public scrutiny following extreme volatility in its platform token, CPX, although the exchange maintained that deposits, withdrawals, and trading remained operational.
In Dougao’s view, these small and mid-sized platforms ostensibly attract users through rising platform-token prices, discounted token purchases, principal-protected copy trading, mining returns, and agent commissions. In practice, however, their greater priority is to keep user funds within the platform. This is often accompanied by opaque withdrawal reviews, disorderly access controls, complex agent hierarchies, and unequal treatment of ordinary users and insiders.
The podcast further notes that as market conditions deteriorate, some small and mid-sized exchanges are shifting away from conventional order-matching businesses toward models that rely more heavily on platform-token narratives, high-yield packaging, and user acquisition in lower-tier markets. Ordinary users should exercise heightened caution whenever they encounter claims involving “principal protection,” “high returns,” “discounted token purchases,” or “locked-token mining.”
Inside the WebSea Crisis: Frozen Withdrawals, Preferential Releases for Insiders, and Broken Access Controls at a Small Exchange
Host: You joined WebSea in the first half of 2024. What were your main responsibilities at the time? What happened when WebSea encountered problems for the first time?
Dougao: I mainly worked in operations, including user operations and community management, while also handling some customer service work. Because it was a small exchange, responsibilities were not divided very clearly. I was involved in almost everything, including risk control, deposits and withdrawals, KYC, customer service, community management, and user operations.
In the second half of 2024, WebSea experienced its first wave of users being unable to withdraw funds. The company suddenly informed us that withdrawals were unavailable. It later said that the company might be dissolved and was even close to being unable to pay salaries. Management did not explain the specific reason. They simply told employees to withdraw their own funds as quickly as possible. Employees could still withdraw their money, but ordinary users could no longer do so.
The company’s internal Lark and Telegram groups were then gradually disbanded. This was WebSea’s first major crisis, and it sparked some public controversy. However, the impact was relatively limited because WebSea had not yet conducted large-scale marketing, so few people knew about or discussed the exchange. I was surprised when WebSea later became active again through renewed promotion and marketing.
It was difficult to determine the size of WebSea’s team. Unlike many exchanges that primarily use Lark for internal communication, WebSea conducted most of its collaboration through Telegram. I was in contact with dozens of people, and the entire team may have consisted of anywhere from several dozen to more than 100 employees. Most were Chinese, although there may also have been some ethnic Chinese employees based in Southeast Asia.
WebSea had some overseas users in 2024, but the majority were Chinese. At the time, it was promoting GameFi, which still attracted some market interest, and WebSea had also experimented in that area. Both its promotional activities and its eventual user base were concentrated primarily in mainland China.
I first learned about the exchange through a mainland Chinese recruitment website. In their early stages, small exchanges like this often post vacancies on recruitment websites and Telegram job channels. They also hire through employee referrals and recruitment agencies. I had worked in the industry for three or four years, so I encountered opportunities through all kinds of channels.
WebSea probably had a physical office at the time, possibly in Malaysia, but I do not know how many people actually worked there. Based on the part of the team I knew, most employees worked remotely online.
Host: You just mentioned that WebSea suddenly stopped processing withdrawals toward the end of 2024. Were there any warning signs beforehand? Did you only realize that something was wrong after management told you to withdraw your funds as quickly as possible?
Dougao: It happened very suddenly, although there were some warning signs. Bitcoin had fallen sharply around that time, possibly by more than 10% or even 20% in a single day, although I cannot remember the exact figure. After that steep decline, the company suddenly told us to withdraw our funds as quickly as possible and finish whatever work remained. It then began disbanding its internal groups one after another.
There was some discussion in both Telegram communities and on X. Telegram communities were relatively easy to control because administrators could suppress those discussions. There was little the platform could do about X, however. Many news accounts reposted the story, and the exchange essentially had no choice but to let the controversy continue spreading.
Some users who could not withdraw their funds later attempted to defend their rights and reported the matter to the police. From an employee’s perspective, however, we were already effectively on the verge of leaving the company. The company might not have been able to pay salaries, and management seemed to be telling everyone to cut their losses while they still could. Even if we continued working, there was no guarantee that we would be paid. At best, the company might have settled the previous month’s salary. Management itself was unsure whether the work already completed during the current month would be paid.
Later, I tried to complete the formal resignation process and obtain proof of employment, but neither was possible. In practical terms, the company had almost ceased to exist.
Employees were still able to withdraw their funds because user funds could be manually blocked during the deposit, withdrawal, and risk-control processes. A separate list of employees was created, and withdrawals involving employee funds were approved. By the time employees had withdrawn as much as possible, the amount of money left in the platform’s accounts had continued to decline, while the remaining users’ funds were still frozen. Even if user withdrawals were approved later, the hot wallets might already have been empty.
Some outstanding salaries were eventually paid through internal transfers on exchanges such as Binance and OKX rather than through WebSea itself.
From the outside, on-chain records may sometimes show that an exchange continued processing withdrawals for an extended period. In my view, however, if large numbers of users were already unable to withdraw while transfers were still leaving the hot wallets, particularly transfers exceeding 1,000 USDT, those final transactions were likely conducted mainly by insiders moving funds belonging to management or employees back into their own accounts, rather than ordinary user withdrawals.
Access controls at small exchanges are often poorly managed. At a major exchange, a withdrawal may require several layers of approval. At a small exchange, funds may be transferred immediately once a withdrawal is approved. The same person may even manage the wallet and approve withdrawals. When an exchange reaches this stage, the final transfers are therefore often initiated by insiders for their own benefit.
Host: If a small exchange suddenly runs into trouble, could the people responsible for its wallets or risk controls transfer funds that do not belong to them? When a platform claims that it is “gradually resuming withdrawals,” how should we interpret the occasional withdrawals that still appear on-chain?
Dougao: I think that is possible. Small exchanges already tend to have disorderly access controls. Even under normal operating conditions, their management of wallets, risk controls, and withdrawal approvals is often insufficiently rigorous. Once the platform runs into trouble, the team has even less capacity to manage these details.
Some people offer to buy USDT at a steep discount from accounts whose owners cannot withdraw. For example, if the market exchange rate is RMB 6.8 per USDT, someone might offer only RMB 3. Many users feel that if they cannot withdraw their funds anyway, their account balances are no more useful than virtual game tokens, so they are willing to sell at a deep discount. But if the buyer is an insider with the necessary access, or someone connected to the exchange, they may be able to approve the withdrawal and transfer the funds out. In effect, they acquire users’ assets at a fraction of their value.
When people offer to buy trapped USDT at a steep discount, exchange personnel may therefore be involved, or at least individuals with the relevant access privileges. They can use those privileges to move the funds out and profit from the difference.
After running into trouble, many small exchanges issue statements claiming that withdrawals remain available or will be “gradually resumed.” But if large numbers of ordinary users remain unable to withdraw for an extended period while occasional withdrawals continue to appear on-chain, those transactions should not automatically be interpreted as evidence that the platform has returned to normal.
In my view, these withdrawals most likely belong to agents, market makers, employees, or senior managers with connections to the exchange. Ordinary users’ funds remain frozen, while the on-chain transfers that can still be observed often represent funds belonging to well-connected insiders being moved out.
JuCoin’s Model for Targeting Lower-Tier Users: Ponzi-Like Products and Withdrawal Restrictions
Host: Your second experience began when you joined JuCoin in 2025. How long did you stay there, and what were your main responsibilities?
Dougao: I joined JuCoin around the middle of 2025. I would rather not disclose exactly how long I stayed, mainly to avoid revealing too much personal information. Overall, I did not remain at any of these exchanges for particularly long, but I did experience quite a few things.
When I left JuCoin, the explanation I was given was that my position had been eliminated. The company was scaling back, and the role was no longer being retained, so I stopped working there.
My responsibilities at JuCoin were similar to those at WebSea, primarily involving operations and customer service.
JuCoin’s team was much larger than WebSea’s. As I recall, there may have been around 300 group employees on Lark, with the entire team numbering approximately 300 to 500 people. Including external agents and offline promoters, the total would have been even higher.
JuCoin’s user base was also unusual compared with that of many other crypto exchanges. Its users were mainly middle-aged people between approximately 35 and 55 years old from mainland China. Overseas users accounted for a very small proportion, and I rarely encountered foreign users in my daily work.
These users generally had limited knowledge of the crypto industry and exchanges. Many did not use X and primarily communicated through WeChat or other messaging platforms. Therefore, when people on X discussed issues such as the collapse of platform-token prices or potential exit scams, relatively few of the affected users actually participated in those discussions. JuCoin’s larger user base consisted of people who did not use X and only encountered the platform through WeChat and similar channels.
Host: What did these users mainly do after joining JuCoin?
Dougao: JuCoin primarily targeted users in lower-tier markets, and its model was relatively similar to a traditional Ponzi-like investment scheme. Put simply, users were encouraged to keep their money on the platform in exchange for so-called points or computing power. They could then use that computing power for mining, potentially earning a particular token or JuCoin’s platform token, which they could supposedly sell afterward.
However, these rewards usually came with lock-up periods. Users could not necessarily sell them immediately after mining them, which kept their funds inside the platform for longer.
JuCoin’s app was also unusual because it integrated numerous third-party mini-apps, most of which were essentially built around different Ponzi-like schemes. They used different names to encourage users to deposit funds and then promised certain returns. In the early stages, while the platform still had sufficient funds, users might indeed have been able to withdraw. But during the middle and later stages, more and more rules would be introduced. For example, mining rewards might be released only after 7, 14, or 21 days, or become subject to other restrictions.
At a later stage, the platform token might be deliberately dumped, while some projects might simply shut down. Although these products appeared to have many different rules, their underlying purpose was the same: to lock users’ money into the platform and use interest or promised returns to persuade them to keep it there.
I did not examine the specific rules behind the discounted token purchases that appeared later. However, based on the other products and user groups I encountered, JuCoin was not targeting experienced users who had spent years trading on major exchanges such as Binance or OKX. It was more focused on users in lower-tier markets who had limited knowledge of the crypto industry.
Host: Did JuCoin’s business model affect the direction of your work? For example, did the platform ask employees to restrict user withdrawals as much as possible?
Dougao: That did happen. Risk controls at small exchanges are generally less rigorous, although some users still conduct actual trades on these platforms. But if a user deposited 1,000 USDT, earned another 500 USDT through trading, and then attempted to withdraw the full 1,500 USDT at once, the platform would probably block the withdrawal.
The key criterion was whether “withdrawals exceeded deposits.” If the amount a user attempted to withdraw was greater than the amount they had deposited, the platform was less likely to approve it and might even deduct the user’s profits. The platform could provide many different explanations, but the result was that users could not withdraw their money smoothly.
The backend system could generally identify these situations. A platform such as JuCoin had a dedicated internal system that displayed users’ deposits, profits, and withdrawals. As I recall, JuCoin’s backend code and templates may have come from XT, or XT.com, meaning that it may have purchased an exchange system template or codebase from XT.
Inside CoinUp: Position Cuts, Low Pay, and Token-Purchase Requirements for Team Leaders
Host: Did you encounter any salary payment issues while working at JuCoin? When did you subsequently join CoinUp?
Dougao: I was informed that I would be laid off before JuCoin ran into trouble, so in that sense, I narrowly avoided the crisis. All of my previous salary was paid normally when I left, and the handover process went relatively smoothly. By the time JuCoin encountered problems later, I was no longer there.
I left CoinUp for a similar reason. My position was suddenly eliminated. In my view, one of the biggest problems with these scheme-driven exchanges is that the owner and senior management have absolute authority. If a particular business or operation does not align with the views of the owner or a powerful executive, the relevant positions may be restructured or eliminated.
They also lay off employees in the name of cutting costs and improving efficiency. Even though salaries are already relatively low, they continue trying to reduce expenses.
Host: What salary levels do employees at these exchanges typically receive? What are the workload and geographic distribution of their teams like?
Dougao: Using Gate as a familiar point of comparison, salaries at these exchanges might be around 80% of what Gate pays. Outsiders may assume that these exchanges offer high salaries, but that is not actually the case. Even if a candidate requests only slightly more than Gate would pay, the exchange may still try to negotiate the salary down.
Salaries for non-technical positions generally range from RMB 10,000 to RMB 15,000 per month. They are not particularly high.
The workload depends on the stage of the business. Employees can be quite busy when the platform is running campaigns, conducting offline promotions, or pursuing a major marketing push. If there are no campaigns, or if offline promotions and marketing fail to produce significant growth, the daily workload is not especially heavy.
CoinUp’s workforce was also geographically dispersed. In addition to employees in mainland China, it included many ethnic Chinese employees based in Southeast Asia, including Malaysia and Singapore.
Many team leaders did purchase CoinUp’s platform token, CPX. However, I do not know much about the exact relationship between CPX and earlier tokens associated with the platform, or how those tokens evolved over time.
How the Three Exchanges Operated: JuCoin’s Agent Commissions, CoinUp’s Platform Token, and WebSea’s Principal-Protected Copy Trading
Host: You mentioned that withdrawals were more likely to be restricted when the amount withdrawn exceeded the amount deposited. Did all three exchanges have similar problems?
Dougao: The situation differed from one exchange to another. WebSea did not initially operate this way and was more like a conventional exchange. Later, possibly because its development was not going well, it began shifting toward Ponzi-like products and using various methods to attract user funds.
The latter two exchanges displayed more obvious characteristics of Ponzi-like schemes and market manipulation, and they had relatively few genuine traders. If users attempted to profit from an early rise in a platform token and then withdraw their money, the platform would generally refuse to approve the withdrawal and might even deduct the profits directly. In other words, users who traded genuinely and attempted to make money often encountered obstacles when withdrawing their funds.
Agents and leaders of larger teams generally found it easier to withdraw. At JuCoin, these people were usually called “team leaders,” similar to major agents or brokers at other exchanges. When ordinary users encountered withdrawal problems, the platform often told them to contact their respective team leaders to coordinate the matter.
These cases may have involved commission rates and internal allocations across different levels of the agent hierarchy. As a result, the platform usually did not handle ordinary users’ problems directly. Instead, team leaders were responsible for negotiating how much could be withdrawn and how the withdrawal would be processed.
Host: How high are the agent commission rates at these small exchanges? Some people claim that team leaders can receive as much as 50% of the deposits made by the users they refer. Did JuCoin operate similarly?
Dougao: The rate was roughly in that range, and 50% may even be a conservative estimate. Some agents may have received a higher percentage, depending on what they negotiated.
JuCoin’s agent system had a highly complex hierarchy and could theoretically extend through an unlimited number of levels. One person might have 20 to 30 layers of agents beneath them. Whenever a lower-level user made a deposit, part of the money could be distributed to the agent above them and then continue flowing to agents at higher levels. In other words, a single deposit might be divided among multiple layers of agents.
This is also why, when ordinary users or lower-level agents encountered problems involving rebates, commission rates, or withdrawals, the platform generally told them to contact their team leader. These issues often involved internal contracts, terms, and revenue-sharing arrangements between the users or agents and their team leaders.
However, the three exchanges did not operate in exactly the same way. WebSea did not use this type of unlimited multi-level agent structure, while CoinUp’s agent system was also different. CoinUp and JuCoin had similar user demographics and Ponzi-like operating models, but their agent rules still differed.
Host: How did the agent systems at WebSea and CoinUp operate?
Dougao: I had relatively limited exposure to WebSea’s early agent model. From what I understood, it was closer to the conventional agent system used by exchanges, with upper-level and lower-level agents across perhaps only a few tiers. The system mainly relied on trading-fee rebates and did not have a particularly complex hierarchy.
CoinUp also had a team-leader system, but it had fewer layers than JuCoin. One unusual feature was that some team leaders or agents were required to purchase CPX, the platform token. CPX later suffered a severe price collapse, essentially because many agents and users had bought the token. The platform effectively controlled the market and then used the platform token to profit at their expense.
Host: Some exchanges profit from customer trading losses, making it inherently difficult for users to earn money on the platform. Even when individual users record profits on paper, do they still struggle to withdraw those profits?
Dougao: Yes. However, these exchanges were not typical platforms that primarily profited from customer trading losses, because almost no one used their spot or derivatives markets. Most users participated in the Ponzi-like products offered within the platforms.
In its later stages, WebSea adopted another model called “principal-protected copy trading.” On the surface, any losses generated through copy trading were supposedly covered by the lead trader, which attracted many users to deposit funds. In reality, however, the users still bore the losses. The arrangement was simply packaged differently.
WebSea had offered copy trading for some time, but it had not been particularly successful. After it introduced “principal-protected copy trading,” many users were attracted back because they believed someone else would cover any losses. In reality, most of these lead traders were neither genuine external traders nor popular trading influencers on X. They were accounts developed internally by WebSea, and many were operated by company insiders.
From the platform’s perspective, whether these lead traders recorded profits or losses on paper did not matter, because the funds in their accounts were essentially just numbers within the platform’s internal system. Unless the money was actually withdrawn, those balances could not be realized. The platform’s real objective was to attract user funds and keep them circulating within the platform.
This is also why, when WebSea encountered another crisis later, the inability of users to withdraw their funds generated much greater public controversy than the first incident.
Beware the High-Yield Narratives of Small Exchanges: Withdrawal Risks Behind Principal Protection, Copy Trading, and Discounted Token Sales
Host: The platform tokens of these three exchanges, including JuCoin’s JU, WebSea’s WBS, and CoinUp’s CPX, appear to have followed similar price patterns: an initial rally followed by a sudden collapse. Do exchanges like these frequently use this model?
Dougao: Yes. They usually present their platform tokens as highly valuable and promote various supposed utilities. Some offline promoters even promise users returns of several times their initial investment to attract middle-aged and elderly buyers.
After buying the token and watching its price chart continue rising, users believe they made the right decision. But when the platform is ready to profit at their expense, the token price may suddenly collapse. Users not only suffer losses, but also find it difficult to withdraw their remaining funds.
These exchanges also organize offline events in mainland China, but doing so carries significant risks. They primarily target individual users in the country, and their businesses have clear characteristics of Ponzi-like schemes. If someone reports them or large groups of affected users gather to demand compensation, the personnel running these offline activities can easily be arrested.
However, many offline events are actually organized by local promoters who may not be formal employees of the exchange group. Their supervisors generally use Telegram, Lark, and similar tools to arrange budgets and activities and verify the results. These supervisors are often based overseas in places such as Thailand, Malaysia, and Indonesia rather than in mainland China. In JuCoin’s case, the people operating inside the country were generally only frontline promoters or business development staff.
As a result, even if the people running offline activities are arrested, they can provide only limited information, perhaps no more than the contact details of their supervisors. The actual senior managers and core teams are generally based overseas, and frontline staff in mainland China are unlikely to possess more useful information.
While working at these three exchanges, I did not encounter any cases in which an offline office or one of my colleagues was raided or arrested. However, I did experience similar incidents at other exchanges.
Host: Before joining these exchanges, you already had a general understanding of their business models. Were you not concerned about the risks? What were you considering at the time?
Dougao: This is certainly a controversial point. From an ethical perspective, these businesses are inherently problematic. However, I was primarily interested in understanding how they operated: how they packaged their projects, attracted users, extracted money from them, and which groups they mainly targeted.
After these platforms ran into trouble, I considered writing about my observations and views, but I never developed them into a more complete account.
I believe exchanges like these will become increasingly common in a bear market. Since last year, the broader crypto market has continued to decline, making it extremely difficult for conventional small exchanges to grow. Major exchanges have captured most trading volume as well as both existing and new users, while other sources of new demand have been diverted to the U.S. stock market and other markets.
Under these conditions, many small exchanges may shift toward operating models similar to those of WebSea, JuCoin, and CoinUp. This may be particularly true of exchanges ranked outside the top 20 or 30 on CoinMarketCap, although some higher-ranked platforms may also be experimenting with similar models. Based on what I have encountered and learned, these models may become increasingly common during a bear market.
Host: Small exchanges like these often attract users through rising platform-token prices, discounted token sales, principal-protected copy trading, and various high-yield promotions. What should ordinary users be most cautious about?
Dougao: The key is to avoid participating in these small exchanges without carefully considering the risks. They use rising platform-token prices, discounted token sales, copy trading, promised returns, or high annualized yields to persuade users to deposit their principal. The returns may appear attractive, but once the platform’s cash flow encounters problems, users will find it extremely difficult to withdraw their funds.
Many exchanges currently ranked outside the top 20 or 30 on CoinMarketCap use similar Ponzi-like models. The high returns shown to users are often simply packaging designed to attract deposits.
Host: How are these exchanges managed internally? Can employees interact with the real owners?
Dougao: Most employees communicate primarily with their direct supervisors and have no access to the actual owners. Some platforms have visible public-facing managers. At CoinUp, for example, internal operations were mainly overseen by someone known as “Sister Q,” who recently also spoke publicly on X.
However, these public-facing managers are not necessarily the true owners behind the platforms. Ordinary employees generally do not know who actually provides the capital, controls the movement of funds, and oversees the exchange’s overall operations. WebSea and CoinUp likely both have actual financial backers or owners behind the scenes, but their identities are unclear.
After WebSea’s first crisis, I heard a claim that an investor behind the platform may have suddenly withdrawn their funding. However, I do not know what actually happened or who that investor may have been.
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Bernstein analysts expect Bitcoin to reach roughly $125k by the end of 2026, a new high of $150k by mid-2027 and a cycle peak of around $300k in 2029 under their base case.
If currency debasement accelerates institutional inflows, Bitcoin could reach $200k by mid-2027 and $500k in 2029. Bernstein maintained its long-term forecast of approximately $1 million by the end of 2033.
The firm maintained its Outperform rating on Strategy but cut its price target from $450 to $350, citing a revised Bitcoin cycle outlook and accelerated equity dilution.

CryptoQuant said Bitcoin has gained 24% since Aug. 17 and reached $80,000, while its Bull Score surged from 30 to 80 — the most bullish reading since Oct. 6, 2025 — with eight of 10 indicators now flashing bullish.
Apparent spot demand is growing at its fastest monthly pace since late December, while spot and futures demand are expanding together for the first time since early October 2025. CryptoQuant said the market has entered the initial phase of a new bull market, but a close above the 365-day moving average near $83,000 is still required for confirmation.
Near-term overheating risks remain: traders’ unrealized profit margin rose to 20.5%, the highest since June 2025; whales realized a record $614 million in profits on Aug. 20; and rising BTC, ETH and XRP exchange inflows point to potential short-term selling pressure.

Hyperliquid announced the activation of its "AQAv2 (Aligned Quote Asset v2)" framework starting August 26, which directs yield generated from USDC reserves toward programmatic market buybacks and burns of the native HYPE token. Under the structure—supported by Circle as technical deployer and Coinbase as treasury manager—approximately 90% of reserve yield is shared with the protocol and transferred in 30-day cycles to the Assistance Fund (AF) to execute HYPE buybacks and permanent burns. Yield accrual begins on August 26 with the inaugural payout and execution scheduled for October 3.

Michael Saylor: The Single Most Important Thing Right Now Is to Fix the Credit Business
At Strategy's Q2 2026 investor Q&A, livestreamed on Aug. 17, regarding the company's future business blueprint and capital allocation strategy, Executive Chairman Michael Saylor stated that Strategy aims to be the JPMorgan of digital assets, though without copying traditional banking models.
He emphasized that building on holding 4% of the global Bitcoin supply, the key lies in developing products on top of Bitcoin, such as digital equity MSTR and digital credit STRC. The single most important task right now is fixing the digital credit business, as fixing credit will expand equity premiums and drive the company's valuation toward hundreds of billions or even a trillion dollars.

According to Nikkei, the Japanese government, the Bank of Japan (BOJ), and financial institutions plan to develop a next-generation blockchain-based financial settlement infrastructure, aiming to enable 24/7 real-time settlement for assets such as government bonds and stocks. The Financial Services Agency (FSA), Ministry of Finance, BOJ, and relevant financial institutions will establish a study group this summer and plan to formulate a development plan in early 2027, covering blockchain architecture and how the government, central bank, and financial institutions will collaborate. Japan has previously conducted several blockchain-based financial experiments, but this is the first project with a clear implementation timeline.

Jon Atack, a Bitcoin Core contributor residing in El Salvador, reported that a restaurant in El Zonte (known as "Bitcoin Beach") told him his lunch bill was the establishment's only bitcoin transaction for the entire month, with staff noting that everyday BTC payments have significantly declined in favor of card payments. Analysts attribute the drop in merchant velocity to a prevalent "HODL" mindset—where holders view Bitcoin as a long-term store of value rather than transactional cash—alongside high asset volatility. Following revisions under its IMF loan agreement, El Salvador also made merchant acceptance of Bitcoin voluntary rather than mandatory.

Jon Atack, a Bitcoin Core contributor residing in El Salvador, reported that a restaurant in El Zonte (known as "Bitcoin Beach") told him his lunch bill was the establishment's only bitcoin transaction for the entire month, with staff noting that everyday BTC payments have significantly declined in favor of card payments. Analysts attribute the drop in merchant velocity to a prevalent "HODL" mindset—where holders view Bitcoin as a long-term store of value rather than transactional cash—alongside high asset volatility. Following revisions under its IMF loan agreement, El Salvador also made merchant acceptance of Bitcoin voluntary rather than mandatory.

Bloomberg reported that Kraken said some customers were temporarily locked out after receiving small crypto transfers from a wallet identified by Arkham Intelligence as linked to HTX. Kraken described the activity as a “dust attack,” saying it may have been intended to spread sanctioned funds and trigger compliance reviews at other platforms. From Aug. 17 to 24, the wallet sent nearly 12,000 small transfers to Kraken-linked addresses, mostly worth only a few cents or dollars. Kraken has restored access to affected accounts while continuing to hold the sanctioned funds. HTX denied initiating the transfers and said it is investigating possible address misattribution or malicious third-party activity.

CNBC reported that Goldman Sachs maintained its Buy rating on Coinbase (COIN) and raised its price target to $196 from $173, citing additional upside from a sustained improvement in the crypto market and continued growth in newer businesses including derivatives and prediction markets. Canaccord also maintained its Buy rating on Strategy (MSTR) and lifted its target to $175 from $130, saying the setup for MSTR has materially improved in recent weeks. Elsewhere, Raymond James upgraded AMD to Strong Buy, while Bank of America remained positive on Nvidia, Micron and Marvell; Moderna, Dynatrace and Shift4 Payments also received rating upgrades.

Grayscale launched the Zcash ETF (ZCSH) on Aug. 25, with the product now trading on NYSE Arca. Converted from the Grayscale Zcash Trust, it is the first U.S. exchange-traded product focused on ZEC. As of Aug. 24, ZCSH had about $314 million in assets under management and held roughly 387,200 ZEC, with a 2.5% management fee. Grayscale said management fee revenue for up to 12 months following the effectiveness of the registration statement will be used to support the Zcash ecosystem and product marketing.

Complied by | WuBlockchain
Original Link:
https://www.wublock123.com/articles/microstrategy-death-spiral-risk-macro-outlook-h2-2026-59118
This article is based on remarks made by Bocai, co-founder and CEO of Unified Labs, on the WuBlockchain Podcast. Bocai believes that the RWA sector is currently marked by a clear divide: traditional financial institutions such as BlackRock are accelerating their entry into the market and bringing products to market, while the crypto side remains rife with disorder and Ponzi-like schemes.
In Bocai’s view, RWA is fundamentally an onchain upgrade of the traditional financial system. It is an institutional game that relies heavily on regulatory and compliance endorsement, and issuers without the necessary licenses have very little credibility. The primary purpose of bringing assets onchain is not speculation, but to overcome geographical restrictions, promote financial inclusion, and use DeFi to remove traditional financial intermediaries. This can enable more efficient and lower-cost onchain financial applications, such as collateralized lending. Bocai said that DeFi’s decentralized structure provides certainty in code execution, while the centralized nature of RWA addresses asset ownership verification and investor protection. Combining the two can significantly improve efficiency.
Discussing risk management for onchain assets, he noted that RWA products are currently often issued through offshore special purpose vehicles (SPVs). If problems arise with the underlying assets, ordinary users may face extremely high costs when pursuing cross-border claims or litigation, while local regulators may also find it difficult to intervene directly. On the regulatory front, he highlighted the legislative progress of bills such as the U.S. CLARITY Act. He expects the RWA market to experience exponential growth between 2027 and 2030 as regulatory frameworks in the United States, Japan, Singapore, and other jurisdictions are substantively implemented.
In practice, Unified Labs aims to serve as an “onchain fund manager” for RWA assets. By providing lending pools and decentralized vaults built on Morpho’s architecture, it seeks to meet demand for liquidity in derivative financial services after assets are brought onchain. Bocai advised ordinary investors to remain cautious and continue observing the market until clear federal-level legislation is enacted.
Sector Outlook: RWA Is an Institutional Game, and Combining Onchain Assets with DeFi Is the Key to Breaking Through
Bocai: I am the co-founder and CEO of Unified Labs, as well as a content creator. I am pleased to join the WuBlockchain Podcast to discuss RWA. I entered the crypto industry in 2021 and was deeply involved in founding and conducting investment research for several well-known DAOs. I also wrote numerous long-form research reports on DeFi, the EVM ecosystem, smart contract security, and oracles, which helped me build a comprehensive knowledge base.
When I went to Australia to study in 2023, I had the opportunity to participate in the Reserve Bank of Australia’s onchain CBDC pilot. We were one of the few startup teams selected at the time and explored a range of innovations in supply chain finance, including ways to address document fraud and accounts receivable financing. Because the project was highly innovative, we later worked with the Monetary Authority of Singapore and the Bank of Ghana on an international trade pilot, exploring cross-border programmable payments and trade finance. This experience gave me the opportunity to work with central bank regulators and traditional financial institutions. It taught me how to integrate onchain and offchain systems in practice, rather than simply speculating on concepts without substance.
At the time, I was closely following regulatory developments and saw major institutions, including the IMF, the BIS, the Monetary Authority of Singapore, and the Bank of England, frequently introducing tokenization policies and innovation initiatives between 2023 and 2024. This convinced me that the RWA sector would eventually experience significant growth, driven primarily by regulatory support and the removal of policy barriers.
During this period, I also co-organized an RWA incubator, which allowed me to continuously observe the business models and development of different projects. However, I found that many startups ultimately failed to survive.
I began to realize that RWA issuance is largely an institutional game, with very limited entry points for startups. However, as the regulatory and legal environment became much more open after Trump took office, particularly with the recent major progress on the CLARITY Act, I decided to enter the market myself at the end of last year and founded Unified Labs, which focuses on combining RWA with DeFi.
The opportunity I see is that although issuing RWA assets is difficult, bringing these assets onchain creates enormous demand for derivative financial services, with collateralized lending representing the largest market. As the first Chinese team in Asia to receive Morpho’s whitelist approval with a focus on RWA + DeFi, we are committed to addressing liquidity challenges for RWA assets. We build customized lending pools on Morpho for RWA issuers and provide a Vault where onchain yield users can deposit funds and earn returns generated by lending against the underlying RWA assets. By directing liquidity into these lending pools, we enable RWA assets to be used as collateral for onchain loans and expand their utility. That is what we are currently building.
Current State of the Sector: RWA Remains Deeply Divided, With Compliance and Regulation as the Foundation for Bringing Assets Onchain
Maodi: Ordinary users are still fairly uncertain about the current state of RWA. Could you explain the sector’s progress and its overall structure?
Bocai: Perceptions of the RWA sector within the industry are highly divided. In 2023, Citibank published an RWA report predicting that the market would reach trillions of dollars by 2030. That report truly ignited the sector. Everyone began discussing the idea of bringing everything onchain, and new startups emerged one after another. However, from 2024 to the present, there has been substantial progress in RWA within traditional finance, while the crypto sector has yet to produce any projects that have truly gained traction.
Maodi: What progress has been made?
Bocai: First, Citibank’s 2024 report encouraged many institutions to begin exploring the sector. People in crypto rarely pay attention to these developments, but many leading traditional financial institutions began establishing digital asset divisions, conducting internal pilots on consortium chains or within regulatory sandboxes, and gradually bringing assets onchain. When I read their research reports, I felt that traditional finance professionals understood crypto better than we did. Their work was highly professional. Institutions such as BlackRock, Franklin Templeton, OCBC, and BNY had not yet launched products at the time, but now almost all major financial institutions have entered the market and have either issued or are preparing to issue RWA assets.
Second, there has also been significant regulatory progress. After Trump took office, he personally advanced several bills and detailed rules. I frequently write about the SEC’s latest statements and guidance, and you can see regulators effectively teaching the market how to issue RWA assets by clearly defining the relevant frameworks and boundaries. Development has been extremely rapid over the past two years. Some countries may even begin lifting certain restrictions on retail access to RWA products this year or next year.
From the perspective of traditional finance, institutions are entering the market at scale, products are being launched, and new regulations are being introduced. On the crypto side, however, the market was initially filled with disorder. Various questionable RWA issuers emerged, tokenizing unusual assets such as wine and Hainan rosewood to raise money fraudulently. There were also numerous Ponzi-like schemes organizing large conferences under the RWA banner to exploit retail investors.
The teams that have successfully launched RWA products and survived generally have backgrounds in traditional finance, including Securitize and several projects founded by Chinese teams. Very few teams with purely crypto backgrounds have managed to gain traction. This reflects the deep divide between the two fields. The builders still working on RWA are generally advancing their projects quietly and rarely promote themselves publicly. That is the sector’s current state.
Maodi: In the crypto and AI industries, products or demand usually emerge first, with regulation catching up afterward. Why does the RWA sector appear to work in the opposite direction, with products only emerging after regulation is established?
Bocai: RWA development does not wait for regulation to be fully implemented. Once regulators provide a clear indication of where the rules are heading, market participants begin building. In 2024, before Trump took office and before the CLARITY Act made any breakthrough, institutions had already entered the market because they knew this was the direction of the future. Trump’s return to office served as a catalyst that accelerated the process. Once regulators clarified their position, institutions began entering the market at scale.
Why is regulation so important? Because RWA differs from most crypto sectors. In crypto, projects often issue tokens and rely on speculation to drive up prices and generate profits. RWA, by contrast, brings traditional assets onchain and upgrades the broader traditional financial system. This process does not create new assets. It uses new infrastructure to rebuild the traditional financial system in a different environment. The underlying logic is different. Assets brought onchain are difficult to treat as purely speculative instruments, and because they represent actual assets, compliance is essential.
First, these assets are held by financial institutions. To sell them onchain, their ownership must be legally recognized and verified. Without legal protection for ownership rights, what exactly are users buying? Could anyone simply issue an asset and disappear with the proceeds? That would clearly be unreasonable and would never pass an institution’s risk controls.
Second, investors must be protected. People who buy tokens for speculative purposes understand that they are accepting the associated risks. People who buy assets, however, do so to earn annualized returns, not to speculate on rising prices. In this context, legal oversight, regulation, and compliance are essential.
Redefining Value: Combining RWA with DeFi Will Replace Traditional Financial Intermediaries, Reduce Costs, and Improve Efficiency
Maodi: Does RWA genuinely offer value to blockchain users? People seeking relatively stable but low-yield assets are usually high-net-worth individuals who can already purchase them through traditional financial channels. Why would they need to access these assets onchain? Is there really demand within the crypto industry for a distribution channel offering relatively stable returns?
Bocai: If you are an onchain user seeking high returns, that is a different matter. However, when considering the significance of RWA for global investors and ordinary people, the first benefit is that it lowers barriers to access and promotes global financial inclusion.
U.S. dollar stablecoins are actually the most successful form of RWA. They have expanded the distribution of the U.S. dollar globally, allowing people in regions underserved by financial institutions to hold digital dollars onchain. These people may previously have had no access to local banking services, but now they only need a wallet to hold digital dollars and gain access to assets that were previously beyond their reach. Once they have digital dollars, they can purchase high-quality U.S. assets.
Second, why would high-net-worth professional investors who can already purchase assets through traditional channels choose to buy them onchain? The key is that onchain infrastructure can provide capabilities that traditional finance cannot.
One example is collateralized lending through DeFi. For certain assets, collateralized lending is almost unavailable in traditional finance. Take gold as an example. It is difficult to use gold directly as collateral for a loan in traditional finance. Banks and brokerages generally do not provide this service because transportation, custody, and valuation make the process extremely complicated, and there is no central clearinghouse. This type of service is generally available only to private banking clients with more than 50 million in assets.
Borrowing against traditional fund holdings is similarly difficult. Such services are generally available only for high-quality funds, the process can take one or two weeks, ownership transfers must be registered through a transfer agent, and the interest rates are often unattractive. Onchain, however, anyone in the world who owns the asset can borrow cash directly from a DeFi pool. This removes all intermediaries, provides immediate liquidity, and offers more favorable interest rates than traditional finance.
Professional investors can therefore use onchain infrastructure to generate higher returns or access DeFi innovations such as PT and YT, which are unavailable in traditional finance. RWA creates a globally accessible channel through which people can obtain high-quality assets at any time and use onchain infrastructure to enhance returns. This is the real significance of RWA for most people. It is not simply about speculating on assets for profit, which is a common misunderstanding of RWA.
Maodi: Do investors need to establish legal ownership of RWA assets and complete KYC verification? Otherwise, they may violate restrictions imposed by regulators such as the SEC or CFTC, making it impossible to integrate these assets with DeFi. But if users must satisfy these requirements, does that not simply lead back to the traditional financial system? Is this a paradox?
Bocai: I do not think it is a paradox. It is an ideological question. If you are a crypto-native fundamentalist who pursues absolute decentralization and the complete absence of regulation, then you may see it that way. From a practical perspective, however, decentralization does not mean completely eliminating every intermediary and centralized mechanism. That is unrealistic. What belongs to God belongs to God, and what belongs to Caesar belongs to Caesar. Decentralized and centralized mechanisms each address different problems.
DeFi removes intermediaries and legal enforcement processes from traditional finance and replaces them with automated code execution. However, DeFi is not completely decentralized. Many smart contracts still retain owner privileges, and some project teams have even misappropriated funds and disappeared. What is truly decentralized is the consensus around rules established through distributed nodes and code. The code executes exactly as written, providing certainty of execution.
The centralized nature of RWA, meanwhile, addresses the issue of trust. These assets are originally issued within traditional finance. Without institutional backing and legal protections, how would RWA assets differ from meme coins? Investors will only feel confident purchasing them when institutions bring the assets onchain themselves and investors’ rights are protected by law. Combining the two means using blockchain infrastructure to conduct traditional financial business.
When RWA assets use DeFi services onchain, they can completely bypass the intermediaries in the traditional financial system, resulting in greater efficiency and lower costs. This is central to our understanding of RWA. It should not simply be viewed as a paradox from the perspective of decentralization.
RWA returns to users the layers of fees and profits traditionally extracted by financial intermediaries. For traditional institutions, doing this amounts to disrupting their own businesses, but they have no alternative. If they do not adapt, they will be eliminated. They must therefore enter the market proactively and compete for influence. This is the primary motivation I currently see behind their entry into the sector.
Risk Management: RWA Product Categories, Return Expectations, and DeFi Integration Strategies
Maodi: Could repeated collateralization onchain amplify risks within the financial system? How should the RWA sector approach risk management in the future?
Bocai: I previously worked on related innovations during a central bank pilot project, where we used the ERC-3525 standard to tokenize a CDO. The 2008 financial crisis occurred because real estate derivatives contained too many layers of underlying assets. Investors had no idea what those underlying assets actually were. Once the products had been distributed throughout the market and the underlying assets failed, they triggered a chain reaction.
Blockchain can address this problem effectively because its most important feature is transparency. Suppose MBS and CDO products were structured entirely onchain. A tokenized MBS or CDO would allow investors to see which assets it contained. That information is unavailable in traditional finance, but it can be visible onchain.
If those products from 2008 had been issued on a blockchain, the crisis might not have occurred. The key issue, however, lies in the offchain component. If a product is packaged onchain, investors can trace the origin of every underlying asset. But if it is packaged offchain before being brought onchain, that information remains invisible. The real problem that needs to be addressed is offchain transparency.
Maodi: What are the main product categories in the RWA sector today? Are there any other products particularly relevant to ordinary users?
Bocai: On the asset side, the viable categories are relatively limited. They include standardized assets such as U.S. dollars, U.S. Treasuries, money market funds, fixed-income funds, private credit, and gold. Many issues involving non-standardized assets remain unresolved.
U.S. equities are a particularly interesting asset category. Many tokenized U.S. equity products have recently appeared, but their underlying assets are not actual U.S. stocks. Instead, they are derivative contracts pegged to U.S. stock prices, so they are not technically securities.
The SEC recently issued regulatory guidance for tokenized assets, establishing rules for the tokenized U.S. equity sector. The SEC examines the substance of the asset. If the underlying asset is a stock, it is regulated as a security. If it is a derivative, it is regulated under the rules applicable to derivatives.
Previously, many tokenized U.S. equity products may not have fallen within any regulatory framework. Now that the SEC has introduced new rules and major institutions such as the New York Stock Exchange and Nasdaq are entering the market, their tokenized equity products will be backed by actual stocks. This also demonstrates that RWA issuance is fundamentally an institutional game.
Maodi: What exactly does your RWA project do? Could you explain it in plain language?
Bocai: Let me briefly explain what Unified Labs does. The professional term for our role is “Risk Curator,” but in simpler terms, we can be viewed as an onchain fund manager. We operate an onchain financial business and are authorized to perform two functions on Morpho.
First, after RWA assets are brought onchain, we can create lending pools for them. This allows the assets to be used as collateral for loans and creates demand for them.
Second, we will create a Vault on Morpho that functions like an onchain savings product similar to Yu’e Bao. It is non-custodial and allows users to deposit or withdraw funds at any time. Users can deposit stablecoins and earn stable annualized returns. These returns come from lending the stablecoins to borrowers who hold RWA assets.
In simple terms, we allow asset holders to borrow money while enabling depositors to earn returns. The entire process operates through Morpho’s architecture. We have no authority to custody or misappropriate users’ assets.
Maodi: What annualized returns do relatively credible RWA products generally offer?
Bocai: It depends on the underlying assets. There are currently approximately three return ranges in the market.
The first category is relatively safe and stable. Products backed by U.S. dollar money market funds, U.S. Treasuries, or low-risk fixed-income funds may offer returns of around 3% to 5%.
The second category offers approximately 8% to 9%. The underlying assets may include relatively secure accounts receivable from supply chain finance or bridge loans for cross-border payments.
At the higher end, private credit products may offer approximately 12% to 13%. Their underlying assets may include consumer credit in Southeast Asia or private credit issued to small and medium-sized companies. Their redemption periods may be around one month.
The yield alone can only indicate the general level of risk. To determine whether a product is credible, investors must also examine the issuer and the composition of the underlying assets. For private credit, for example, investors need to know which industries the loans are being extended to.
BlackRock recently encountered liquidity issues in private credit because AI severely disrupted certain software companies, causing their cash flows to decline sharply and affecting the overall health of the portfolio. Users therefore need to examine both the issuer’s background and the composition of the underlying assets when assessing a product’s credibility.
Maodi: Through which channels can investors generally purchase these RWA yield products?
Bocai: Ordinary users generally encounter them through distribution channels such as centralized exchanges. Many retail investors do not purchase RWA assets directly, but they are very interested when the assets are packaged as yield-bearing stablecoins. It is an interesting phenomenon.
The second option is to purchase them directly through the project’s official website, although KYC is generally required.
Maodi: If users do not pass or cannot complete KYC, can they only purchase the assets through an onchain DEX?
Bocai: They generally cannot purchase them on a DEX.
Maodi: Is that because doing so would not meet regulatory requirements?
Bocai: Yes. If KYC is required, transfers must be restricted to whitelisted addresses, so there is generally no liquidity on DEXs. The current solution is for some projects to package the assets as yield-bearing stablecoins to attract retail investors.
Maodi: Do retail investors prefer these products because their access channels are limited and this is their only practical option?
Bocai: Limited access is one reason. Another is that crypto-native users are very comfortable with these products. Yield-bearing stablecoins have long existed in the industry and can be used for airdrop farming and DeFi strategies. Crypto-native users are more familiar with these types of products.
Regulatory Framework: The U.S. CLARITY Act Will Be a Key Milestone for RWA Growth in 2027
Maodi: If problems arise with the assets underlying an RWA product, how can asset holders protect their rights? Must they simply wait for regulators to intervene or pursue complicated legal proceedings that may take years before they can recover their assets?
Bocai: You have identified a major pain point in the RWA sector. Many RWA assets issued onchain today do not represent the underlying assets themselves. Instead, they represent claims against an SPV. An SPV, or special purpose vehicle, is a legal entity established for a specific purpose and is usually incorporated in the Cayman Islands or the British Virgin Islands.
For example, an SPV may be established in the BVI to hold the underlying assets, after which interests in the SPV are tokenized. What users purchase is effectively a claim against the SPV. When redeeming the tokens, users are legally requesting that the SPV redeem the assets it holds. SPVs are generally structured to provide bankruptcy remoteness. If an SPV becomes insolvent, investors can theoretically recover their assets through legal proceedings.
In practice, however, this is extremely complicated because it involves numerous cross-border legal issues. The underlying assets may be located in the United States or another country, while the entity being sued is incorporated in the BVI. Investors would therefore need to bring a case before a BVI court. The process can be extremely expensive and lengthy, potentially requiring several years and hundreds of thousands of dollars in legal fees.
Regulators may also be unable to assist because investors hold interests issued in the BVI rather than assets issued within the regulatory jurisdiction of Hong Kong or the United States. Local regulators cannot intervene directly. This is a major industry-wide pain point for which there is currently no standardized solution. The underlying reason is that comprehensive regulatory frameworks are still being developed, leaving the industry reliant on this transitional structure.
Once future legal frameworks are implemented, assets could be issued within local regulatory jurisdictions and directly represent the underlying assets themselves. If problems arise, local regulators would then be able to help investors protect their rights.
For now, investors must accept these risks and try to select reputable tokenization issuers, or Wrappers. Securitize, for example, is backed by BlackRock, while DigiFT has obtained a license after participating in Singapore’s regulatory sandbox. Issuers backed by major institutions and regulatory licenses are relatively credible. Unlicensed teams with no established background have very little credibility and present a much higher risk of misappropriating funds and disappearing.
Maodi: Are there any important timelines or legal frameworks worth monitoring? When will investors have formal channels through which to protect their rights?
Bocai: Regarding RWA regulation, I strongly recommend focusing on the U.S. CLARITY Act, or Digital Asset Market Clarity Act, which has recently made significant progress. Once the United States passes it, other countries are likely to follow quickly. The bill clearly defines whether security tokens and commodity tokens fall under the jurisdiction of the SEC or the CFTC.
In the past, regulatory boundaries in the United States were unclear, and the SEC and CFTC repeatedly competed for jurisdiction over Ether. Until this issue is resolved, institutions will be reluctant to issue securities directly because a change in administration could leave them exposed to regulatory scrutiny. Only federal legislation can provide a clear framework for RWA. Once the CLARITY Act is passed, it will become a catalyst for faster regulatory development worldwide.
The bill has now addressed a major point of contention between the banking and crypto industries, primarily concerning whether stablecoins can generate yield. The final compromise is that simply holding a stablecoin cannot entitle users to returns generated by its underlying assets. Users may earn returns only by using the stablecoin to participate in actual activities.
With this dispute now resolved, the legislative process is expected to move forward. If everything proceeds smoothly, the bill could be enacted within the next few months, with implementation likely beginning in 2027. I have also been monitoring other countries. The Monetary Authority of Singapore already provides highly detailed guidance on RWA issuance on its website. Japan is also expected to implement substantive legislation in 2027, opening its stablecoin and RWA markets. I therefore expect the RWA market to experience exponential growth between 2027 and 2030.
Maodi: Do institutions have specific preferences when choosing blockchains on which to issue RWA assets?
Bocai: Most major assets are currently issued on Ethereum or Solana, although some are also issued on Arbitrum, Avalanche, and Monad. Blockchains with strong institutional relationships tend to attract more RWA issuance. Avalanche, for example, has implemented projects through direct partnerships with major Japanese companies. Many Wall Street institutions are also likely to issue RWA assets on Monad because it has a strong institutional background. Ultimately, the choice depends on each blockchain’s underlying characteristics and institutional pedigree.
Sector Outlook: RWA Startups Face High Barriers, and the U.S. CLARITY Act Will Shape the Next Four to Five Years
Maodi: What advice or potential entry points would you suggest for ordinary users who want to participate in the RWA sector?
Bocai: RWA is fundamentally an onchain upgrade of traditional financial services. For ordinary people, investing in assets is not the only option. Entrepreneurship is another possible direction. The real opportunities lie in addressing the derivative financial needs and pain points that emerge after assets are brought onchain. Providing services to institutions during their transition to onchain finance is currently one of the few entrepreneurial opportunities available to ordinary people. However, there is now very limited room for projects focused solely on issuing tokens.
Maodi: But this type of entrepreneurship also requires specific qualifications or experience, so the barriers to entry are quite high, correct?
Bocai: Building an RWA startup generally requires a team with combined experience in traditional finance and Web3. Founders must either be able to navigate and work across both sectors or address specific pain points through technical expertise. The industry’s barriers to entry continue to rise. The days when a team could raise tens of millions with nothing more than a pitch deck are over, and private market fundraising is currently in a deep freeze.
Many sectors, including perpetual DEXs and prediction markets, have become intensely competitive, while others have ultimately failed to prove viable. RWA represents one of the few remaining growth opportunities for the industry.
Maodi: Despite the considerable market attention, RWA is still at an early stage. Is the best advice for ordinary users to remain cautious and wait for regulatory frameworks to be implemented before investing?
Bocai: There is still considerable policy uncertainty. For example, will the U.S. CLARITY Act ultimately be enacted? If it is not enacted, a change in administration could reverse all existing policies and force the industry to start over. Although stablecoin legislation has already been enacted and cannot simply be reversed, it would be relatively easy for the next administration to restrict the development of the RWA sector.
Maodi: From a pessimistic perspective, if the bill does not pass, could the sector remain unable to establish itself in the near term and require several more years of exploration?
Bocai: That is correct. Under the U.S. legal system, the SEC’s regulatory plans, rules, guidance, and even presidential executive orders are not permanent. They can be reversed by a future administration at any time. Only legislation enacted at the federal level can provide lasting certainty.
Whether the CLARITY Act is ultimately enacted will directly determine the trajectory of the entire RWA sector over the next four to five years. It is therefore critically important.
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