SEC threatens to customize encryption rules, Morgan Stanley and New York Mellon accelerate instituti

The SEC issues a rare tough ultimatum to Congress

The U.S. Securities and Exchange Commission (SEC) has issued an unusually blunt ultimatum to lawmakers: if the CLARITY Act stalls, the agency will set its own rules for the cryptocurrency market. This statement adds new uncertainty to the regulatory process, which is facing pressure from bank lobbying. The warning came as Morgan Stanley launched Ethereum and Solana's spot exchange-traded products, and Bank of New York Mellon moved fund record custody online.

The SEC's stance actually raises the stakes on a bill that is wavering in the Senate. Less than four days before the scheduled vote, major banking interests have been pushing to weaken or block the bill. The agency's willingness to act unilaterally suggests that senior officials do not intend to plunge the market into a regulatory vacuum even if Congress fails to act.

Morgan Stanley launches spot ETP on two chains

On the product side, Morgan Stanley decided to list spot ETH and Solana ETP, marking its significant expansion beyond Bitcoin. Although the United States has had Bitcoin spot ETP since early 2024, Ethereum and Solana products represent a deeper foray into programmable blockchain. The launch comes as traditional asset management companies continue to test institutions 'interest in multi-asset crypto portfolios.

Solana's inclusion is particularly eye-catching. The network has attracted attention for its high throughput and growing developer base, but has also faced downtime issues and regulatory ambiguity. Morgan Stanley's move suggests the bank's wealth-management clients are interested in exposure beyond the largest assets by market capitalisation.

Bank of New York Mellon moves fund record custody on-chain

Bank of New York Mellon's decision to move part of its fund record custody infrastructure on-chain reflects another institutional belief. Instead of creating new products for customers, the hosting giant is integrating blockchain into its back-office operations. The move is in line with the accelerating trend of tokenization, with the total real-world assets on the chain exceeding US$20 billion this week.

When a 240-year-old bank begins migrating internal processes to a distributed ledger, the signal is harder to ignore than a press release. This suggests that cost savings and settlement efficiency are being tested in regulated workflows, not just in the sandbox of startups.

Strategy holds nearly 844,000 bitcoins but records huge losses

Not all institutional news points in a positive direction. Strategy (formerly MicroStrategy) reported a second-quarter loss of $8.22 billion. The company continues to hold approximately 844,000 bitcoins, making it the world's largest holder of corporate bitcoin. The loss stems from impairment charges caused by the decline in Bitcoin prices during the quarter.

This result highlights the close correlation between Strategy's balance sheet and the trend of spot Bitcoin. Although its beliefs remain unchanged, volatility creates a unique risk profile for shareholders. The incident may also affect the way other listed companies approach Bitcoin treasury strategies in the future.

Digital asset treasury shifts to artificial intelligence infrastructure

At the same time, a group of digital asset treasury companies are quietly shifting their capital from purely encrypted assets to artificial intelligence data centers. This shift reflects the pursuit of income-generating physical infrastructure when holding digital assets on the balance sheet faces significant mark-to-market risks. Several companies are re-using mining facilities or building new capacity specifically for artificial intelligence computing workloads, a trend that coincides with the growing demand for decentralized storage solutions.

What connects these developments is that the market is moving along two tracks simultaneously. On the one hand, regulators say they will strengthen supervision regardless of whether Congress acts. On the other hand, established financial institutions are embedding blockchain infrastructure deeper into their operations, while corporate treasuries adapt to the reality of holding volatile digital assets. The coming weeks will test whether this dual pressure reshapes the market faster than legislation in Washington.