The Flow Foundation is moving into the second phase of its recovery plan on EVM following a $3.9 million exploit of the blockchain, after dropping an earlier proposal to roll back the network. It reported identifying a path to restore Ethereum Virtual Machine functionality while also raising concerns about a single exchange account that deposited 150 million FLOW, converted much of it to BTC and withdrew over $5 million before the network halt. Trust Wallet separately disclosed a $7 million loss from a Christmas Day exploit of its browser extension, with thousands of addresses affected and thousands of reimbursement claims filed.

Members of the US Senate Banking Committee are expected to hold a markup on the Responsible Financial Innovation Act in the second week of January after months of delays. The House passed a related market structure bill in July, and sources familiar with the effort expect broader consideration in early 2026. Wyoming Senator Cynthia Lummis said on Dec. 19 she will not seek reelection in 2026.

Grayscale Investments has submitted an S-1 registration statement to the US Securities and Exchange Commission to list shares of its Bittensor Trust (TAO) on NYSE Arca under the ticker GTAO. The move would shift its over-the-counter TAO product into an exchange-traded structure following SEC review, while TAO was trading around $222.54 and had recently undergone its first halving toward a 21 million token cap.

After a reported $3.9 million exploit of the Flow blockchain on Saturday, the Flow Foundation abandoned an earlier proposal to roll back the layer-1 chain following community criticism over decentralization and security. In an updated plan shared on Monday, Flow said affected accounts have been temporarily restricted, EVM operations set to read-only, and confirmed there will be no chain reorganization, while warning that full asset recovery remains uncertain.

Gnosis chain operators executed a hard fork on Monday to help recover funds linked to the roughly $116 million Balancer exploit reported in November. The move followed a soft fork adopted by most validators that targeted Balancer-managed contracts on Gnosis Chain, with the project indicating that some assets are now out of the attacker's control and recovery mechanics are still under community discussion.

In a Monday statement, the IMF's mission chief for El Salvador said government officials are in advanced negotiations to sell the state-run Chivo Bitcoin wallet, as part of a broader Bitcoin project under discussion. The sale talks follow a May loan agreement for $1.4 billion, including a $120 million disbursement in 2024 and terms under which the government would stop buying Bitcoin and scale back its role in BTC-related activities.

Arizona state Senator Wendy Rogers has prefiled two bills and one constitutional resolution aiming to exempt virtual currency and blockchain node operators from certain state and local taxes. One bill targets property tax rules for digital assets, another would stop cities and counties from taxing blockchain nodes, and a resolution seeks to adjust the state constitution. The proposed crypto tax changes would require voter approval at the November 2026 general election, while the node-related bill may advance solely through the legislature.

On Monday, White House official David Sacks said the United States is at a critical moment for crypto oversight and called Michael Selig and SEC Chair Paul Atkins a "dream team" to set clear rules. Selig was confirmed by the Senate last week in a 53 to 43 vote to lead the CFTC, with a market structure bill expected to see Senate markup in early January.

On Friday, the U.S. SEC said it obtained final consent judgments against Caroline Ellison, Gary Wang, and Nishad Singh tied to FTX's misuse of funds from 2019 to 2022. Ellison consented to a 10-year officer-and-director bar, Wang and Singh to eight-year bars; all three also face five-year conduct-based injunctions.