Web3 Weekly — May 10–17, 2026

Coverage window: May 10–17, 2026. The week's signal: legislative and institutional infrastructure is converging faster than the market has priced. The CLARITY Act cleared its biggest Senate hurdle. Circle became the first NASDAQ-listed company to run a token presale. Two major Ethereum Layer 2s shipped network upgrades. And MiCA's July 1 enforcement cliff moved from abstract deadline to live enforcement actions.

Funding

The week's dealflow was dominated by institutional-grade bets on stablecoin infrastructure and blockchain analytics — a marked shift from the speculative gaming tokens that defined earlier cycles.

Circle raised $222 million in a presale of ARC tokens for its new Arc blockchain at a $3 billion fully diluted valuation — the first-ever token presale conducted by a NASDAQ-listed company. 1 a16z crypto led with a $75 million commitment; the broader syndicate included BlackRock, Apollo Funds, Intercontinental Exchange, SBI Group, Janus Henderson Investors, Standard Chartered Ventures, General Catalyst, Marshall Wace, ARK Invest, IDG Capital, Haun Ventures, and Bullish. 2 Arc is designed as a public institutional Layer 1 blockchain using USDC as the native gas token, with sub-second finality, opt-in privacy, EVM compatibility, and quantum resistance at mainnet. CEO Jeremy Allaire described the chain as a move to reduce structural dependence on Ethereum, Solana, and distribution partners like Coinbase.

On the same day Circle disclosed the raise, it reported Q1 2026 results: $694 million in total revenue (+20% YoY), USDC supply of $77 billion (+28%), and $21.5 trillion in on-chain transaction volume (+263%). 1 The pairing of a token presale with an earnings report is unusual; it reflects Circle's attempt to reframe itself not as a stablecoin issuer but as infrastructure.

Digital Asset Holdings — creator of the Canton Network blockchain, used by major financial institutions including Goldman Sachs and Broadridge — is seeking approximately $300 million at a roughly $2 billion valuation, with a16z crypto among the prospective investors. 3 The round has not yet closed as of May 17.

Elliptic — a London-based blockchain analytics firm led by CEO Simone Maini — closed a $120 million Series D at a $670 million post-money valuation on May 12. 4 One Peak led the round; Nasdaq Ventures and Deutsche Bank participated. Elliptic plans to expand AI-powered monitoring and risk analysis tools as stablecoin and tokenized asset volumes grow — and as nearly $3 billion in crypto assets have been stolen since the start of 2025, generating compliance demand from exchanges and banks under AML pressure.

Simone Maini, CEO of Elliptic, at her desk

Image from: CoinDesk

Three other deals rounded out the week:

Fasset — a Shariah-compliant stablecoin-powered neobank processing $32 billion in annualized volume across 125 countries — raised $51 million backed by SBI Group, Investcorp, and Turkey's Arz Portföy. 5
Gemini received a $100 million bitcoin-funded strategic investment from Winklevoss Capital (founded by Tyler and Cameron Winklevoss, who co-founded Gemini). 6 GEMI shares jumped 25% on the announcement, even as Q1 net losses deepened to $109 million on $50.3 million in revenue. Gemini is simultaneously exiting the UK, EU, and Australia markets and launching a CFTC-cleared derivatives business.
Osero — a stablecoin yield infrastructure project incubated by Stablewatch — raised $13.5 million co-led by Sky Ecosystem (the rebranded MakerDAO ecosystem) and Plasma. 7 The project targets the yield gap in the $300B+ stablecoin market, where most returns currently flow to issuers rather than holders.

On the VC side, two major fund closes just before the window set the funding environment: a16z crypto closed its fifth crypto fund at $2.2 billion on May 5, and Haun Ventures — founded by former a16z general partner Katie Haun — closed a $1 billion fund on May 4, focused on crypto infrastructure and AI-agent transaction systems.

Kraken's parent company Payward is pursuing a fresh fundraising round at a $20 billion valuation ahead of a planned IPO; the amount is undisclosed and the round has not yet closed as of May 17. 8

Boundary Labs closed a $2 million pre-seed led by Galaxy Ventures (Galaxy Digital's venture arm) to build USBD, an institutional-grade verifiable stablecoin with daily on-chain reserve audits and institutional-only KYC/KYB onboarding. 9 Danny Slutsky of Galaxy Ventures noted: "Institutional adoption of stablecoins is not only well underway but already proving its value in real-world use cases."

US Regulation

The week's regulatory signal was unusually constructive for the industry — at least on the legislative side.

Senate Banking Committee advances CLARITY Act. The most consequential single event of the week: the Senate Banking Committee voted 15–9 on May 14 to send H.R. 3633, the Digital Asset Market Clarity Act of 2025, to the full Senate floor. 10 Two Democrats — Sen. Ruben Gallego (D-AZ) and Sen. Angela Alsobrooks (D-MD) — crossed the aisle to vote yes. Both conditioned floor support on outstanding ethics provisions being resolved. 11

Chairman Tim Scott (R-SC) called the vote evidence that "Washington can still work together." Sen. Elizabeth Warren (D-MA), the ranking minority member, called the bill "just not ready," arguing it would "blow a hole in our securities laws" and was written "by the crypto industry, for the crypto industry." 12 The 309-page substitute amendment was released May 12; the bill now needs to be merged with the Senate Agriculture Committee's parallel version before a floor vote requiring 60 votes. White House adviser Patrick Witt indicated a viable path to presidential signing around July 4, 2026.

SEC Chair Paul Atkins outlined a four-part onchain rulemaking agenda at the SCSP AI+ Expo on May 8: 13

How the "exchange" definition applies to onchain trading systems, with a notice-and-comment rulemaking path plus a near-term "limited innovation pathway"
How broker and dealer definitions apply to software interfaces (building on the April 13 staff statement)
How "clearing agency" rules fit near-instantaneous onchain settlement with algorithmic counterparty risk management
Treatment of "crypto vaults" — onchain software allowing passive yield — under the Securities Act and Advisers Act

Atkins also called directly for Congress to send the CLARITY Act to President Trump's desk and described regulatory coordination with the CFTC as "not a nicety — it is a necessity."

CFTC Chair Michael Selig confirmed at the FINRA 2026 Annual Conference on May 12 that the two agencies have signed a joint Memorandum of Understanding, launched a harmonization initiative, joined "Project Crypto" together, and advanced a "common-sense crypto asset taxonomy." 14 Joint requests for comment on portfolio margining and swap data reporting are expected soon.

Bittrex — the defunct crypto exchange that paid a $24 million penalty to the SEC in 2023 over unregistered securities allegations — filed a motion in federal court in Seattle during the week of May 10 to vacate the settlement and recover the full $24 million. 15 Bittrex attorneys argued in the filing that the SEC has since "conceded that its legal theory was wrong and those tokens were not securities" and "dropped every similar case and investigation except this one." The SEC also moved in March 2026 to forfeit Bittrex's $24M to the Treasury for victim compensation. The motion puts a spotlight on the legal exposure the SEC's prior enforcement posture has created.

No new SEC crypto enforcement actions or CFTC standalone enforcement cases were filed in the May 10–17 window.

EU MiCA

Europe's crypto regulatory clock is running out — and enforcers are not waiting for July 1 to start moving.

The deadline is set. ESMA confirmed in an April 17 statement (ESMA75-113276571-1679) that the MiCA transitional period expires uniformly across all 27 EU member states on July 1, 2026. 16 After that date, any entity providing crypto-asset services to EU clients without a MiCA CASP license will be in breach of EU law — regardless of whether the member state has implemented MiCA in domestic legislation. Europe had more than 3,000 registered VASPs before MiCA; as of May 2026, only 194 authorized CASPs exist (including credit institutions). Industry analysts estimate roughly 75% of pre-MiCA operators will not make it through licensing. 17

Poland's Sejm passed the Crypto-Asset Market Act on May 15 by a 241–200 vote, aligning the country with MiCA and placing crypto platforms under supervision of the Polish Financial Supervision Authority (KNF — Komisja Nadzoru Finansowego). 18 President Karol Nawrocki — backed by the opposition — has already vetoed two earlier versions of the bill; a third veto remains possible and would leave Poland's domestic firms unable to legally operate at the July 1 deadline. The vote came amid fallout from the collapse of Zondacrypto exchange, with estimated losses of ~$96 million and the founder missing since 2022.

Enforcement is already running. Estonia's Finantsinspektsioon (FSA) issued a public investor warning on May 15 against BB Trade Estonia OÜ (operator of Zondacrypto) for failing to publish a white paper for the TeamPL token under Article 9.1 of MiCA. 19 Italy's CONSOB set a precedent in February 2026 by shutting down Solaxy Tech Ltd for the same violation. Tim Zölitz, CEO of Crypto Risk Metrics, told Compliance Corylated: "We are expecting warnings and enforcement actions to increase, as the degree of white paper compliance is still very low at the moment."

B2C2 — an OTC crypto liquidity provider majority-owned by Japanese financial conglomerate SBI — became the first global OTC liquidity provider to receive a MiCA CASP license, granted by Luxembourg's Commission de Surveillance du Secteur Financier (CSSF — Luxembourg's financial regulator) on May 15. 20 The license enables passporting of OTC spot crypto trading services across all 27 EU member states and three EEA members.

Denmark's FSA rejected CASP applications from Fuse Loyalty and BigeDirect, citing Article 63(10)(d) of MiCA — which requires a CASP's registered office and "place of effective management" to be in the authorizing member state. 21 Both firms had been operating under Denmark's transitional VASP rules and must now cease operations immediately. Jake Green, a partner at Ashurst, noted: "EU regulators will not treat local presence requirements as a box-ticking exercise" — applicant firms should "treat local substance as the foundation of their licensing strategy, not as an afterthought."

L2 Launches & Protocol Upgrades

Ethereum's two busiest upgrade days of 2026 so far both landed in this window.

Ronin Network migration to Ethereum OP Stack Layer 2

Image from: Times of Blockchain

Layer 2 launches

Ronin Network — the gaming-focused blockchain behind Axie Infinity, built by Sky Mavis — completed its migration from an independent Ethereum sidechain to an Ethereum Layer 2 on May 12, hard-forking at block height 55,577,490. 22 23 The migration uses the Optimism OP Stack, with EigenDA for data availability and Ethereum mainnet for finality. RON token annual inflation was cut from approximately 45 million tokens (>20%) to 5 million tokens (<1%) — an 89% reduction. Ronin joins a short list of networks, including Celo, that have transitioned from standalone chain to Ethereum L2 architecture. The motivation was partly security: Ronin suffered a $625 million bridge exploit by Lazarus Group in March 2022, followed by a smaller attack in August 2024.

Base activated Azul on May 13 — its first fully independent network upgrade, decoupled from the Optimism Superchain upgrade cycle. 24 The core feature is a multi-proof system combining Trusted Execution Environment (TEE) proofs and Zero-Knowledge (ZK) proofs via Succinct Labs SP1, cutting ETH withdrawal time from 7 days to as little as 24 hours when both proof types agree. Empty blocks dropped 99% on testnet (from ~200/day to ~2/day), and the network demonstrated 5,000 TPS burst capacity. Base currently holds approximately $15 billion in TVL, representing ~46.6% of all L2 DeFi TVL. Upcoming on the roadmap: an enshrined token standard by end of June, native account abstraction by end of August, and Base Vibenet (a public developer testnet) in mid-May.

GIWA Chain — an Ethereum L2 built on OP Stack by Dunamu (parent company of Upbit, South Korea's largest crypto exchange) in partnership with the Optimism Foundation — launched its testnet this week. 25 It is the first deployment under the OP Enterprise Self-Managed model, with Dunamu controlling the primary sequencer. Mainnet date has not been announced.

Protocol upgrades

Ethereum Glamsterdam — the next major execution-layer scaling upgrade — was confirmed delayed from June to Q3 2026, with the Ethereum Foundation setting a 200 million gas limit as the target floor (roughly 3.3× the current ~60 million). 26 ePBS (enshrined Proposer-Builder Separation, EIP-7732) multi-client devnet is running stably; EIP-8037 gas repricing has been finalized. Separately, the EF named three new co-leads for the Protocol Cluster — Will Corcoran, Kev Wedderburn, and Fredrik — as Tim Beiko and Barnabé Monnot prepare to depart. 27

On May 12, the Ethereum Foundation formally launched Clear Signing under its Trillion Dollar Security Initiative. 28 The standard — built around updated ERC-7730 (descriptor standard with EF-hosted registry), ERC-8176 (attestation framework), and ERC-8213 (bytes-level fallback written by Cyfrin) — addresses blind signing vulnerabilities that enabled the $1.5 billion Bybit cold wallet hack in February 2025, the $50 million Radiant Capital attack, and others. As Cyfrin founder Patrick Collins put it: "The gap between a $1.5 billion exploit and a non-event is often whether the signers could read the bytes in front of them."

Solana put its biggest consensus overhaul in the network's history on a community test cluster on May 11. The upgrade, called Alpenglow, replaces the existing Proof of History mechanism and Tower BFT with Votor (consensus) and Rotor (block propagation), targeting transaction finality of 100–150 milliseconds — compared to approximately 12.8 seconds today. 29 98% of validators voted in support. Mainnet deployment is targeted for Q3 or Q4 2026, developed by Anza. On May 16, CoinDesk confirmed that Firedancer — the second Solana validator client, built by Jump Crypto — is already running quietly on mainnet, using a gradual rollout approach rather than a hard cutover. 30

Finally, the KelpDAO–Aave $292 million exploit recovery — the largest DeFi hack of 2026, widely attributed to North Korea's Lazarus Group, which struck on April 18 — cleared a key milestone this week. The Arbitrum DAO voted on May 10 with near-unanimity (182.2 million ARB tokens) to release 30,765 ETH (~$71 million) frozen by the Arbitrum Security Council after the attack. 31 KelpDAO announced it will replenish 117,132 rsETH to the LayerZero OFT adapter in tranches over two weeks, with rsETH withdrawals, deposits, and bridging resuming after smart contract unpausing. The recovery also triggered structural changes: KelpDAO is migrating cross-chain infrastructure from LayerZero to Chainlink CCIP and increased LayerZero bridge attestors from one to four independent parties.

Cover image from: Base Official Blog — Introducing Base Azul