Crypto Weekly Market Wrap February 16: Crypto Market Shifts, Legal Challenges, and Institutional Developments

The crypto market was shaken once again as Bitcoin fluctuated due to exchange issues and the growing political pressure. As investors were rocked by uncertainty and global tensions, institutions quietly amassed assets. Regardless, regulatory changes and infrastructure advancements continued, indicating that the crypto progress is active amidst the instability. In the section below, we will discuss key developments that made headlines last week.

Sam Bankman-Fried’s Claims About FTX Collapse

The founder of FTX, Sam Bankman-Fried, issued new claims regarding the failure of his cryptocurrency exchange. In a fresh statement dated 20th January 2023, he pointed out that he did not approve the Chapter 11 bankruptcy filing in November 2022. Bankman-Fried claimed that the company was controlled by outside legal advisors who forced the filing against his will. He insisted that the filing was sudden and unwarranted, which hurt the company’s recovery efforts.

He also said that FTX was not insolvent by the time of the bankruptcy. Bankman-Fried insisted that internal audits of the company’s wallets revealed that the assets were more than the liabilities. He also attributed the filing to worsening the liquidity situation FTX was experiencing, even though it had strong assets.

SafeMoon CEO Sentenced for Fraud Scheme

Former CEO of SafeMoon, Braden John Karony, was sentenced to eight years in prison for securities fraud, wire fraud, and money laundering charges. Prosecutors associated him with a scam that deceived investors regarding SafeMoon’s transaction tax. They asserted that Karony and his co-conspirators diverted millions of dollars in cryptocurrency for personal gains. Karony was directed to surrender two residential properties and assets worth $7.5 million.

SafeMoon CEO gets 100 months in prison for multi-million-dollar crypto fraud. Ordered to forfeit $7.5M after defrauding investors.https://t.co/TPuizDabFn

This case was investigated by #IRSCI NY Field Office, @NewYorkFBI, @HSINewYork, & @SECGov.#FollowTheMoney #WhatWeDoCounts pic.twitter.com/wi1Yb58NA3

— IRS Criminal Investigation (@IRS_CI) February 10, 2026

In addition, the case focused on false statements by SafeMoon, where the company implied that its 10% transaction tax would finance locked liquidity pools and reward token holders. The tax, however, was directed instead to the conspirators.

Strategy Expands with Preferred Stock for Crypto Purchases

Strategy diversified its preferred stock to finance cryptocurrency acquisitions and reduce its exposure to market fluctuations. CEO Phong Le announced that the firm is offering perpetual preferred shares called Stretch, aiming to attract investors seeking exposure to the digital world without facing severe volatility in prices. This new product offers an alternative financing mechanism, paying out a variable dividend, adjusted monthly, to the company as it continues accumulating Bitcoin. The firm also bought another 1,142 Bitcoin, which amounted to $90 million last week despite the market uncertainty.

FCA Takes Legal Action Against HTX

The UK Financial Conduct Authority (FCA) filed lawsuits against a crypto exchange, HTX, due to unauthorized crypto promotions. HTX was accused of advertising its services to UK consumers without authorization, breaching financial promotion regulations, which came into force in October 2023.

Despite several warnings, HTX has been advertising its services on several social media platforms, including TikTok and Facebook. As part of the legal proceedings, the FCA has asked social media companies to block the accounts of HTX in the UK and app stores to remove the exchange applications.

China Issues Guidelines for Reducing U.S. Treasury Holdings

The government regulators of China encouraged the major commercial banks in the country to limit their buying of U.S. Treasury bonds. The move seeks to minimize volatility and market risks in terms of concentration. The guidance is directed at commercial banks, and it does not apply to the sovereign foreign exchange reserves of China.

Although the move is being positioned as a risk management initiative, it has given rise to speculation on long-term strategies of China on its financial holdings. The move is also not related to the fear of the creditworthiness of the U.S. or to geopolitical tensions. Instead, it is a bid to diversify the financial risks.

LSEG to Launch Blockchain Settlement System for Institutions

The London Stock Exchange Group plans to roll out an on-chain settlement system for institutional investors. The system, called LSEG Digital Securities Depository (DSD), will enable trading and settlement of tokenized bonds, equities, and private market assets. The new venture aims to close the gap between traditional financial markets and blockchain networks.

Moreover, the new platform of LSEG will be multi-chain compatible, facilitating interoperability with the existing settlement systems. The initial rollout step is planned for 2026, subject to regulatory approval.

BitMine Continues Ethereum Accumulation Despite Losses

BitMine increased its Ethereum holdings despite huge unrealized losses. The firm acquired 40,613 Ethereum last week, worth about $83.2 million. This move results in BitMine owning 4.3 million ETH in total, which is approximately 3.58% of the total supply of Ethereum. Chairman Tom Lee stressed that BitMine views the current market conditions as an opportunity to strengthen its status in Ethereum.

Bithumb Attempts to Recover Funds After Bitcoin Payout Error

Bithumb is working to retrieve a large portion of bitcoin that was accidentally given away during a promotional exercise. The mistake resulted in the administration of 620,000 BTC, significantly higher than the intended compensation of approximately 620,000 KRW. Despite Bithumb recovering the majority of the funds, approximately 125 BTC, worth $12.3 million, have not been returned yet.

The exchange has instead chosen to use a voluntary process of returns and has engaged recipients individually to retrieve the lost funds. Legal action, even freezing of assets, remains an option in case the situation fails to improve.

Goldman Sachs Expands Crypto Exposure Through ETFs

Goldman Sachs disclosed its crypto exposure in a series of spot crypto exchange-traded funds (ETFs). The bank has significant assets in Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL), amounting to approximately $1.1 billion. The announcement marked a substantial increase in Goldman activity in the digital asset space, via crypto ETFs instead of actual ownership of tokens.

Robinhood Unveils New Blockchain Focused on Tokenized Assets

Crypto exchange Robinhood released a new layer 2 blockchain called the Robinhood Chain, focusing on tokenizing real-world assets (RWAs). Robinhood Chain, which is based on Ethereum-compatible technology, Arbitrum, will allow issuing and trading tokenized assets without intermediaries. Meanwhile, the testnet is live, and the developers are invited to test and validate financial applications on the new blockchain.

Robinhood has launched "Robinhood Chain," a Layer 2 blockchain built on Arbitrum technology and compatible with Ethereum, designed specifically for financial services and tokenized real-world assets (RWA). The testnet is now live for developers to test and validate financial…

— Wu Blockchain (@WuBlockchain) February 11, 2026

Trump Family Crypto Project to Launch Foreign Exchange Platform

Trump World Liberty Financial plans to roll out a foreign exchange platform called World Swap. The platform will enable cross-border transfers of stablecoins, offering a cheaper alternative to traditional remittance services. The platform also seeks to challenge the expensive rates imposed by money transfer services, whose transaction fees are 2 to 10%.

Japan’s Nomura and Daiwa Securities to Promote Stablecoin-Based Trading

Nomura Holdings and Daiwa Securities Group of Japan collaborated with three major megabanks in the country to facilitate securities trading using stablecoins. The project is expected to allow real-time, 24/7 securities settlement on the blockchain. Moreover, the pilot project for the stablecoin trading platform is likely to become operational already this month. The project aims to expand the usage of digital assets in traditional financial markets, providing an alternative for institutional investors to settle trades.

Malaysian Police Arrested for Crypto Extortion Scheme

In Malaysia, seven police officers were arrested for engaging in an armed robbery and extortion scheme against Chinese tourists. In collaboration with five accomplices, the officers compelled the victims to transfer 200,000 Malaysian ringgit in cryptocurrency. Moreover, the case is being investigated as a gang-armed robbery, with the police authority attempting to recover the stolen money.

Thailand Approves Digital Asset Collateral for Derivatives

Thailand’s cabinet approved amendments to the Derivatives Act, allowing the use of digital assets as security in regulated derivatives markets. The move will facilitate more inclusive market development and enhance risk management for investors. The SEC will come up with new regulations to incorporate digital assets into the derivative market.

BREAKING: Thailand’s SEC approves digital assets like Bitcoin to be used as underlying assets in regulated derivatives markets.

This means licensed exchanges can now structure crypto-linked derivative products under official regulatory oversight — a major step toward… pic.twitter.com/y8uKELXffK

— Meow Alert (@MeowAlertBNB) February 12, 2026

This regulatory change is projected to increase the uptake of cryptocurrencies and digital assets in traditional financial products. Furthermore, it provides new market participants, such as crypto-related contracts and derivative products, increasing the number of investment options available to a larger group of investors.

South Korea Targets Crypto Market Manipulation in 2026 Plan

South Korea’s Financial Supervisory Service (FSS) announced its 2026 project to examine the manipulation of the market in the virtual asset market. The plan targets high-risk areas like manipulation of whales, spread of false information through social media, and API-order manipulation. Furthermore, the FSS is expected to implement AI to identify abnormal price changes in digital assets.

MoonPay Enables Stablecoin Payroll in UK and EU

MoonPay collaborated with a payroll platform, Deel, to allow companies across the UK and EU to pay their employees in stablecoins. The partnership will enable companies to execute global payouts through digital assets directly into the employees’ wallets. The service also seeks to eliminate the complexity and cost of traditional payroll systems.

Interactive Brokers Offers Nano Bitcoin and Ether Futures

Interactive Brokers introduced Bitcoin and Ether nano-futures on its platform. These new contracts, which constitute smaller details of cryptocurrencies, enable traders to enter the crypto derivatives market with less capital investment. The nano futures contracts enable traders to access Bitcoin and Ether with smaller positions, as well as offer them more flexibility in managing the risk.

Blockchain.com Secures FCA Registration for UK Operations

The UK’s Financial Conduct Authority (FCA) registered Blockchain.com to conduct business as a crypto asset business. This license enables the company to provide brokerage, custodial, and institutional-grade services in the UK. Moreover, it was granted following the previous authorization of Blockchain.com under the Markets in Crypto-Assets (MiCA) regulation, which allows the company to operate throughout the European Economic Area.

News: https://t.co/UUeTJvaqQB has secured FCA approval to offer regulated crypto services in the UK. pic.twitter.com/LZXAj37EcN

— Crypto Coin Show (@CryptoCoinShow) February 11, 2026

The company seeks to work with the regulators in the UK to influence the future of the crypto industry standards. In addition, Blockchain.com is aiming to achieve full authorization under the new UK regulatory framework, which will come into effect in 2027.

Binance Finalizes $1 Billion SAFU Fund Conversion to Bitcoin

Binance completed converting its Secure Asset Fund for Users (SAFU) into Bitcoin. This conversion, worth $1 billion, was completed after Binance acquired 4,545 BTC. This move, initially announced in January, will serve to further bolster the reserves of Binance and its belief in Bitcoin as a long-term store of value.

The SAFU fund was originally created to cover users against an exchange hack or security breach. By converting the entire fund into Bitcoin, Binance has made a bold statement against its usage of cryptocurrency as a primary reserve asset.

Ripple Partners with Aviva Investors to Tokenize Funds on XRP Ledger

Ripple collaborated with Aviva Investors to explore tokenized funds on the XRP Ledger. The partnership is the first foray by Ripple into the European investment management market. Aviva Investors plans to issue and operate tokenized funds on the XRP Ledger, which would offer efficiencies in the investment sector.

Furthermore, the concept of tokenization is gaining popularity, and financial institutions are seeking to digitalize traditional assets. Ripple’s XRP Ledger, designed for fast and secure transactions, is positioned as a blockchain solution to support these new financial innovations. 

Brazil Proposes National Bitcoin Reserve Plan

Brazil reintroduced a bill aimed at creating a national Bitcoin reserve. The proposal seeks to acquire 1 million BTC over the next five years as part of a broader strategy to diversify Brazil’s sovereign assets. By accumulating Bitcoin, lawmakers hope to hedge against inflation and protect Brazil’s finances from external risks, including currency devaluation. If passed, Brazil would become one of the largest holders of Bitcoin globally.

Digital Asset Investment Products Market Overview

According to the latest CoinShares report, digital asset outflows extended to the fourth week, reaching $173 million. Withdrawals reached $3.74 billion over the last month. The sentiment dropped sharply, despite initial optimism, owing to market weakness. The inflows of $575 million during the week were outweighed by the outflows of 853 million, despite the minor relief on Friday following the disappointing CPI data.

Digital asset outflows extend to 4th week amid US weakness, totalling US$173m. Bitcoin saw the weakest sentiment, with US$133m in outflows. Ethereum saw US$85.1m in outflows. XRP, Solana and Chainlink, which saw inflows of US$33.4m, US$31m and US$1.1m respectively.…

— Wu Blockchain (@WuBlockchain) February 16, 2026

Moreover, regional divergences painted a mixed picture. The US saw $403 million in outflows, while Europe and Canada recorded $230 million in inflows. Germany led the way with $115 million. Bitcoin and Ethereum experienced the highest outflows, with $133 million and $85.1 million, respectively. In contrast, XRP, Solana, and Chainlink showed resilience, attracting inflows of $33.4 million, $31 million, and $1.1 million.

Bitcoin Price Performance

Bitcoin experienced another volatile week, dropping from highs of $71K to $65K to record a decline of 1.50%. The price is currently hovering around the $68K region, with the bears having the upper hand at the moment. Meanwhile, the market capitalization and trading volume have dropped to $1.37 trillion and $35 billion, respectively.

Looking at the weekly chart, BTC has bounced off from the key support around the $64K region, indicating a price reversal. The immediate resistance has been noted at the $91K region, while the key resistance remains at the $118K mark.

Indicators such as the 14-day Relative Strength Index (RSI) have dropped into the oversold region at 28 levels. Should the current trend hold further, BTC could drop further below the current support, leading to a steep decline.