[███░░░░]: Would you lend money to the person suing you?

Welcome to the TAC's Progress Bar, where we combed through 764 relevant tokenization news stories from the week, analyzed the key stories on our weekly podcast, then distilled what you need to know into a few hundred words in this newsletter. Delivered to your inbox in time for Friday happy hour in NYC (usually).

Probably not, which is exactly why litigation finance exists and why it caught our attention this week. We also got a new CLARITY Act draft worth dissecting, fresh DTCC guidance on tokenized securities registration, and Circle's $222M ARC presale (a first for a public company while still public).

Market KPIs (brought to you by RWA.xyz):
📈 RWA market cap was up 30 basis points WoW to $31.5 billion
🏆 Biggest RWA winner: Figure's HELOC token added $250M to its circulating supply
🏆 Biggest network winner: XRP Ledger added almost $500M

📈 Stablecoin market cap was up 20 basis points WoW to just over $301 billion
🏆 Biggest stablecoin winner: Paxos USDG global dollar added $1.6B
🏆 Biggest network winner: Solana added $1B

📈 Onchain risk free rates:
Short term treasuries (1m): flat at 3.66%
Aave / DeFi: 3.53% (down from 3.9% last week and back to normal)

Stories we're tracking this week

• T-RIZE launched Kairos Digital Loan Notes, tokenizing UK litigation finance on Canton Network, offering investors unprecedented transparency into individual motor insurance claims cases. The $50 million offering distributed through regulated channels includes A-rated insurance guarantees and real-time case tracking onchain.
• Senate Banking Committee released new Clarity Act draft with key changes, dropping decentralization requirements to 49% ownership threshold while tightening token sale caps to $50M annually with $200M lifetime limits. The stablecoin yield ban expanded to cover all exchanges and wallets with carve-outs for rewards programs.
• Circle completed $222M ARC token presale to institutional investors led by A16Z, becoming the first public company to conduct a token presale while trading publicly. BlackRock, Apollo, and Standard Chartered participated, sending Circle stock up 16% on announcement.
• DTCC released guidance defending indirect registration for tokenized securities, arguing centralized clearing provides necessary investor protections and operational efficiency. The guidance pushes back against direct ownership models that enable self-custody and DeFi composability. This is the looming battle: whether the financial system will honor investor privacy and freedom or require investing through intermediaries.
• JPMorgan is entering the tokenized MMF fray with the filing of their OnChain Liquidity-Token Money Market Fund (ticker JLTXX). JLTXX will be Ethereum-based and represent shares in a portfolio of Treasuries and repos, with the product designed to comply with the Genius Act framework. The filing follows a broader race among major asset managers to launch Genius Act-aligned tokenized products as the tokenized asset market has grown over 400% since the start of 2025.
• Tether froze $344M USDT across two Tron wallets linked to Iran's Central Bank in April, acting on OFAC and U.S. law enforcement evidence that the addresses were part of a sanctions-evasion network moving proceeds from illicit oil sales and IRGC/Hezbollah financing channels. The freeze marks a turning point in onchain sanctions enforcement, setting a new compliance benchmark for stablecoin issuers and signaling that state-linked evasion networks can now be identified and immobilized in near real-time.

Tweet of the week

"CLARITY is closer than ever. The bill is strong. It will benefit the American people by making the US financial system faster, cheaper and more accessible. It will also ensure that the US leads in the global race to build the next generation of our financial system."
-- @brian_armstrong (Brian Armstrong)

Litigation as an asset class

Johnny sat down with Madani Boukalba, founder of T-RIZE, to dig into litigation finance, an asset class that most investors have never had a way to access. T-RIZE, launched a product on Canton Network this week distributed through Texture Capital in the US and Black Manta in Europe. I'd never thought about litigation as an asset class until this conversation.

The episode is below and summarized for you here.

Litigation finance is a $9B market in the UK, driven largely by motor finance claims. Between roughly 2007 and 2021, UK banks bundled undisclosed insurance premiums into auto loans, often adding a few extra pounds per month to a customer's payment without their knowledge. In 2021, the FCA ruled the practice illegal, meaning millions of UK consumers are entitled to reclaim what they overpaid, often around £1,000 per loan.

The problem: the reclaim process is administratively brutal. Most consumers won't spend hours navigating bank paperwork to recover £1,000. So a market emerged where specialized law firms pay claimants roughly 50% upfront in exchange for the right to pursue the full claim themselves. A typical case resolves in three to five months, and the top UK firms run portfolios through 35 validation checkpoints before financing them, filtering for the highest-probability wins.

The capital gap is the opportunity. Law firms need funding to make those upfront payments to consumers, and the banks they're suing obviously aren't lending against the activity. That financing need is what fund managers step in to fill, and per the FCA's March 2025 report, UK financial institutions are already reserving against this on their balance sheets because they know reimbursement is largely automatic. It's less about whether the claims pay out and more about operational velocity through the courts.

What makes the asset class interesting from a portfolio construction angle: returns are largely uncorrelated to broader markets, duration is short (months, not years), and the underlying obligor is effectively a reserved liability sitting on a regulated bank's balance sheet. The risk profile looks more like specialty receivables than traditional credit.

Madani's broader point landed well: the asset classes worth paying attention to are the ones that have historically been opaque or inaccessible, where transparency on the underlying cash flows can actually reprice the risk. Tokenized treasuries are a wrapper trade. Things like litigation finance are a different conversation entirely.

Stay ahead of the curve

Be sure to follow us on X, LinkedIn, and Spotify for real-time updates, behind-the-scenes insights, and the occasional hot take that didn't make it into the Progress Bar or the First Trillion podcast episode or summary.

Until next week,

The TAC Team