Why Crypto Acquirers No Longer Want the Token

When Circle announced on December 15, 2025 that it had signed an agreement to acquire Interop Labs—the initial core developers behind Axelar Network—to accelerate the roadmaps for its own multichain infrastructure, Arc and CCTP, the industry split into two camps. One side hailed the move as a pragmatic “acquihire + IP” that strengthens Circle’s cross‑chain stack; the other decried it as another deal where the token is left out in the cold. Circle’s statement made it explicit: the transaction covers the Interop Labs team and proprietary IP; Axelar Network, the Axelar Foundation, and the AXL token remain independent. Soon after, Axelar said another long‑time contributor, Common Prefix, would assume many of Interop Labs’ activities. These specifics matter—and they capture a broader trend in crypto M&A: buyers want the team and the code, but not the token. See Circle’s announcement, Axelar’s follow‑up, and the Arc and CCTP product pages for context. (circle.com)

Market reaction was swift. Headlines noted a double‑digit intraday drop in AXL after it became clear tokenholders would see no direct economic participation in the deal’s upside. Media coverage also amplified the community backlash that often follows “team‑not‑token” transactions. This isn’t an isolated episode—it’s a symptom of how crypto deals are being structured in late‑2025. (cointelegraph.com)

What exactly changed in this deal?

• What Circle is buying: people and proprietary technology from Interop Labs to bolster multichain infrastructure for Arc—Circle’s enterprise‑oriented L1—and CCTP, its native USDC burn‑and‑mint bridging protocol. The assets plug directly into Circle’s product stack and go‑to‑market. (circle.com)
• What Circle is not buying: the Axelar Network, the Axelar Foundation, or the AXL token; those remain community‑run. Development continuity shifts to Common Prefix. This deliberately draws a red line between corporate assets and an open network’s token economy. (circle.com)

That red line is becoming the norm. Here’s why.

Why acquirers increasingly exclude tokens

1. Regulatory uncertainty in the U.S.
   For any public or soon‑to‑be‑public company, taking a network token onto the balance sheet can open a thicket of securities‑law questions. The SEC’s FinHub “Framework for ‘Investment Contract’ Analysis of Digital Assets” still guides how counsel evaluates whether a token looks like a security under Howey—particularly around “reasonable expectation of profits” and reliance on managerial efforts. Even if a token is not a security, the legal burden of proof and disclosure can be substantial. In that environment, acquirers often prefer to buy people and IP rather than assume token‑related liabilities or ambiguities. (sec.gov)

2. Accounting and earnings volatility
   U.S. GAAP now requires many crypto assets to be marked to fair value through earnings for fiscal years beginning after December 15, 2024 (i.e., most calendar companies from January 1, 2025). While this fix solved the old impairment problem, it also makes P&L swings from token holdings more visible each quarter. For acquirers, that volatility can complicate guidance and investor relations, reinforcing the instinct to avoid taking tokens as consideration—or at all. (dart.deloitte.com)

3. Corporate control versus community control
   A token’s on‑chain governance rarely maps cleanly to a buyer’s enterprise governance. Purchasers paying cash for a team expect roadmaps, OKRs, and IP assignment. Token communities expect decentralized decision‑making and public goods. Combining them can create dual accountability without clear value accrual to either side. Boards therefore ring‑fence the token and focus on acquiring assets they can actually direct. The Axelar case—keeping the network and token independent while shifting key dev work to Common Prefix—illustrates this separation. (axelar.network)

4. Reputation and integration risk
   If a buyer sweeps up significant token holdings or assumes perceived influence over a network, critics may claim a “back‑door governance” capture. Post‑deal turbulence around AXL shows how quickly narratives can turn against an acquirer, even if the buyer takes pains to draw boundaries. Minimizing token exposure reduces reputational blast radius and simplifies post‑merger integration. (unchainedcrypto.com)

5. Global policy trends emphasize clarity for intermediaries, not tokenomics
   The EU’s MiCA regime now fully applies, with supervisors publishing registers, timelines, and joint guidelines for management suitability and compliance—including a strong focus on stablecoins and licensed service providers. This clarity benefits firms that issue tokens like e‑money tokens (EMTs) or operate as CASPs; it does not automatically confer value‑accrual mechanics (cash flows, redemption rights) on utility tokens. In other words, regulators are defining the rails and who can run them, not guaranteeing that a network token has corporate‑style rights. (esma.europa.eu)

The Axelar–Interop Labs–Circle structure, decoded

• Arc is positioned as an “Economic OS” L1 with enterprise‑grade features—deterministic finality, stablecoin‑denominated gas, and direct hooks into Circle’s stack. It’s rational for Circle to prioritize assets and teams that accelerate Arc’s time‑to‑market. (docs.arc.network)
• CCTP remains a core primitive for moving USDC natively across chains via burn‑and‑mint, with developer‑friendly SDKs. Folding Interop Labs’ cross‑chain expertise into Circle can strengthen those pipelines. None of that requires AXL integration. (developers.circle.com)
• Axelar continues as an open network with a different mission: generalized cross‑chain messaging/security with its own validator set and token model. The development baton to Common Prefix is intended to preserve that roadmap. Whether tokenholders ultimately feel served will hinge on delivery, not on a corporate M&A outcome. (axelar.network)

What this means for founders, tokenholders, and deal teams

For founders

• Design with exit reality in mind. If your long‑term plan includes optionality for M&A, assume your future buyer will not want your token. Consider how your open‑source repos, patents, and employment/IP agreements can be carved out without breaking the network.
• Be explicit about the token’s purpose. If the token doesn’t convey claims on cash flows, control, or redemption rights, don’t imply otherwise. Lack of value capture is not a flaw if the token’s utility is clear—but ambiguity invites disappointment and, in the U.S., regulatory risk under the SEC’s framework. (sec.gov)

For tokenholders

• Treat protocol tokens as what they are: units of utility and network‑level incentives that may include limited governance, not equity in a dev company. In “team‑not‑token” deals, value can accrue to corporate products (e.g., Arc, CCTP) without necessarily flowing to a separate protocol token. Position size and risk accordingly. Coverage around the Interop Labs/Circle agreement shows how quickly markets price that separation. (cointelegraph.com)

For corporate deal desks

• If token alignment is strategically important, structure it deliberately. Options include a parallel tender for treasury tokens, developer grants with transparent vesting, or post‑closing service agreements with the foundation—each vetted for securities, tax, and accounting consequences. Otherwise, keep M&A clean: buy the people, code, and patents; leave the token to community governance. Use stable regulatory regimes (EU MiCA for EMTs/CASPs) when your business model fits those categories; avoid force‑fitting utility tokens into corporate balance sheets. (finance.ec.europa.eu)

The bigger picture: governance and regulation shape value routes

The market is converging on two rails for value:

• Corporate rails: acquirers integrate teams and IP to ship revenue‑generating products within traditional corporate structures, investor disclosures, and accounting norms (now including fair‑value treatment for crypto assets). (dart.deloitte.com)
• Network rails: open, tokenized systems where value accrues via usage, security budgets, and on‑chain participation. These rails run in parallel, and transactions like Circle–Interop Labs make the boundary visible rather than trying to erase it. (circle.com)

Practical takeaways for users

• Separate your theses. Owning a protocol token is not the same as owning a stake in a developer company, even if the company once stewarded the network.
• Watch for “control without custody.” A buyer may influence a network via hiring, partnerships, or SDK dominance without touching the token. Evaluate how that affects your on‑chain activities.
• Keep your operations portable. If a deal changes your preferred bridge or chain, you should be able to rotate safely.

Self‑custody is essential here. A hardware wallet lets you maintain control across chains, sign governance proposals safely, and move quickly if infrastructure changes. If you need a device designed for multichain operations with a consistent signing experience and strong security practices, OneKey is purpose‑built for that kind of resilience—helpful when corporate M&A and open‑network roadmaps diverge.

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Further reading

• Circle’s acquisition announcement of Interop Labs (deal scope; Arc and CCTP rationale). (circle.com)
• Axelar’s post on continued independence for the network, foundation, and AXL; Common Prefix’s role. (axelar.network)
• CCTP developer docs (how native USDC burn‑and‑mint bridging works). (developers.circle.com)
• Arc documentation (positioning and design). (docs.arc.network)
• SEC FinHub framework for analyzing digital assets under U.S. securities laws. (sec.gov)
• Deloitte DART summary of FASB ASU 2023‑08 (fair‑value accounting for crypto assets, effective 2025). (dart.deloitte.com)
• ESMA’s MiCA resources and joint guidelines with the EBA (EU compliance baselines). (esma.europa.eu)

In the year ahead, expect more deals to look like this: acquire the team and IP, respect the network’s autonomy, leave the token to its community. For practitioners across the stack—builders, users, investors—the right response is to plan for that separation rather than assume it away.