The Scenius State of Regulation (Issue #21)

Crypto Policy & Regulation: April 2024

United States 🇺🇸, Canada 🇨🇦, & Caribbean 🌎

DOJ Moves 30K BTC Connected To Silk Road Seizure (April 2)

DOJ wallet makes small Coinbase transfer, potentially hinting at an upcoming sale of BTC originally confiscated during the takedown of the Silk Road.

Ontario Superior Court Refuses to Enforce Crypto Giant’s "All-but-inaccessible" Arbitration Clause (April 2)

The decision in Lochan v Binance Holdings Limited serves as a reminder that companies seeking to have disputes determined by way of arbitration must carefully tailor the arbitration agreement to ensure users have a realistic prospect of accessing the arbitration process.

Enforcement News: SEC Files Complaint in Connection with a $300 Million Ponzi Scheme and Affinity Fraud (April 2)

The New York state law firm Freiberger Haber examines an enforcement action brought by the SEC involving a Ponzi scheme that targeted the Latino community.

Litecoin Rises 8% Behind Mobile Upgrades, Regulatory Commodity Acceptance (April 2)

The Commodity Futures Trading Commission’s classification of LTC as a commodity, in the wake of its legal proceedings against KuCoin, has helped to boost investor confidence.

OneCoin Legal Officer Gets 4 Years In Prison For Crypto Scheme (April 3)

The former head of legal and compliance for OneCoin was sentenced to four years in prison and to forfeit more than $111 million for her role in a $4 billion fraudulent cryptocurrency scheme, Manhattan prosecutors announced.

SEC’s Grewal Criticizes Crypto Industry’s ‘Noncompliance’ (April 3)

During the recent SEC Speaks event, SEC Enforcement Director Gurbir Grewal responded to criticism leveled at the agency over excessive SEC crypto regulation.

The SEC Came to Destroy Crypto, Not to Regulate It: Opinion (April 3)

A technology policy consultant claims the SEC is practicing what professor J.W. Verret of George Mason University has called “enforcement by destruction,” trying to turn courts into execution chambers for an industry it never intended to regulate but to destroy.

Google Sues Alleged Scammers Over Fake Crypto Investment Apps (April 4)

Google sued two Chinese nationals in New York federal court, accusing them of misusing its Google Play app store to scam thousands of users through dozens of fake cryptocurrency investment applications.

Coinbase Court Embraces ‘Ecosystem’ Approach to Identifying Crypto-Asset Securities (April 4)

The bulk of the SEC’s case will now proceed to discovery, and time will tell whether the SEC can prove its claims that Coinbase operates an unregistered securities exchange, broker-dealer and clearing agency, and that its staking program effects unregistered offers and sales of securities.

Do Kwon Lost to the SEC. The U.S. Is Piling Up Other Crypto Wins, Too. (April 7)

After a two-week civil trial, a New York jury agreed with the SEC’s claims that Kwon and his firm, Terraform Labs, defrauded investors by misleading them about the stability of TerraUSD.

US Senator Claims Biden Administration Uses Crypto As ‘Scapegoat’ To Mask Failures In Halting Illicit Finance (April 9)

In a pointed critique during a Senate hearing, Senator Tim Scott accused the current US administration of making digital assets the “scapegoat” in efforts to combat terrorism financing, ignoring more significant, more traditional sources of such funding, particularly those benefiting Iran.

DeFi Exchange Uniswap Receives Enforcement Notice From the SEC (April 10)

Uniswap’s CEO Hayden Adams took to X on Wednesday to say that the exchange is “ready to fight” after receiving notice that the regulator is planning an enforcement action.

Top Crypto Exchanges Look to Move Beyond Settlements With U.S. Regulators (April 10)

Compliance chiefs at Binance, Coinbase and Kraken hope lessons taken from these settlements could help improve compliance programs within the wider cryptocurrency industry.

US Senators Gillibrand and Lummis Set to Unveil a New Stablecoin Legislation (April 10)

The Senators are poised to introduce groundbreaking legislation on stablecoins, and its success could herald a new era of financial innovation and stability, aligning with the dynamic needs of the digital economy.

Bankruptcy Courts' Role In Shaping Crypto's Legal Framework (April 11)

The Delaware law firm Morris James LLP lays out how existing crypto regulations have driven novel issues and disputes into the U.S. courts, where the judiciary is forced to bridge the regulatory gap by interpreting old regulations to solve new problems. 

Uniswap vs. the SEC: Crypto Leaders Demand Regulatory Clarity (April 11)

Prominent figures, including Coinbase CEO Brian Armstrong and Haun Ventures CEO Kathryn Haun, have publicly backed Uniswap, expressing criticisms of the SEC’s approach.

Nirvana Hacker Sentenced To 3 Years After Pleading Guilty (April 12)

The DOJ announced the sentencing against Shakeeb Ahmed, the hacker behind the 2022 Nirvana exploit, a flash loan attack, which marks the first time someone has been convicted for hacking a smart contract.

The Crypto Industry Will Only Benefit From Regulation | Opinion (April 13)

The chief revenue officer at Dataspike lays out the case why regulating crypto is the key for mass adoption and investor acceptance.

Senators Demand Detailed Accounting Of CFTC’s Interactions With SBF (April 15)

The formal request aims to shed light on potential regulatory failures following Bankman-Fried's recent 25-year prison sentence.

Crypto and Securities Law: Lessons from SEC v. Coinbase (April 15)

The US law firm Jones & Keller, P.C. discusses how recent SEC enforcement action against Coinbase suggests that transactions involving crypto are securities.

US Senators Reveal New Stablecoin Bill (April 17)

A recent press release revealed the bill was developed jointly with the Federal Reserve and the New York State Department of Financial Services.

US Lawmakers’ Proposed Ban On Algorithmic Stablecoins Draws Industry Backlash (April 18)

Former Blockchain Association member Jake Chervinsky called the Lummis-Gillibrand Payment Stablecoin Act “deeply flawed,” warning that the bill would only permit centralized and custodial stablecoins.

US Regulators Seek Jurisdiction to Prosecute Justin Sun (April 19)

The SEC has intensified its legal stance against the founder of Tron by amending its lawsuit to claim extensive travel and business dealings within the US give it the jurisdiction needed for prosecution.

Casino Operations Company Everi Sued By Rival Digital Wallet Provider (April 22)

A digital payments company has sued casino operations giant Everi for allegedly blocking platforms that give customers alternative, non-cash ways to fund gaming activities.

Two SEC Lawyers Resign After Agency Censured for Abuse of Power in Crypto Case (April 22)

A federal district court judge ruled that the case against a crypto platform known as DEBT Box was marred by false statements and misrepresentations, as well as a lack of evidence.

Crypto Industry Groups Sue In Texas To Challenge SEC's 'Dealer' Rule (April 23)

Two crypto industry trade associations on Tuesday sued the U.S. Securities and Exchange Commission to block a new rule that expanded the regulator's interpretation of what it deems a "dealer" of securities.

Crypto Mixer Samourai Wallet’s Co-founders Arrested for Money Laundering (April 24)

Federal prosecutors allege the platform helped launder more than $100 million of proceeds from dark web markets.

Ripple Counters $2 Billion SEC Fine: Public Backlash Swings Favor Away From SEC (April 24)

The company’s response proposes a civil penalty not exceeding $10 million, as Ripple’s Chief Legal Officer suggested that the case lacks allegations or findings of recklessness or fraud.

US Regulator Seeks $5bn Penalty Against Do Kwon And Terraform Labs (April 24)

The SEC has requested a penalty of just under $4.2bn, alongside an additional $545mn in prejudgment interest, along with $520mn in civil penalties.

US SEC Expected To Deny Spot Ether ETFs Next Month, Industry Sources Say (April 25)

U.S. issuers and other firms expect the SEC to deny their applications to launch exchange-traded funds (ETFs) tied to the price of ether after discouraging meetings with the agency in recent weeks.

Custodia Bank Files Notice Of Appeal In Federal Reserve Case (April 26)

The bank intends to appeal an earlier judgment that denied its entitlement to a Federal Reserve master account, a service that allows access to the central bank’s system without relying on intermediary banks.

Consensys Takes on the SEC: A Legal Battle for the Future of Ethereum (April 26)

Consensys launches a bold legal action against the SEC, challenging Ethereum's classification as a security.

Four Reasons Why Ethereum Is Not a Security: Consensys (April 28)

BeInCrypto outlines four compelling reasons supporting why Ethereum should not be deemed a security.

SEC Has Been Investigating ETH For Over A Year, New Court Filing Shows (April 29)

The SEC in March 2023 launched its formal investigation into ether, lawyers from Consensys allege in new, unredacted complaint.

Phoenix and Wasabi Halt US Operations Amid Regulatory Pressure: Self Custody on Trial? (April 29)

The companies behind both services expressed concerns regarding the legitimacy of self-custody wallet service providers as money services businesses, following recent industry regulatory actions by US authorities.

SEC vs DeFi: The Battle Royale — What Lies Ahead Amid Regulatory Clash And Hack Mayhem? (April 29)

The co-founder at Barter DeFi makes the case that while Uniswap navigates SEC scrutiny, it also reinforces its role as a stabilizing force in the DeFi sector.

New York Woman Gets 18 Years for Funding Terrorism With Cryptocurrency (April 30)

Prosecutors said Victoria Jacobs sent funds to Bitcoin wallets controlled by a terrorist training group that operated in Syria.

Founder of Binance, World’s Largest Crypto Firm, Sentenced to Four Months (April 30)

Billionaire Changpeng Zhao was sentenced to four months in prison, a lighter punishment than requested by prosecutors who hoped to send a message about crime in the industry.

Even as He Faces Prison Time, Binance’s Founder Plans a Comeback (April 30)

Since pleading guilty to violating money-laundering rules, Changpeng Zhao, who ran the giant crypto exchange Binance, has networked across the United States to set up his next act.

Feds Charge ‘Bitcoin Jesus’ With $50 Million Tax Fraud (April 30)

The Justice Department announced it has charged Roger Ver, a well-known figure from the early days of Bitcoin, with mail fraud and filing false tax returns.

Samourai Case: One Founder Released as US Pursues Extradition of the Other (April 30)

Samourai Wallet co-founder released on $1 million bond, faces restrictions on crypto activity, while his co-defendant in Portugal awaits extradition to US on charges of illicit transactions.

McHenry Slams Gensler For Misleading Congress About Ethereum’s Classification (April 30)

House Financial Services Committee Chairman Patrick McHenry has accused SEC Chair Gary Gensler of misleading Congress concerning the classification of Ethereum during his testimony in April 2023.

Middle East & Africa 🌍

Binance Will Discontinue Its Nigerian Naira Services After Government Scrutiny (April 5)

Two Binance executives were recently detained in the country, and the exchange’s CEO Richard Teng, has been summoned to appear before a committee.

How a Crypto Compliance Officer Ended Up in a Nigerian Prison (April 18)

Tigran Gambaryan, an American compliance official for the giant cryptocurrency exchange Binance, flew to Nigeria in February for a planned two-day business trip, and he hasn’t returned.

Nigeria Denies Freezing Over 300 P2P Accounts On More Crypto Exchanges Amid Forex Concerns (April 24)

A recent Central Bank of Nigeria (CBN) circular warned that traders "buying and selling USDT illegally" would be arrested.

South African Cryptocurrency Exchange VALR Targets Global Expansion (April 30)

South Africa's largest cryptocurrency exchange VALR will now offer crypto asset services in Poland and is eyeing other jurisdictions across the globe, in hopes to take on some of world's crypto giants.

Europe 🌍

Landmark UK Bitcoin Freezing Order Had Links To £5bn China Fraud (April 2)

A case known as the first successful bitcoin freezing injunction awarded in the UK courts was brought by a now-convicted money launderer to retrieve funds from a £5bn fraud in China.

UK Regulators Launch Sandbox To Integrate DLT With Financial System (April 3)

The Bank of England (BoE) and the UK Financial Conduct Authority (FCA) have announced the launch of the Digital Securities Sandbox to facilitate the use of distributed ledger technology (DLT) in issuing, trading, and settling financial securities.

Lithuania To Establish Strict Licensing Regime For Crypto Firms By 2025 (April 3)

The move aims to establish robust oversight for the industry as digital assets are increasingly integrated with the financial system.

IMF Pushes Ukraine For Crypto Laws, Officials Discloses (April 6)

The International Monetary Fund has highlighted the economic benefits that regulated crypto could bring to Ukraine as war continues to impact the country.

Crypto Trading Concentration A 'Considerable Concern', EU Watchdog Says (April 10)

The European Securities and Markets Authority noted that the concentration in crypto trading on a handful of exchanges, with Binance alone accounting for about half the market, raises concerns about the impact of a failure on the sector.

Russia’s Central Bank Urges Lawmakers To Hasten Crypto Bill Amid US Sanctions (April 10)

As sanctions bite, Bank of Russia’s Nabiullina calls for faster adoption of crypto laws that would enable international transactions in crypto and digital financial assets.

MiCA’s Impact On The Future Of Crypto Landscape: Expert Take (April 12)

The international law firm Gofaizen & Sherle provides an overview of Europe’s evolving crypto regulatory landscape as it relates to the critical legislative framework the Markets in Crypto-Assets Regulation (MiCA). 

UK To Legislate ‘Whole Host’ Of Crypto Activities Starting In The Summer (April 15)

UK Economic Secretary to the Treasury Bim Afolami said the country is working on legislation for crypto regulations permitting several activities.

Norway to Target Cryptocurrency Mining Through Data Center Regulation (April 16)

Norway has recently announced its intention of enacting a data center-focused law with one of the objectives to crack down on data centers hosting cryptocurrency mining operations.

Maltese Parliament Approves Updates To The VFA Act Ahead of MiCA (April 18)

Updates to Malta’s Virtual Financial Assets Act are the most recent steps taken by the country as it moves towards the standards required of the Markets in Crypto-Assets regulation.

Acquiring or Investing in EU Crypto-Asset Businesses: Further Clarity on MiCA (April 18)

The international law firm Goodwin discusses the first set of final regulatory technical standards (RTS) under MiCA as it relates to the various obligations for crypto-asset service providers (CASPs).

EU's Anti-Money Laundering Bill Passes Final Vote, Here's What's Next For Crypto-Asset Service Providers (April 24)

The European Parliament voted to adopt a package of laws that would in part enhance “due diligence measures and checks on customers’ identity” including so-called crypto asset managers.

Chinese Woman Charged In UK With Criminal Possession Of Crypto (April 24)

Yadi Zhang, also known as Zhimin Qian, is accused of acquiring, using or possessing criminal property, namely cryptocurrency.

Russia Pilots New System For Tracing Crypto-To-Fiat Links (April 25)

The Bank of Russia alongside Rosfinmonitoring, the country’s main body for financial intelligence, is working on a platform to detect connections between fiat operations and crypto transactions amid efforts to evaluate the size of the local crypto market.

British Law Agency Gains Enhanced Crypto Seizure Powers (April 26)

The UK government has enacted enhanced powers for the National Crime Agency and police to seize and freeze crypto used by criminals.

OpenAI Faces Potential Law Breach Amid Its Partnership Discussion with Worldcoin (April 29)

The NOYB – the European Center for Digital Rights has filed a complaint against OpenAI with the Austrian Data Protection Authority (DPA), citing challenges in legal compliance and data accuracy.

Australia 🇦🇺 & Oceania

Australian Legal Clash Over Wallet Provider Evokes Gensler’s Hardline Tactics (April 10)

In the latest action, the Australian Securities and Investments Commission said it would press ahead with its litigation against Finder Wallet.

Queensland’s CCC Aims to Modernize Confiscation Laws to Facilitate “Effective” Seizure of Crypto Assets (April10)

Queensland’s Crime and Corruption Commission (CCC) has identified gaps in state laws that inadvertently encourage criminal use of digital assets, prompting the agency to propose a modernization of Queensland’s asset confiscation laws.

Fiji Central Bank Warns Against Crypto Use, Disappointing Bitcoin Hopes (April 15)

The Fijian prime minister’s reported consultations on introducing Bitcoin into the economy seem to have been in vain.

New Zealand’s Central Bank Starts Consultations On Bluetooth-Friendly CBDC (April 17)

New Zealand’s central bank has started exploration into launching a central bank digital currency, with ongoing investigation projected until approximately 2030.

Latin America 🌍

Chile Stands to Lead Latin America For Crypto Regulation, Even as it Lags in Adoption (April 3)

Chile is working to finalize a new FinTech law that will cover crypto assets and aims to define crypto regulations, making Chile a leader in crypto for Latin America.

In Mexico’s Biggest Election Yet, Crypto Remains on the Sidelines (April 24)

The favorite to win, Mexico City’s former Mayor Claudia Sheinbaum, is expected to remain aligned with her party’s previous position on crypto, one that focuses more on protecting customers than any explicit legislation.

Asia 🌏

MAS Introduces New Crypto Regulations, Including Digital Asset Custody (April 2)

Amendments to Singapore’s laws will implement certain changes for the crypto industry regarding digital asset custody, cross-border payments, and token transfers.

Chinese Fraud Victims Seek Return Of £3bn In Bitcoin Seized In UK (April 11)

A group representing victims of a scam run by Chinese company Tianjin Lantian Gerui Electronic Technology is requesting the foreign ministry in Beijing to launch negotiations with the UK government for recovery of bitcoin.

Hong Kong Digital Assets Exchange Warns Over Viability Of City’s New Crypto Rules (April 12)

The chief executive of one of Hong Kong’s two licensed cryptocurrency exchanges looks overseas as 24 companies vie for regulatory approval.

Cryptocurrency Will Not Be Banned In Việt Nam: Justice Ministry (April 13)

Developing new regulations is one of the key concerns of the Ministry of Justice in Vietnam as it seeks to enable the use of crypto in a manner that avoids the risks of fraud and bad actors.

Thailand to Block Access to 'Unauthorized' Crypto Platforms (April 22)

To cut down on the issue of online crime, Thailand is following the example of countries like India and the Philippines and making a stand against the increased risk of fraud.

Hong Kong Trade Body Advocates For Crypto Self-Regulation Amid Global Scrutiny (April 22)

The Hong Kong Securities and Futures Professionals Association (HKSFPA) has called to establish independent self-regulatory organizations (SRO) dedicated to overseeing the digital assets sector.

Crypto.com Postpones Expansion Into South Korea Retail Market (April 23)

Just six days before its planned retail expansion, the crypto exchange Crypto.com postponed its launch in South Korea so it can communicate further with regulators.

Upbit Rides Korea Crypto Boom to Top-Five Global Exchange Spot (April 24)

In South Korea, speculation has reached such intensity that the won has supplanted the dollar as the most-used currency for swapping in and out of Bitcoin and other tokens.

Ex-Head Of China’s CBDC Reportedly Under Investigation (April 26)

Yao Qian, the former lead developer of China‘s central bank digital currency (CBDC) initiative, is reportedly under investigation for “serious violations of discipline and law.”