Categories: Exchange, Issuance, Tokenization Jurisdiction: United States
Summary: On June 30, Ripple Labs (Ripple) CEO stated that Ripple plans to drop the appeal of its landmark case with the SEC, ending the matter after a New York federal judge refused to sign off on a settlement that would have reduced Ripple’s $125 million penalty to $50 million, and lifted an injunction restricting certain XRP token sales. The appeals related to a mixed summary judgement where the court found that sales of XRP tokens to sophisticated investors were unregistered securities transactions, but that secondary sales were not.
Categories: Custody, Issuance, Payments Jurisdiction: United States
Summary: On June 26, the Conference of State Bank Supervisors (CSBS) issued guidance on the treatment of virtual currency when calculating a money-transmitter licensee’s tangible net worth, under the Money Transmission Modernization Act (MTMA). The MTMA is designed to create a consistent set of nationwide standards for tangible net worth (capital) and other requirements applicable to the regulation and supervision of state money transmitters. The advisory guidance is intended to encourage transparency and consistency in implementation of the MTMA. This guidance is the first guidance issued under the MTMA, which according to the guidance has been adopted by 27 States.
Category: Crypto ATM Jurisdiction: United States
Summary: On June 25, the California Department of Financial Protection and Innovation (DFPI) announced that Coinme Inc., a crypto kiosk operator, has agreed to pay $300,000 to resolve findings of alleged non-compliance with the state’s Digital Financial Assets Law (DFAL), marking the first enforcement action under the DFAL. According to the DFPI, Coinme violated the DFAL’s transaction limits and failed to include certain disclosures on receipts, as mandated by law. DFAL was enacted in 2023, and was intended to mitigate risks associated with using digital-asset-transaction kiosks.
Categories: Tokenization, Issuance Jurisdiction: United States
Summary: On June 24, the U.S. Senate Banking Subcommittee on Digital Assets hosted a hearing called “Exploring Bipartisan Legislative Framework for Digital Assets Market Structure.” The panelists urged Congress to pass digital asset legislation soon, and expressed concerns that delays in passing legislation may result in the U.S. ceding authority to legal regimes from other countries. Senators outlined foundational principles, including clear distinctions between digital securities and commodities as well as anti-money laundering safeguards.
Category: Jurisdiction: United States
Summary: On June 24, Judge Seeborg of the Northern District of California denied a motion for a new trial filed by founder and CEO of NAC Foundation Rowland Marcus Andrade. Andrade had previously been convicted at trial of fraud and money laundering related to his allegedly defrauding investors through making false statements about his company’s technology and its business deals.
Categories: Tokenization, Issuance Jurisdiction: United States
Summary: On June 18, the U.S. Department of Justice filed a civil forfeiture complaint in the U.S. District Court for the District of Columbia against more than $225.3 million in cryptocurrency. The complaint alleges that the cryptocurrency addresses holding this crypto were part of a sophisticated blockchain-based money laundering network that executed hundreds of thousands of transactions and was used to conceal the nature, source, control, and ownership of proceeds derived from cryptocurrency investment fraud. According to the complaint, the operators dispersed proceeds across an extensive group of cryptocurrency addresses and accounts on the blockchain to conceal the source of the funds.
Category: Jurisdiction: United States
Summary: On June 18, New York State officials, including the New York Attorney General and Superintendent of the New York State Department of Financial Services announced that a multi-agency, long-term investigation resulted in the disruption of an alleged cryptocurrency investment scam that used social media ads to target Russian-speaking residents of New York and other states. After learning of the investigation, a social media site shut down more than 700 accounts associated with the advertiser promoting the alleged scam, and court orders have led to the seizure of $140,000 worth of cryptocurrency and the freezing of approximately $300,000 worth of cryptocurrency.
Categories: DeFi, Custody, Exchange Jurisdiction: APAC
Summary: On June 17, a South Korean court acquitted Haru Invest CEO Lee Hyung-soon of fraud charges. The Haru CEO faced fraud allegations when the company abruptly closed user withdrawals in June 2023 and shut down its office. During his court trial last year, Lee was stabbed in the neck four times by someone who claimed that he suffered heavy losses due to Hyung-soon’s actions. The final judgment noted that the executives’ actions were in response to financial pressures rather than a result of fraudulent intent.
Categories: Payments, Tokenization, Custody, Issuance Jurisdiction: United States
Summary: On June 17, in a 68-30 vote, the U.S. Senate passed Guiding and Establishing National Innovation for U.S. Stablecoins (Genius) Act. Led by Senator Bill Hagerty (R-TN), the legislation would establish a regulatory framework for stablecoins in the United States. The bill received bipartisan support, with several Democrats joining most Republicans in supporting the bill. The bill now moves to the House, which the President has urged to pass the bill without “delays” or “add-ons.” The House could vote on the Genius Act at the same as the Clarity Act, the House’s crypto market-structure bill.
Category: Jurisdiction: United States
Summary: On June 13, the founder of Gotbit, a crypto-focused hedge fund, was sentenced to 8 months in prison in the District of Massachusetts. He allegedly oversaw a wash-trading scheme, which involved manipulating cryptocurrency markets to create artificial trading volume for multiple cryptocurrency companies.
Categories: Custody, Exchange, DeFi Jurisdiction: United States
Summary: On June 12, the SEC rescinded a slate of 14 rules that the agency proposed under the Biden Administration, including two related to crypto custody and exchanges. One of the relevant rules was Rule 3b-16, which would have expanded the definition of “exchange” to include decentralized finance protocols and tightened crypto custody standards for investment advisers. The SEC also rescinded a proposed custody rule that would have brought digital assets more explicitly under SEC custody requirements.
Category: DeFi Jurisdictions: United States, APAC, Middle East
Summary: On June 9, the U.S. Attorney’s Office for the Central District of California announced that five men from various locations, including California, Turkey, and China, pleaded guilty to an alleged conspiracy to launder more than $36.9 million from victims of an international digital-investment-scam conspiracy that was carried out from centers in Cambodia. As part of the alleged conspiracy, co-conspirators residing overseas would contact U.S. victims directly through electronic means, gain the victims’ trust, and then promote fraudulent digital-asset investments to the victims. Afterwards, individuals like the defendants allegedly laundered the proceeds of these crimes.
Categories: Payments, Tokenization, Issuance Jurisdiction: United States
Summary: On June 9, the DOJ unsealed an indictment charging Iurii Gugnin, with various offenses, including wire and bank fraud, sanctions evasion, operation of an unlicensed money transmitting business, failure to file Suspicious Activity Reports, and money laundering. According to the indictment, Gugnin allegedly used his cryptocurrency company Evita to funnel more than $500 million of overseas payments through U.S. banks and cryptocurrency exchanges while hiding the sources and purposes of those transactions, which include sanctioned Russian entities.
Categories: Tokenization, Payments, Issuance Jurisdictions: United States, APAC
Summary: On June 5, the U.S. Department of Justice filed a civil forfeiture complaint in the District of Columbia seeking to forfeit over $7.74 million in cryptocurrency that was allegedly laundered on behalf of North Korea. The complaint asserts that North Korean information-technology workers unlawfully acquired cryptocurrency by bypassing identity verification and engaging in remote work abroad. The workers were paid for their work in cryptocurrency, and they used money-laundering techniques to try to send the funds back to the North Korean government, before it was seized and frozen by law enforcement authorities.
Categories: Exchange, Payments Jurisdiction: United States
Summary: On June 4, the U.S. Attorney’s Office for the Eastern District of Virginia announced the seizure of approximately 145 darknet and traditional internet domains and cryptocurrency funds associated with the “BidenCash” marketplace. The operators of the BidenCash marketplace allegedly use the platform to allow users to buy and sell stolen credit cards and associated personal information. According to the DOJ, the BidenCash marketplace facilitated the trafficking of over 15 million payment card numbers and personally identifiable information, and generated over $17 million in revenue during its operations.