The global crypto asset regulatory system is undergoing accelerated changes. Which developments should we pay attention to?

Written by: Bulu

Since 2024, many countries around the world have been strengthening theirBlockchainRegulatory enforcement work in the field of digital assets mainly covers combating crimes using digital assets (such as money laundering, fraud, etc.) and industry compliance.

asBlockchainThe United States is a pioneer in the development of digital assets and the market with the largest number of users.BlockchainRegulatory changes for digital assets are affecting the worldBlockchainThe development prospects of digital assets. This article summarizes the important law enforcement cases in the field of blockchain digital assets in the United States since 2024; the important regulatory law-making dynamics in the field of blockchain digital assets in the United States, the European Union and major Asian countries in recent years. Readers can review changes in events and look forward to industry development.

USA

Progress in the formulation of key bills

▶ The U.S. Treasury Department plans to amend the Bank Secrecy Act

According to media reports, the U.S. Treasury Department’s semi-annual regulatory agenda released on August 16, 2024 pointed out that the Federal Reserve Board and the Financial Crimes Enforcement Network plan to amend the definition of "currency" in the Bank Secrecy Act to strengthen financial institutions’ reporting requirements for domestic and cross-border crypto asset transactions and expand the rules to apply to digital assets, central bank digital currencies, etc. If the proposed amendment is approved, it may be released in September 2025.

▶ The U.S. House of Representatives passed the 21st Century Financial Innovation and Technology Act

On July 20, 2023, U.S. Representatives Glenn Thompson, French Hill, Dusty Johnson, Warren Davidson, Tom Emmer and others introduced HR 4763, the 21st Century Financial Innovation and Technology Act. Patrick McHenry, Chairman of the U.S. House Financial Services Committee, is a co-sponsor of the bill.

On May 22, 2024, the U.S. House of Representatives passed the 21st Century Financial Innovation and Technology Act (Financial Innovation and Technology for the 21st Century ActThe FIT21 Act (hereinafter referred to as FIT21 Act) is currently being reviewed by the U.S. Senate. The FIT21 Act establishes a regulatory framework for digital assets, and therefore, the passage of this bill has aroused widespread attention in the blockchain world.

▶ U.S. Congress passes Blockchain Regulatory Certainty Act

On July 26, 2023, the U.S. Congress passed the Blockchain Regulatory Certainty Act (Blockchain Regulatory Certainty Act) jointly proposed by Congressmen Emmer and Soto.Blockchain Regulatory Certainty Act, hereinafter referred to as the BRCA Act).

The BRCA Act defines important terms in the blockchain field, including "digital assets", "blockchain developers", and "blockchain services", and clarifies that the legal status of Cryptocurrency is "any form of intangible personal property that can be exclusively owned by an individual and transferred from person to person without the necessary reliance on an intermediary", providing certainty for the US regulation of blockchain digital assets.

Enforcement Actions (January 2024 to Date)

○ On August 12, 2024, the U.S. Securities and Exchange Commission issued an announcement announcing charges against Cynthia, Eddy Petion and their company NovaTech Ltd., accusing them of raising more than $650 million worth of crypto assets from more than 200,000 investors around the world.Suspected of committing fraudThe SEC also charged Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano and Marsha Hadley with promoting NovaTech to investors.

○ On July 30, 2024, the U.S. Securities and Exchange Commission issued a notice announcing charges against Nader Al-Najib Carried out a multi-million dollar crypto fraud scheme, the fraudulent content included a social media platform called BitClout and the native asset of the same name, BTCLT.

○ On July 1, 2024, the U.S. Securities and Exchange Commission issued an announcement announcing charges against Consensys Software Inc. for a service called MetaMask Staking.Suspected of engaging in unregistered securities offering and sales, and through MetaMask Staking and another service called MetaMask SwapsActing as an unregistered securities broker.

○ On April 24, 2024, the U.S. Securities and Exchange Commission issued an announcement announcing the filing of a lawsuit against Geosyn Mining, LLC, a Texas-based crypto asset mining and custody company, and its co-founders Caleb Ward and Jeremy McNutt.Alleging they participated in an unregistered and fraudulent securities offering.

○ On March 14, 2024, the U.S. Securities and Exchange Commission issued an announcement announcing charges against 17 people for participating inA Ponzi scheme with a fraud scale of $300 millionThe scam involved CryptoFX LLC, headquartered in Houston, Texas, and the fraud mainly targeted more than 40,000 Latino investors in the United States and two other countries. Previously, the U.S. Securities and Exchange Commission launched an enforcement action in September 2022 to stop the CryptoFX scam and filed a lawsuit against its two main executives, Mauricio Chavez and Giorgio Benvenuto.

○ On March 5, 2024, the U.S. Securities and Exchange Commission charged ShapeShift AG with violating the law while operating an online crypto asset trading platform.Acting as an unregistered dealer. ShapeShift agreed to pay a $275,000 fine.

○ On February 7, 2024, the U.S. Securities and Exchange Commission announced a lawsuit against TradeStation Crypto, Inc., headquartered in Plantation, Florida, alleging that the companyFailure to register crypto lending products offered and sold to U.S. investors, TradeStation agreed to pay a $1.5 million fine.

○ On February 2, 2024, the U.S. Securities and Exchange Commission issued an announcement announcing that Brian Sewell and Rockwell Capital Management agreed to settle a fraud allegation. Previously, the U.S. Securities and Exchange Commission had opened an online crypto asset trading course for Brian Sewell.Filing fraud charges, the fraud scheme cost 15 students $1.2 million.

○ On January 29, 2024, the SEC charged Xue Lee (aka Sam Lee) and Brenda Chunga (aka Bitcoin Beautee)Participated in a fraudulent crypto asset pyramid scheme called HyperFund, which raised more than $1.7 billion from investors around the world.

European Union

In May 2023, the European Union issued the world’s first blockchain digital asset regulation: the Crypto Asset Market Regulation (The Markets in Crypto Assets RegulationThe MiCA Regulation came into force in June 2023 and includes a large number of second and third level measures.

According to MiCA regulations, all companies that issue or trade blockchain digital assets need to obtain a license to operate. From January 2026, all blockchain digital asset service providers will need to implement compliance requirements to obtain the names of asset senders and asset beneficiaries. In addition, any self-custodialwalletWhen making a transaction, you need towalletOwnership verification.

On June 30, 2024, the Stable Coins rules in the MiCA regulations came into effect, which restricts Stable Coins to more than 1 million payment transactions per day or a daily transaction volume of more than 200 million euros. Stable Coins issuance service providers need to obtain a license to operate legally in the EU.

learn moreFor more information on the implementation of MiCA, please visit: https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica

Asian Countries

Asia has a large number of blockchain digital asset users and its trading volume leads the world, but the regulatory measures on blockchain digital assets vary greatly among Asian countries.

Japan:Japan is open to blockchain digital asset transactions and allows citizens to own and trade blockchain digital assets. Recently, Japan has strengthened theexchangeRegulations on opening up customer information between banks to address money laundering issues.

South Korea:It has been actively legislating for blockchain digital assets. In 2023, South Korea passed the Virtual Asset User Protection Act, which provides stronger protection for users by increasing record keeping and transparency requirements. The bill officially came into effect on July 19, 2024.

China:A blanket ban on digital assetsexchangeServices, digital asset transactions. On July 19, 2024, the Supreme People's Court and the Supreme People's Procuratorate jointly issued an interpretation on several issues concerning the application of laws in handling criminal money laundering cases, which clearly listed "virtual asset" transactions as one of the methods of money laundering.

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