Weekly Review: July 30 — August 5, 2026Three key judgments this week
For US AI companies: the source of training data is now a core business risk, not a technical detail
US courts are hearing a batch of copyright cases concerning how AI models are trained, and this week a European court reinforced that trend with its judgment — holding that a music appSunomust pay for authorization for the songs used in its training, and must pay at both the training and the generation ends.For any US company developing AI, the message is consistent: if you cannot prove that your training data was lawfully obtained, that is a business risk that may cause real financial loss. Companies that can clearly document their data sources will be better protected than those that cannot.
In China, AI companion and anthropomorphic products have begun to be penalized, and enforcement is moving quickly
China's new rules targeting anthropomorphic and AI companion products took effect on July 15, and regulators did not wait and see: within the first three weeks after implementation, 12 penalty decisions were issued, totaling approximately RMB 4.2 million.Companies were penalized mainly for two things — failing to clearly inform users that their interaction counterpart is a machine, and failing to conduct age verification for users interacting with persuasive AI characters. If you offer such products in China, clear labeling and age verification are now mandatory requirements, and enforcement has already arrived.
US crypto regulation is at a make-or-break moment
《The CLARITY Act— the bill that will ultimately clarify which regulator (the SEC or the CFTC) regulates which type of digital asset in the United States — entered the full Senate vote stage this week.Whether it is passed or shelved before the August recess will reshape the entire landscape of the U.S. crypto industry. For Web3 companies, the prudent course is not to wait and see, but to map out now how their business would operate under both outcomes, so that they are prepared for either.
In addition, this week (see the EU section below): the EU AI Act has been enforceable since August 2 — if you target the EU market, this point matters.
Global Regulatory Developments This Week
AI Regulatory Watch
United States | AI training data is becoming the main legal battleground
For U.S. companies, the most important AI issue remains the set of copyright lawsuits concerning "how models are trained."The cases against OpenAI and other companies are in the discovery phase, and another judgment has already held that an AI legal research tool lost its case for copying a competitor's content. This week a European court reinforced this trend with another judgment, ruling against the Suno music application (see the EU section). The core logic is that "we used everything we could find online to train" is not a safe answer. Any U.S. company developing AI should be able to explain the provenance of its training data, demonstrate that it has the right to use it, and preserve the relevant evidence.
United States | Regulators continue to crack down on AI-enabled fraud
U.S. securities regulators continue to crack down on fraud carried out using AI — including deepfakes, voice cloning and impersonation — with one case involving more than US$14 million defrauded from ordinary investors. For companies operating in compliance, the lesson is this: as AI makes scams more convincing, regulators will require stronger evidence from you that "you really are who you say you are."
United States (state level) | California and New York set AI safety standards
California SB 53 has taken effect, requiring large AI developers to disclose their safety plans and report safety incidents, with fines of up to US$1 million per violation. New York's RAISE Act will take effect on January 1, 2027, and is deliberately aligned with California's approach — so achieving compliance for one jurisdiction will largely cover the other. Regardless of the outcome of the federal debate, these state laws apply as usual.
China | First penalties under the new AI companion rules (early August)
China's new rules for anthropomorphic and AI companion products took effect on July 15, and regulators moved quickly to enforce them—issuing 12 penalties in the first three weeks, totaling approximately RMB 4.2 million. The two points that caught companies out were: failing to clearly indicate that users were conversing with a machine, and failing to verify the age of users interacting with persuasive AI characters. China also treats AI "agents" (systems that can take actions, not merely chat) as a separate category and imposes additional obligations in sensitive fields such as healthcare, transportation and public safety. If you offer these products in China, labeling and age verification are not optional.
EU | Europe's AI rules get serious (August 2)
The EU AI Act has been law for some time, but August 2 is the day its most important rules truly become enforceable. From that date, European regulators can take action against AI systems used in sensitive areas—recruitment, credit and insurance decisions, biometrics, critical infrastructure, education, law enforcement and others. Providers of these "high-risk" systems must establish safety processes, technical documentation and human oversight mechanisms; companies that merely use these systems also bear obligations. Any business presenting AI-generated or synthetic content to EU users must now label it clearly. There had been discussion of delaying some rules, but no delay became law—so August 2, 2026 should be the reference date.
EU / Germany | Court rules: AI training is not "free" (July 31)
A Munich court ruled that the popular AI music app Suno infringed copyright by training on songs from a German music rights organization without authorization, and must pay for licenses at both ends: the songs used for learning and the music generated. This is one of the clearest signals to date that unauthorized training data creates real, cross-border legal risk, and it reinforces the multiple copyright disputes already underway in the United States.
Web3 Regulatory Watch
US | A major test for the crypto "rulebook" (August 3)
The CLARITY Act would draw clear lines between "commodities" (regulated by the CFTC) and "securities" (regulated by the SEC) for various digital assets—something the industry has awaited for years.This week Senate leaders confirmed that the bill will receive a full chamber vote before the August recess, although it still faces a difficult vote threshold to actually pass. Major Wall Street institutions have expressed support. But it is not yet law, so it is best viewed as a time to prepare in advance, not a reason to celebrate.
US | Regulators push to modernize how markets operate
Regulators are moving toward round-the-clock trading and new product types, with the relevant public comment period open until August 26. These are incremental steps, but they show the direction: US markets are being reshaped to accommodate the "never-sleeping" nature of crypto assets.
US (state level) | Countermeasures against prediction markets and fraud
The New York Attorney General urged Congress to strengthen protections against crypto fraud, noting that related complaints have nearly tripled in three years. Meanwhile, courts are considering whether a federal license allows prediction-market platforms to bypass state gambling laws. The takeaway: a federal green light does not always shield you from state-level constraints.
Hong Kong | The high threshold for stablecoins
Hong Kong's stablecoin licensing regime is now in operation, but it is quite strict: of 36 applicants, only two (HSBC and a Standard Chartered-backed joint venture) were approved in the first round. Intended issuers need substantial capital and must back every token 100% with safe, highly liquid assets. If Hong Kong is part of your plans, prepare for a demanding application process.
EU | No license, no crypto business in the EU (MiCA)
The transition period for Europe's crypto rulebook (MiCA) has ended: as of July 1, firms serving EU clients must hold the relevant license or cease operations. Fines can reach up to 12.5% of annual turnover. If the EU is your market, treat licensing as a precondition, not an afterthought.
Global Regulatory Radar | This Week at a Glance
Shadow behavior is newly added this week; the rest are items under continued tracking.
Ongoing | United States (courts)
AI copyright and fair use litigation against OpenAI and other companies
Current status:In progress
What it means for businesses:These cases will establish the basic rules for which training data is permitted. Preserve records of data sources now.
August 3, 2026 | United States
The CLARITY Act (crypto rulebook) proceeds to a Senate vote
Current status:Vote imminent
What it means for businesses:This week will determine who in the United States regulates which types of crypto assets. Prepare for both passage and being shelved.
August 26, 2026 | United States
Comment deadline for the CFTC's proposal on 24/7 trading and perpetual contracts
Current status:Deadline
What it means for businesses:If event contracts are relevant to you, please submit comments before the comment window closes.
July 20–27 | United States (New York/Washington State)
State-level countermeasures against prediction markets and crypto fraud
Current status:In progress
What this means for businesses:A federal license may not shield you from state gambling or consumer protection laws. Assess your exposure state by state.
In effect | United States (California)
SB 53 — Frontier AI Transparency Act
Current status:In effect
What this means for businesses:Large AI developers must disclose safety plans and report incidents. Up to USD 1 million per violation.
January 1, 2027 | United States (New York)
The RAISE Act — New York's Frontier AI Safety Law
Current status:Passed
What it means for businesses:Similar to California's rules; start preparing now, and one build can cover both jurisdictions.
Early August | China
First batch of penalties under China's new AI companion rules (12 penalties, RMB 4.2 million)
Current status:Enforcement has begun
What it means for businesses:If you operate AI companion or anthropomorphic products in China, clearly label and verify user age—regulators are already penalizing these oversights.
July 15, 2026 | China
AI companion and AI agent rules take effect; content labeling standards
Current status:In effect
What it means for businesses:AI must identify itself as non-human, protect minors, and apply explicit and implicit labels to AI-generated content.
2025 / April 2026 | Hong Kong
Stablecoin licensing implemented; first two issuers approved (HSBC, Anchorpoint)
Current status:In effect
What it means for businesses:The threshold is very high—only 2 of 36 passed. Before applying, please confirm the capital and 100% reserve requirements.
August 2, 2026 | European Union
The rules of the European Union's AI Act are formally activated and enforceable
Current status:Now in force
What this means for businesses:If your AI involves recruitment, credit, insurance or biometrics, or is merely directed at the European Union, you must label AI content and prepare complete documentation. Regulators can now penalize you.
July 31, 2026 | European Union / Germany
Munich court rules that Suno's use of songs for training constitutes infringement
Current status:Judgment issued
What this means for businesses:Training AI on unauthorized content may come at a cost—payable at both the training and the generation ends.
July 1, 2026 | European Union
MiCA Transition Period Ends, Penalties Begin
Current status:In force
What it means for businesses:No license, no EU crypto business. Penalties may reach up to 12.5% of annual turnover.
Observations by Lawyer Fan Chuanli
If there is one common thread running through the various changes this week, it is this: technology has entered the "era of rules."
Over the past few years, whether in AI or Web3, competition has mostly revolved around raw capability—larger models, faster products, more users. The goal was to get off the starting line first, and leave the rest for later. That era is drawing to a close. As countries around the world successively complete their respective rule systems, the question facing businesses is shifting from "can we build it" to "can we operate it lawfully and sustainably in every market in which we are present."
In the AI field, regulatory focus is expanding from "what a model can generate" to where the data comes from, how it is governed, how users are protected, and what happens when AI acts autonomously. New types of products such as AI companions and AI agents raise a thornier question: not just what AI "says," but what it "does"—and who bears responsibility when it does so.
In the Web3 field, major markets—the United States, Hong Kong, and the European Union—are all moving from "case-by-case enforcement" toward clear, written frameworks. The winners going forward will not be the businesses that seek out the jurisdictions with the lightest regulation, but those that can operate robustly across borders under real rules.
For companies expanding overseas, this is a new phase. In the past, it was enough to lead with market opportunities and leave legal details for later; today, legal architecture, regulatory pathways and risk management are themselves part of product design. Truly globally competitive companies are not only able to launch products quickly, but also understand the rules of each market and still find room for innovation within the regulatory framework.
— Lawyer Fan Chuanli
This week's corporate compliance action recommendations
If you are an AI company
Classify your products.Determine which AI products are companion-type or anthropomorphic, which involve high-risk decisions (recruitment, credit, healthcare, education), and which are aimed at children or EU users. Your obligations depend on which category you fall into.
Get a clear picture of your data "assets".For each dataset, you must be able to explain its source and demonstrate that you have the right to use it—and retain evidence. After the Suno judgment, this is your most important protection.
Prepare for Europe now.If you sell to the EU, implement content labeling, technical documentation and human oversight today—the rules are already in effect, not "coming soon".
If you operate in China, ensure that companion-type and anthropomorphic AI clearly identify themselves as machines, include safety prompts, and verify user age.Regulators are already penalizing companies that skip these steps.
If you are a Web3 company
Follow the U.S. vote and prepare for both outcomes.Whether the CLARITY Act passes or is shelved this week, your regulatory position will change. Please map out what your tokens and business would look like under both scenarios.
Determine "what" your token is.Classify each token as a commodity, stablecoin, collectible, utility token or security, and be able to explain your reasoning. This determination decides which regulator you are accountable to.
Do not assume a federal license exempts you from state-level constraints.If you operate prediction markets or event contracts, assess your gambling and consumer-protection exposure state by state.
If Hong Kong is on your map, confirm before applying that you can meet the capital and 100% reserve requirements—the approval threshold is high.
Tighten anti-fraud and identity-verification measures.With fraud on the rise and regulators watching closely, sound anti-money-laundering, know-your-customer (KYC) and disclosure practices are now baseline requirements.
Watch next week
AI: progress in enforcement of the EU AI Act after the rules take effect, and the next developments in U.S. AI copyright cases.
Web3: Whether the CLARITY Act can pass the Senate before the August recess—this is the biggest variable in the U.S. crypto sector this year.
This briefing is written in plain language and is provided for general informational purposes only; it does not constitute legal advice. For specific questions concerning AI governance or Web3 compliance, please consult our professional lawyers.
AI & Web3 Global Regulatory Weekly
Cross-Border Compliance Watch for Tech Companies Going Global
Week in Review: July 30 – August 5, 2026
Three Things That Matter This Week
For U.S. AI companies: where your training data comes from is now a core business risk — not a technical detail.
U.S.courts are deep into a wave of copyright cases over how AI models are trained, and this week a court in Europe drove the point home by ruling that the music app Suno must pay to license the songs it trained on — for both the training and the output. The message for any American company building AI is the same: if you can't prove your training data was obtained legally, that's a business risk that can cost real money. Companies that keep clean records of where their data came from will be far better protected than those that don't.
In China, companion and human-like AI is now being fined — and enforcement is moving fast.
China's new rules for human-like and companion AI took effect on July 15, and regulators didn't wait: they issued 12 fines totaling about 4.2 million RMB in the first three weeks.Companies got caught for two things — not making it obvious that users were talking to a machine, and not checking the ages of users interacting with persuasive AI characters. If you offer this kind of product in China, clear labeling and age checks are now mandatory, and enforcement is already here.
U.S. Crypto rules are at a make-or-break moment.
The CLARITY Act — the bill that would finally settle which U.S.regulator (the SEC or the CFTC) oversees which digital assets — reached the Senate floor this week. Whether it passes or stalls before the August break will reshape the entire U.S. Crypto landscape. For Web3 companies, the smart move isn't to wait and see. It's to map out how your business looks under both outcomes, so you're ready either way.
Also this week (see the EU section below): Europe's AI Act became enforceable on August 2 — important if you sell into the EU.
This Week's Global Developments
AI Watch
USA — AI Training Data Is Now a Legal Battleground
The biggest AI story for U.S.companies remains the wave of copyright lawsuits over how models are trained. Cases against OpenAI and others are moving through discovery, and a separate ruling has already gone against an AI legal-research tool for copying a competitor's content. This week a European court reinforced the trend by ruling against the music app Suno (see the EU section). The through-line: “we trained on whatever was available online” is not a safe answer. Any U.S. company building AI should be able to show where its training data came from and that it had the right to use it — and should keep the proof.
USA — Regulators Keep Going After AI-Powered Scams
U.S. securities regulators are continuing to crack down on fraud that uses AI — deepfakes, fake voices and impersonation — including a case involving more than $14 million taken from everyday investors. The takeaway for legitimate businesses: as AI makes scams more convincing, expect regulators to demand stronger proof that you are who you say you are.
USA (States) — California and New York Set the AI Safety Bar
California's SB 53 is already in force, requiring large AI developers to publish safety plans and report incidents, with penalties up to $1 million per violation. New York's RAISE Act follows on January 1, 2027 and is deliberately aligned with California's approach — so if you build for one, you can build for both. These state rules apply regardless of where the federal debate lands.
China — First Fines Under the New AI-Companion Rules (early August)
China's new rules for human-like and companion AI took effect on July 15, and regulators didn't wait long to enforce them — issuing 12 fines totaling about 4.2 million RMB in the first three weeks. The two things that got companies in trouble: not making it obvious that users were talking to a machine, and not checking the ages of users interacting with persuasive AI characters. China also treats AI “agents” (systems that take actions, not just chat) as a distinct category with extra duties in sensitive fields like health, transport and public safety. If you offer these products in China, labeling and age checks are not optional.
EU — Europe's AI Rules Get Real (August 2)
The EU's AI Act has been law for a while, but August 2 is the day its most important rules actually became enforceable. From now on, European regulators can act against AI systems used in sensitive areas — hiring, credit and insurance decisions, biometric identification, critical infrastructure, education, policing and more. Providers of these “high-risk” systems must have safety processes, documentation and human oversight in place; companies that simply use them have duties too. And any business showing AI-generated or synthetic content to EU users must now clearly label it. There's been talk of delaying some of this, but that delay has not become law — so August 2, 2026 is the date to plan around.
EU / Germany — A Court Says AI Training Isn't Free (July 31)
A court in Munich ruled that Suno, a popular AI music app, broke copyright law by training on songs from Germany's music-rights body without permission — and that it has to pay to license both the songs it learned from and the music it produces. This is one of the clearest signals yet that unlicensed training data carries real, cross-border legal exposure, and it reinforces the copyright fights already underway in the U.S.
Web3 Watch
USA — The Crypto Rulebook's Big Test (August 3)
The CLARITY Act would draw a clear line between which digital assets are treated as “commodities” (overseen by the CFTC) and which are “securities” (overseen by the SEC) — something the industry has wanted for years.This week the Senate leader confirmed it will get a floor vote before the August break, though it still faces a tough numbers hurdle to actually pass. Major Wall Street firms have backed it. Nothing is law yet, so treat this as a moment to prepare, not to celebrate.
USA — Regulators Modernize How Markets Run
Regulators are moving toward round-the-clock trading and new product types, with a public comment window open until August 26. These are incremental steps, but they show the direction of travel: U.S. markets are being reshaped to accommodate the always-on nature of crypto.
USA (States) — Pushback on Prediction Markets and Scams
New York's attorney general urged Congress to toughen crypto-scam protections, noting fraud complaints have nearly tripled in three years. Meanwhile, courts are testing whether a federal license lets prediction-market platforms sidestep state gambling laws. The lesson: a federal green light doesn't always protect you from individual states.
Hong Kong — A High Bar for Stablecoins
Hong Kong's stablecoin licensing system is up and running, but it's selective: of 36 companies that applied, only two (HSBC and a Standard Chartered-backed venture) were approved in the first round. Would-be issuers need substantial capital and must back every coin with safe, liquid reserves. If Hong Kong is on your roadmap, budget for a demanding application process.
EU — No License, No EU Crypto Business (MiCA)
Europe's crypto rulebook (MiCA) has finished its transition period: as of July 1, companies serving EU customers must hold a proper license or stop. Penalties can reach up to 12.5% of annual revenue. If the EU is a market for you, treat licensing as a prerequisite, not an afterthought.
Global Regulatory Radar — This Week at a Glance
Shaded rows are new this week. The rest are ongoing items worth tracking.
Ongoing｜USA (Courts)
AI copyright/fair-use suits vs. OpenAI and others
Status：Active
Business impact：These cases will set the ground rules for what training data is allowed. Keep clean records of where your data came from now.
Aug 3, 2026｜USA
The CLARITY Act (crypto rulebook) heads to a Senate vote
Status：Vote imminent
Business impact：This week decides who regulates which crypto assets in the U.S. Plan for both passage and failure.
Aug 26, 2026｜USA
Deadline to comment on CFTC's 24/7 trading & perpetuals plan
Status：Deadline
Business impact：If round-the-clock futures matter to you, speak up before the window closes.
Jul 20–27｜USA (NY/WA)
States push back on prediction markets & crypto scams
Status：Active
Business impact：A federal license may not shield you from state gambling or consumer-protection law. Check state-by-state exposure.
In force｜USA (CA)
SB 53 — frontier-AI transparency law
Status：In force
Business impact：Big AI developers must publish safety plans and report incidents. Up to $1M per violation.
Jan 1, 2027｜USA (NY)
RAISE Act — New York's frontier-AI safety law
Status：Enacted
Business impact：Similar to California's rules; start preparing now so you build once for both.
Early Aug｜China
First fines under China's AI-companion rules (12 fines, RMB 4.2M)
Status：Enforcement started
Business impact：If you run companion or human-like AI in China, label it clearly and check users' ages — regulators are already fining these gaps.
Jul 15, 2026｜China
AI-companion & AI-agent rules in force; content-labeling standard
Status：In force
Business impact：AI must identify itself as non-human, protect minors, and carry visible + hidden labels on AI-made content.
2025 / Apr 2026｜Hong Kong
Stablecoin licensing live; first two issuers approved (HSBC, Anchorpoint)
Status：In force
Business impact：The bar is high — only 2 of 36 applicants passed. Confirm capital and 100% reserve rules before applying.
Aug 2, 2026｜EU
Europe's AI Act rules are now switched on and enforceable
Status：Now in force
Business impact：If your AI touches hiring, lending, insurance or biometrics — or shows up in the EU at all — you must label AI content and have your paperwork ready. Regulators can now fine you.
Jul 31, 2026｜EU / Germany
A Munich court rules Suno broke copyright law by training on songs
Status：Ruling issued
Business impact：Using content you didn't license to train AI can cost you — for both the training and the output.
Jul 1, 2026｜EU
MiCA transition window closed and fines are imposing.
Status：In force
Business impact：No license, no EU crypto business. Fines reach up to 12.5% of yearly revenue.
Joanna Fan's Take
If there's one thread connecting everything this week, it's this: technology has entered the age of rules.
For the past few years, both AI and Web3 competed mostly on raw capability — bigger models, faster products, more users. The goal was to move first and figure out the rest later. That era is closing. As governments around the world finish building their rulebooks, the question companies face is changing from “can we build it?” to “can we run it, legally and for the long term, in every market we're in?”
In AI, oversight is widening from what a model can generate to where its data came from, how it's governed, how it protects users, and what happens when it acts on its own. New products like AI companions and AI agents force a harder question: not just what the AI says, but what it does — and who's responsible when it does it.
In Web3, the major markets — the U.S., Hong Kong, the EU — are all moving from case-by-case enforcement toward clear, written frameworks. Going forward, the winners won't be the ones who find the loosest jurisdiction. They'll be the ones who design a business that can operate cleanly under real rules, across borders.
For companies expanding abroad, this is a new phase. It used to be enough to lead with the market opportunity and sort out the legal details later. Now, legal structure, regulatory path and risk management are part of the product design itself. The companies that will win globally aren't just the ones that ship fast — they're the ones that understand each market's rules and still find room to innovate inside them.
— Joanna Fan, your legal observer
What to Do This Week
If You're an AI Company
Sort your products into buckets.Figure out which of your AI products are companions or human-like, which make high-stakes decisions (hiring, credit, health, education), and which reach children or European users. Your obligations depend on which bucket you're in.
Get your data house in order.Be able to show, for every dataset, where it came from and that you had the right to use it — and keep the proof. After the Suno ruling, this is your single biggest protection.
Prepare for Europe now.If you sell into the EU, put content labels, documentation and human-oversight steps in place today — the rules are live, not coming.
If you operate in China, make sure companion and human-like AI clearly identifies itself as a machine, adds safety reminders, and verifies users' ages.Regulators are already fining companies that skip these steps.
If You're a Web3 Company
Watch the U.S.vote and plan for both outcomes. Whether the CLARITY Act passes or stalls this week changes your regulatory picture. Sketch out how your tokens and business look under each scenario.
Know what your token is.Classify each token as a commodity, stablecoin, collectible, tool or security, and be ready to explain why. That analysis drives which regulator you answer to.
Don't assume a federal license protects you from states.If you run prediction markets or event contracts, check gambling and consumer-protection exposure state by state.
If Hong Kong is on your map, make sure you can meet the capital and 100%-reserve requirements before you apply — the approval bar is high.
Tighten fraud and identity controls.With scams rising and regulators watching, strong anti-money-laundering, know-your-customer and disclosure practices are now table stakes.
Next Week to Watch
AI: The outcome of any EU AI Act enforcement moves now that the rules are live, and the next steps in the U.S.AI copyright cases.
Web3: Whether the CLARITY Act clears the Senate before the August recess — the single biggest swing factor for U.S.crypto this year.
This briefing is written in plain language for general understanding and does not constitute legal advice. For AI governance or Web3 compliance questions, please consult with our qualified lawyers.
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*This article is an original work of Mankun Law Firm and represents only the personal views of the author. It does not constitute legal consultation or legal advice on any specific matter. For reprinting and legal consultation, please add our customer service:mankunlawyer
