Compliance Daily · 2026-11-04. This edition covers compliance news verified for that day from 00:00 to before 00:00 the following day, Beijing time, and will not be changed after finalization.
01Guangxi Fusui Court Dismisses Elderly Persons' Virtual Currency Wealth Management Claim, Holding the Entrusted Wealth Management Contract Invalid for Violating Public Order and Good Morals
The People's Court of Fusui County, Guangxi, concluded a dispute involving elderly persons and virtual currency wealth management. The plaintiffs, a couple surnamed Mo, relied on promotions by an offshore platform of "mining machine wealth management with short-term recovery of principal and long-term dividends" and entrusted others with more than RMB 60,000 of their retirement savings. The platform later shut down and its operators absconded, and the plaintiffs sued the introducer and the person entrusted to operate the account for compensation. The court held that virtual currency does not have the monetary attributes of legal tender or mandatory circulation, that the relevant business activities constitute illegal financial activities, and that the oral entrusted wealth management contract between the parties was invalid for violating public order and good morals. The plaintiffs, after recovering their principal in an initial trial investment, voluntarily increased their investment by a large amount, were aware of the high risk and participated voluntarily, and their losses arose principally from the illegality of the transactions themselves and the platform risk. Pursuant to the Civil Code and the "924 Notice" of the People's Bank of China and other authorities on investors bearing their own virtual currency investment risks, the court dismissed all of the plaintiffs' claims, and the second instance upheld the judgment.
Business Impact
The adjudicative logic established in this case is that an oral entrustment between investors and introducers or account operators concerning offshore virtual currency wealth management is not protected by contract law because the underlying business constitutes illegal financial activity, and investors must bear the losses from the platform's collapse themselves. For individuals and institutions engaged in operating accounts for clients, community promotion, or referral of offshore mining machine wealth management products, this means that even if they did not directly take possession of funds, once they are found to be the entrusted party or the introducing party, they may still face criminal and administrative risks beyond the mere civil compensation issue, in addition to the dismissal of restitution claims following invalidity of the contract.
Key Points to Watch
- Whether an oral entrustment falls within the scope of illegal financial activities
- How the boundaries of liability between the introducer and the account operator are to be distinguished
- The conditions for applying the risk-bearing clause of the "924 Notice"
02Hong Kong SAR Legislative Council Passes Third Reading of the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Revised Common Reporting Standard) Bill 2026
On November 4, the Legislative Council of the Hong Kong Special Administrative Region passed the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026 on third reading. The Bill is intended to enable Hong Kong to implement the Crypto-Asset Reporting Framework and the Common Reporting Standard as most recently amended by the Organisation for Economic Co-operation and Development (OECD). The available materials do not state the commencement date of the Bill, transitional arrangements, or the details of specific reporting obligations.
Business impact
Following the Bill's passage on third reading by the Legislative Council, Hong Kong now has a local legislative basis for implementing the OECD's amended Crypto-Asset Reporting Framework and Common Reporting Standard. Those affected are crypto-asset service providers and related financial institutions that have operations in Hong Kong and are required to make tax reports under the Common Reporting Standard. Because the available materials do not disclose the commencement date or the transitional period, it is not yet possible at this stage to determine when the specific reporting obligations will take effect, and institutions should not adjust their internal processes on the basis that the rules are already in force.
Key points to watch
- Verify the gazettal and commencement dates of the Bill following its passage on third reading
- Confirm the scope of reporting entities under the OECD's amended reporting framework
- Identify the account and asset information required to be reported under the Common Reporting Standard
03Financial Times: Democrats plan in-depth investigation into Trump's cryptocurrency-related business
According to a report by the UK's Financial Times, after the Democratic Party won control of both the Senate and the House of Representatives, Hakeem Jeffries pledged to unveil an agenda within 100 hours of taking office as Speaker of the House on January 3, with priorities including reversing Medicaid cuts, addressing tariffs, and pushing to end the war with Iran. Trump had previously said he would "veto everything." Jamie Raskin and Robert Garcia are expected to head the House Judiciary Committee and the Oversight Committee respectively, and plan to investigate law firms that reached agreements with the Trump administration, Trump's pardons of donors, and his crypto business. Democrats are divided internally over whether to impeach Trump again.
Business impact
The above investigations are currently only proposed arrangements by Democrats after retaking the Senate and House, and have not yet entered formal subpoena or hearing procedures; therefore, for institutions conducting crypto business in the United States, they do not currently create new reporting or compliance obligations. What truly needs to be anticipated is that once the House Oversight Committee and the Judiciary Committee initiate investigations, they may require companies that have funding, cooperation, or service relationships with Trump-related crypto projects to submit internal records and contracts; at that point, disclosure obligations and document retention requirements will be specified according to the scope of the subpoenas. Before then, companies should maintain complete records in accordance with existing securities, anti-money laundering, and political donation disclosure rules, rather than adjusting their business in advance based on expectations of an investigation.
Key points to watch
- Confirm whether you have any funding or service relationship with Trump-related crypto projects
- Check whether political donation and lobbying disclosure records are complete and searchable
04Maximum fine of EUR 10,000 for failure to report; France plans to require reporting of self-hosted crypto wallets valued at over EUR 100,000
On November 3, the French National Assembly passed an amendment to the 2027 finance bill that would require taxpayers to report crypto wallets they hold directly and that are not custodied by crypto asset service providers. Under the amendment, if the value of the crypto assets in the wallet reaches or exceeds EUR 100,000 as of December 31 of the reporting year, the reporting obligation must be fulfilled; the maximum fine for failure to report is EUR 10,000. The amendment is still at the first-reading stage in the National Assembly and has not yet completed the legislative process.
Business impact
If the amendment ultimately takes effect, the obligated parties are taxpayers who directly hold self-hosted wallets, not crypto asset service providers; the trigger condition is that the value of the assets in the wallet reaches EUR 100,000 as of December 31 of the reporting year, and the direct consequence of violation is a maximum fine of EUR 10,000. For natural persons who have tax resident status in France or need to report assets in France, the year-end valuation and holding records of self-hosted wallets will become basic materials that need to be retained for the reporting process, and exchange custody and self-custody are distinguished for reporting purposes. Because it has currently only passed first reading and has not yet created a reporting obligation, it is not appropriate at this stage to adjust custody arrangements or client notification texts on this basis.
Key points to monitor
- Confirm whether one falls within the scope of French tax resident filing obligations
- Verify whether the value of self-custodied wallet assets as of December 31 reaches EUR 100,000
- Track the subsequent legislative process and effective date of the amendment
05The French National Assembly adopted an amendment requiring the filing of self-custodied crypto assets valued at no less than EUR 100,000
On November 4, the French National Assembly adopted an amendment requiring taxpayers to file with the tax authorities self-custodied crypto assets with a total value of at least EUR 100,000. The vote was 150 in favor, 44 against and 8 abstentions, with the value of the assets to be filed determined as of December 31 of the relevant tax year. The filing requirement was incorporated into the 2027 Finance Bill and must be retained in the final legislative text in order to take effect. The National Assembly must complete the first reading of the bill by November 17, and Senate debate is scheduled to begin on November 20.
Business impact
The amendment is currently only at the first-reading stage in the National Assembly and has not yet become an effective obligation, but it targets crypto assets that taxpayers self-custody and that do not pass through centralized platforms. If the final legislation retains this provision, French tax residents holding such assets with a total value reaching EUR 100,000 will face an annual obligation to file proactively with the tax authorities, and failure to file may trigger tax penalties. Although exchanges and custodians are not the filing entities, clients may request records from platforms regarding asset valuation methodology and holdings snapshots as of December 31, so data retention and issuance arrangements need to be operationally workable in advance.
Key points to monitor
- Confirm whether the final text of the 2027 Finance Bill retains this filing provision
- Verify whether the December 31 valuation methodology applies to all self-custodied assets
- Confirm the initial tax year of the filing obligation and the consequences of failure to file
06Virtual currency investment losses are borne by the investor: a Guangxi court dismissed an elderly couple's claim to recover investment funds
The People's Court of Fusui County, Guangxi, concluded a dispute involving elderly persons investing in virtual currency. In 2020, Mr. and Mrs. Mo, both over seventy, were introduced by their friend Liang to a "mining machine wealth management" project on an overseas platform and successively handed over more than RMB 60,000 of their retirement savings to Xie, Liang's associate, to operate on their behalf and purchase virtual currency. In December of the same year, the platform shut down and the funds could not be withdrawn. In early 2026, Mr. and Mrs. Mo sued Liang and Xie, seeking return of the investment funds and interest. The available materials do not state the specific grounds for the court's dismissal of the claims, the date of the ruling, or the case number.
Business impact
In this case, the court did not support the investors' claim against the introducer and the person operating on their behalf for recovery of the principal, indicating that investors who participate in virtual currency wealth management on overseas platforms may find it difficult to obtain judicial relief when seeking return of funds from intermediaries after the platform shuts down. For institutions or individuals that provide services such as operating accounts on behalf of clients or introducing overseas mining machine wealth management, their entrustment or brokerage relationship with the investor does not automatically give rise to an obligation to guarantee principal or compensate on their behalf; however, if there are circumstances such as false advertising, promises of returns, or misappropriation of funds, liability will be determined through other approaches.
Key points to watch
- Verify whether operating on behalf of others or introducing overseas wealth management constitutes an entrustment or brokerage relationship
- Check whether there are written materials promising principal-protected returns or containing false advertising
View this issue's daily report in Global Regulatory Developments
