Weekly Review: July 22–29, 2026Three Key Assessments This Week
I. “Proof of Source” for AI Training Data Is Becoming a High-Cost Business Liability
This week, the U.S. Federal Court finally approved the $1.5 billion copyright settlement agreement reached between Anthropic and a group of authors. The core of the dispute was not whether Anthropic could use books to train AI, but whether its training data included works obtained through pirated channels.
The signal sent by this case is clear: for AI companies, competition is no longer limited to model capabilities, but also includes competition in data governance capabilities. Companies must not only answer “which data were used by the model,” but also be able to demonstrate where such data were obtained, by what means, and whether they possess the corresponding rights to use them.
Earlier rulings in the same case also drew an important boundary: using legally purchased or authorized works to train AI may leave room for fair use claims; however, if the data themselves originate from piracy, even if ultimately used for model training, this may give rise to independent and substantial legal liability.
Therefore, whether training data are “clean” is no longer a collateral copyright issue, but a business issue that directly affects corporate valuation, financing, litigation costs, and the ability to sustain product operations.
II. Whether AI Can Use Copyright-Protected Works for Training Is Under Simultaneous Judicial Scrutiny in the United States and Europe
With respect to the copyright boundaries of AI training data, the United States and Europe are providing their respective judicial answers.
In the United States, the Federal Court in Boston is hearing Sony Music v. Suno; in Germany, the Munich Court will issue its judgment in GEMA v. Suno on July 31 local time. Both cases point to the same core question: whether AI companies can use copyright-protected musical works or sound recordings to train generative AI models without the permission of rights holders.
Although there are significant differences between the United States and Europe in terms of fair use, copyright exceptions, and rights-holder protection mechanisms, the determinations made by courts in both jurisdictions will have a direct impact on global AI companies’ data procurement, copyright licensing, training records, and business cooperation models.
For enterprises, the primary focus should not be merely on the outcome of any single lawsuit, but rather on a more definitive trend:AI training data is evolving from "data resources handled independently by technical teams" into core factors of production that require legal review, commercial licensing, and continuous record-keeping.
III. U.S. Crypto Asset Regulation Is Shifting from "Enforcement-Driven Boundaries" to "Rulemaking First," Yet Implementation Remains Slow and Uneven
This week, U.S. crypto asset regulation saw two representative developments.
On one hand, regulators failed to finalize stablecoin rules within the timeframe set by the GENIUS Act, meaning that specific compliance standards for stablecoin issuance, reserves, audits, and anti-money laundering remain uncertain. On the other hand, a new draft version of the CLARITY Act was released, attempting to further delineate the regulatory jurisdiction of the SEC and the CFTC over different digital assets; however, the bill has not yet entered the Senate voting stage.
These two developments jointly indicate that the United States is attempting to shift from relying on enforcement actions, litigation, and regulatory settlements to define the boundaries of crypto asset businesses, toward clarifying market access and compliance requirements in advance through legislation and rulemaking. However, this transition will not be completed rapidly, and disparities in pace will persist long-term across different regulatory agencies, asset types, and legislative issues.
For enterprises, the most prudent strategy is not to design business models around spaces that have not yet been explicitly prohibited, but rather, based on publicly disclosed legislative directions and regulatory drafts,to proactively establish systems for reserves, audits, anti-money laundering, client asset management, and information disclosure. While regulatory implementation may be delayed, the compliance responsibilities borne by enterprises will not thereby disappear.
Weekly Global Regulatory Updates
AI Regulation Watch
United States | Record-Breaking Anthropic Settlement Approved
On July 22, a federal court in California granted final approval to the $1.5 billion settlement agreement between Anthropic and authors. Authors may claim approximately $3,000 per book, with over 440,000 books claimed to date. Anthropic is also required to delete pirated files it used. It is important to note that this settlement does not resolve the broader question of whether "AI training constitutes fair use"—related lawsuits against companies such as OpenAI, Meta, and Google are ongoing. For any company engaged in AI development, the practical implication is to maintain clear records and be prepared to demonstrate the source of data at any time.
United States and Europe | Two AI Music Rulings Imminent
The AI music application Suno faces two rulings. In Boston, a U.S. court is hearing Sony Music v. Suno; reportedly, investigators discovered millions of copyrighted sound recordings in Suno’s training data. In Munich, the court will issue its judgment in GEMA v. Suno at 9:00 a.m. local time on July 31. These will be among the earliest judicial answers to the question of “training AI with copyrighted songs”—both cases warrant close attention.
Still in Effect | China’s Rules on AI Companionship and AI “Agents”
As noted earlier this month: China’s rules governing AI companionship applications and AI “agents” (AI capable of taking autonomous actions, rather than merely engaging in chat) came into effect on July 15. Companionship applications must clearly inform users that they are interacting with a machine, incorporate rest and safety reminders, prohibit the provision of “virtual companion” features to minors, and obtain parental consent for users under the age of 14. AI agents used in healthcare, transportation, media, or public security sectors must complete filing and testing, and possess mechanisms enabling them to be halted (recalled) in the event of issues.
Web3 Regulatory Watch
United States | Stablecoin Rulemaking Deadline Missed (GENIUS Act)
The GENIUS Act is the United States’ stablecoin legislation. It afforded regulators one year—until July 18, 2026—to finalize detailed rules. That deadline has passed, yet only draft rules exist, with no final version issued. The basic requirements are already clear: stablecoins must be 100% backed by safe, highly liquid assets, undergo monthly audits, establish anti-money laundering mechanisms, and must not pay interest to holders. However, the precise compliance standards remain unsettled; therefore, issuers should prepare in accordance with the draft rules and stand ready to adjust upon the issuance of the final version.
United States | CLARITY Act Advances—But Remains Only a Bill
A new draft of the CLARITY Act was released on July 22. It would allocate regulatory authority over digital assets between the SEC (for assets with securities characteristics) and the CFTC (for assets with commodities characteristics), and add provisions concerning cryptocurrency ATM fraud, the freezing of suspicious funds, and anti-money laundering. The bill has passed the House of Representatives, but no Senate vote has been scheduled, and a dispute over officials’ ethics rules is impeding its progress. If it fails to pass before the Senate recesses on August 10, it will likely be delayed until 2027. None of these measures are currently law. Additionally, the CFTC took two minor technical actions on July 23–24.
Europe and Hong Kong | Regulatory Frameworks Continue to Tighten
In the European Union, the transitional period under MiCA (the European crypto-asset regulation) ended on July 1—any crypto-asset firm providing services to EU clients must now hold a formal license or cease operations. Also in the EU, the penalty provisions of the AI Act targeting large “general-purpose” AI models will take effect on August 2. In Hong Kong, the stablecoin regime continues to take shape, with the first batch of bank-backed stablecoins expected to launch in the second half of 2026; only licensed issuers, licensed platforms, and authorized banks will be permitted to provide such services.
Global Regulatory Radar – Key Focus This Week
July 22 | United States
Anthropic’s $1.5 Billion Settlement with Authors over Copyright Claims Receives Final Approval
Current Status:Approved
Implications for Businesses:Must be able to demonstrate lawful acquisition of training data and maintain clear records
Around July | United States
Sony Music v. Suno Case — AI Music Ruling (Boston)
Current Status:Ruling Imminent
Implications for Businesses:First Judicial Test in the United States on “Training AI Using Copyrighted Songs”
July 31, 9:00 AM | Munich | EU/Germany
GEMA v. Suno Case — Munich Court Judgment
Current Status:Judgment Imminent
Implications for Businesses:Europe’s first major AI music ruling, impacting data licensing
July 18 | United States
Deadline for Final Stablecoin Rules under the GENIUS Act Missed
Current Status:Missed
Implications for Businesses:Prepare per draft rules: full reserves, audits, AML compliance, no interest payments
July 22 | United States
New Draft of the CLARITY Act Released
Current Status:Bill—Pending Advancement
Implications for Businesses:Proposed delineation of regulatory authority between the SEC and CFTC; still requires Senate vote
July 15 | China
Rules on AI Companions and AI Agents (Effective)
Current Status:Effective
Implications for Businesses:Must disclose non-human nature, protect minors, and file registrations for AI agents
July 1 | European Union
End of the MiCA transitional period
Current status:In force
Implications for businesses:A license is required to serve EU clients; otherwise, services must be discontinued
August 2 | European Union
Penalty provisions under the AI Act targeting large AI models take effect
Current status:Imminent implementation
Implications for businesses:Complete documentation, copyright policies, and risk assessments
Second Half of 2026 | Hong Kong
First batch of bank-backed stablecoins expected to launch
Current Status:Ongoing progress
Implications for Enterprises:Advance assessment required on whether licenses are needed for issuance, trading, and custody
Effective | United States—California/New York
California SB 53 is effective; New York RAISE Act effective from January 1, 2027
Current Status:Effective/Enacted
Implications for Enterprises:Large AI enterprises must disclose safety plans and report incidents
Attorney Fan Chuanli’s Observations
This week’s developments in the AI and Web3 sectors point to a single trend:Technology is entering an “era of rules.”
In recent years, competition in both the AI and crypto industries has centered on technology—larger models, faster products, and more users—as companies sought first-mover advantage through speed. That era has not ended, but its foundation is shifting. The core question is no longer merely “Can we build it?” but rather “Can this product operate legally and sustainably in every market we value over the long term?”
In the AI sector, Anthropic’s $1.5 billion settlement and the impending Suno ruling demonstrate that data, copyright, and recordkeeping are now central business risks, not mere administrative formalities. In the Web3 sector, the missed deadline for the GENIUS Act and the slow progress of the CLARITY Act indicate that the United States is—albeit unevenly—shifting from “rulemaking through litigation” to “ex ante rulemaking.” In both fields, the ultimate winners will be companies that understand the rules in each market and design their products accordingly, rather than those seeking regulatory loopholes.
For technology companies expanding overseas, this marks a new phase.Previously, global expansion often began with market opportunities and business models; going forward, legal structure, licensing pathways, and risk management will be integral to product design from day one.
— Attorney Fan Chuanli
Corporate Compliance Action Items for This Week
AI Companies
Start with data. For each dataset, you must be able to explain its source and whether you have the right to use it—preserve authorizations and records, and refrain from using or delete data whose provenance is questionable. Next, review your products: Do they include AI “agents” capable of taking actions in the real world, anthropomorphic or human-like chatbots, or products targeted at children or sensitive sectors such as healthcare and finance? These products bear the heaviest new compliance obligations (effective in China from July 15 and in the European Union from August 2). Finally, if you sell into the United States or the European Union, prepare the foundational work now—transparency disclosures, user notices, and risk assessments—and schedule adherence to AI safety rules in California and New York.
Web3 / Crypto Companies
Reassess how your business is characterized: the legal nature of tokens, the identity of the issuer, and the jurisdictions in which users are located. If stablecoins are involved, focus on reserves, audits, custody of client funds, and disclosure—even if final rules are delayed, build your framework in accordance with the draft standards of the GENIUS Act. If you serve clients in the European Union, confirm that you hold a MiCA license, as the grace period has ended. If you are considering entering Hong Kong, verify whether licenses are required for issuing, trading, or custodizing stablecoins locally. Most importantly, design a global business structure that you can genuinely operate over the long term, rather than chasing the most permissive jurisdiction at any given moment.
Key Developments to Watch Next Week
AI Sector: The judgment in the GEMA v. Suno case in Munich (July 31) and any developments in the Suno case in the United States; the public comment period on the U.S. Federal Trade Commission’s policy regarding AI-generated output ends on July 31.
Web3 Sector: Any action by the U.S. Senate on the CLARITY Act before its recess on August 10; further signals regarding the delayed stablecoin rules under the GENIUS Act; and the continued advancement of Hong Kong’s stablecoin regulatory regime.
AI Compliance | Web3 Digital Assets | Global Legal Services for Technology Companies Expanding Overseas. This briefing is for general reference only and does not constitute legal advice.
If you are seeking legal governance for artificial intelligence or compliance for Web3 and digital assets, please contact our lawyers.
AI & Web3 Global Regulatory Weekly
Attorney Fan Chuanli's Observation | Cross-Border Compliance Watch for Technology Companies
Week in Review: July 22-29, 2026
Three Key Takeaways This Week
"Where does AI training data come from?" - The price of that question is no longer low
This week, a U.S. federal court gave final approval to the USD 1.5 billion settlement between AI company Anthropic and a group of authors. The authors alleged that Anthropic used pirated books to train its AI systems. This is the largest copyright settlement ever recorded.
In practical terms, the question for an AI company is no longer only how powerful its model is, but whether it can prove that every piece of training data was lawfully obtained. Earlier rulings in the same matter drew a clear line: training AI on books that were purchased or properly licensed will generally be treated differently from training on pirated copies. Whether data is "clean" is now a direct financial issue, not merely a legal footnote.
Whether AI may train on copyrighted works is being decided on both sides of the Atlantic
Two courts are about to address the question of whether AI may be trained on copyrighted music without permission. In the United States, a federal court in Boston is hearing Sony Music v. Suno. In Germany, the Munich court is scheduled to issue its judgment in GEMA v. Suno at 9:00 a.m. local time on July 31. It is the same core question, but under two legal systems. Whatever the outcomes, they will affect how global AI companies purchase, license, and document their training data.
U.S. crypto rules are being built - slowly and unevenly
Two crypto policy developments took place in the United States this week. First, regulators missed a statutory deadline to complete stablecoin rules under the GENIUS Act. Second, lawmakers released a new draft of the CLARITY Act, a bill that would determine which regulator - the SEC or the CFTC - oversees which categories of digital assets, although no Senate vote has been scheduled.
The business takeaway is that the United States is moving from defining rules through enforcement cases toward writing rules in advance, but the process is slow and repeatedly delayed. The prudent approach is to design businesses around the rules that are likely to arrive, rather than building around today's regulatory gaps.
Global Regulatory Developments This Week
AI Regulatory Watch
United States | Record Anthropic settlement receives final approval
On July 22, a federal court in California gave final approval to the USD 1.5 billion settlement between Anthropic and the authors. Authors may claim roughly USD 3,000 per book, and more than 440,000 books have already been claimed. Anthropic must also delete the pirated files it used.
It is important to note that the settlement does not answer the larger question of whether AI training constitutes fair use. Related lawsuits against OpenAI, Meta, Google, and other companies continue. For any company building AI systems, the practical lesson is straightforward: keep clear records and be ready to explain the source of the data.
United States and Europe | Two AI music decisions are approaching
AI music application Suno is facing two expected court decisions. In Boston, a U.S. court is hearing Sony Music v. Suno. According to reports, investigators found millions of copyrighted sound recordings in Suno's training data. In Munich, the court is scheduled to issue its judgment in GEMA v. Suno at 9:00 a.m. local time on July 31. These will be among the first court answers to the question of training AI on copyrighted songs, and both cases deserve close attention.
Still in force | China's AI companion and AI agent rules
As noted earlier this month, China's rules for AI companion applications and AI agents - AI systems that can take autonomous action rather than merely chat - came into force on July 15. Companion applications must clearly inform users that they are speaking with a machine, add rest and safety reminders, prohibit "virtual partner" features for minors, and obtain parental consent for users under the age of 14. AI agents used in healthcare, transportation, media, or public safety must be filed, tested, and built with a mechanism that allows them to be stopped or recalled when problems arise.
Web3 Regulatory Watch
United States | Stablecoin rules miss deadline under the GENIUS Act
The GENIUS Act is the U.S. stablecoin statute. It gave regulators one year - until July 18, 2026 - to complete detailed rules. That deadline has passed, but only drafts exist and no final rules have been issued. The basic requirements are already clear: stablecoins must be 100% backed by safe and highly liquid assets, audited monthly, supported by anti-money laundering controls, and may not pay interest to holders. The precise compliance standards, however, remain unsettled. Issuers should prepare under the draft rules and remain ready to adjust once the final version is released.
United States | The CLARITY Act moves forward - but remains only a bill
A new draft of the CLARITY Act was released on July 22. The bill would divide oversight of digital assets between the SEC, for assets with securities characteristics, and the CFTC, for assets with commodities characteristics. It also adds provisions on crypto ATM fraud, freezing suspicious funds, and anti-money laundering. The bill has passed the House but has not yet been scheduled for a Senate vote, and a dispute over ethics rules for public officials is slowing its progress. If it does not pass before the Senate recess on August 10, it may have to wait until 2027. At this stage, none of these provisions are law. Separately, the CFTC took two smaller technical steps on July 23 and 24.
Europe and Hong Kong | Rulebooks continue to tighten
In the European Union, the transition period under MiCA, Europe's crypto law, ended on July 1. Any crypto company serving EU customers must now hold a formal licence or stop providing services. Also in the EU, penalty provisions under the AI Act for large general-purpose AI models will take effect on August 2. In Hong Kong, the stablecoin regime continues to take shape. The first bank-backed stablecoins are expected to launch in the second half of 2026, and only licensed issuers, licensed platforms, and authorized banks may provide relevant services.
Global Regulatory Radar - Key Items This Week
July 22 | United States
Final approval of Anthropic USD 1.5 billion author copyright settlement
Current status: Approved
What it means for companies: Companies must be able to prove training data was lawfully obtained and keep clear records
Around July | United States
Sony Music v. Suno - AI music decision in Boston
Current status: Decision expected
What it means for companies: First U.S. judicial test of training AI on copyrighted songs
July 31, 9:00 a.m. Munich | EU / Germany
GEMA v. Suno - Munich court judgment
Current status: Judgment imminent
What it means for companies: Major European AI music decision that may affect data licensing
July 18 | United States
GENIUS Act stablecoin final rule deadline missed
Current status: Missed
What it means for companies: Prepare under draft standards: full reserves, audits, AML controls, and no interest payments
July 22 | United States
New draft of the CLARITY Act released
Current status: Bill pending
What it means for companies: Would allocate SEC/CFTC authority; still needs Senate vote
July 15 | China
AI companion and AI agent rules in force
Current status: In force
What it means for companies: Must disclose non-human identity, protect minors, and file AI agents where required
July 1 | EU
MiCA transition period ended
Current status: In force
What it means for companies: Companies serving EU customers must be licensed or stop providing services
August 2 | EU
AI Act penalty provisions for large AI models take effect
Current status: Upcoming
What it means for companies: Complete documentation, copyright policies, and risk assessments
H2 2026 | Hong Kong
First bank-backed stablecoins expected to launch
Current status: Ongoing
What it means for companies: Assess in advance whether issuance, trading, or custody requires a licence
In force | U.S. - California / New York
California SB 53 in force; New York RAISE Act starts January 1, 2027
Current status: In force / enacted
What it means for companies: Large AI companies must publish safety plans and report incidents
Attorney Fan Chuanli's Observation
This week's developments in AI and Web3 point to the same trend: technology is entering an era of rules.
Over the past few years, competition in both AI and crypto has mainly centered on technology - larger models, faster products, and more users. Companies have hoped to gain a first-mover advantage through speed. That era has not ended, but the ground is shifting. The core question is no longer only whether we can build something, but whether the product can operate lawfully and sustainably in every market that matters to us.
In AI, the USD 1.5 billion Anthropic settlement and the coming Suno decisions show that data, copyright, and recordkeeping are now core commercial risks, not administrative paperwork. In Web3, the missed deadline under the GENIUS Act and the slow-moving CLARITY Act show that the United States is moving, unevenly, from "rules by litigation" toward "rules written in advance." In both fields, the eventual winners will be companies that understand the rules of each market and design their products accordingly, rather than companies that search for regulatory gaps.
For technology companies expanding overseas, this marks a new stage. In the past, going global often started with market opportunity and business model. In the future, legal structure, licensing routes, and risk management will become part of product design from day one.
- Attorney Fan Chuanli
Compliance Actions for This Week
AI Companies
Start with data. For every dataset, be able to explain where it came from and whether you have the right to use it. Keep authorization documents and records, and retire or delete data whose source is uncertain. Next, review your products: do any of them include AI agents that can take actions in the real world, anthropomorphic or human-like chatbots, or products directed at children or sensitive sectors such as healthcare and finance? These products carry the heaviest new obligations, in China from July 15 and in the EU from August 2. Finally, if you sell into the United States or the European Union, prepare the basics now, including transparency notices, user disclosures, risk assessments, and a schedule for California and New York AI safety rules.
Web3 / Crypto Companies
Reassess how your business is characterized: the legal nature of the token, who issues it, and where your users are located. If stablecoins are involved, focus on reserves, audits, custody of customer funds, and disclosure. Even if final rules are delayed, build according to the draft standards under the GENIUS Act. If you serve EU customers, confirm that you hold a MiCA licence because the grace period has ended. If you are considering entry into Hong Kong, verify whether issuing, trading, or custody of stablecoins requires a local licence. Most importantly, design a global business architecture that you can genuinely operate over the long term, rather than chasing the most relaxed jurisdiction of the moment.
Next Week's Focus
AI: The Munich judgment in GEMA v. Suno on July 31 and any further developments in the U.S. Suno case; the U.S. FTC consultation period on AI outputs also ends on July 31.
Web3: Any Senate movement on the CLARITY Act before the August 10 recess; further signals on the delayed GENIUS Act stablecoin rules; and continued development of Hong Kong's stablecoin regime.
AI Compliance | Web3 Digital Assets | Legal Services for Technology Companies Going Global. This briefing is for general information only and does not constitute legal advice.
If you are seeking legal governance for artificial intelligence or compliance support for Web3 and digital assets, please contact our lawyers.
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*This article is an original publication of ManKun Law Firm and reflects only the author's personal views. It does not constitute legal advice. For reprints or legal consultation, please contact: mankunlawyer.
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