Weekly Legal Brief on AI and Web3 | June 24–July 1, 2026

⚡ Week in Review: June 24 – July 1, 2026

I. Key Developments and New Regulations This Week

This week saw a dense cluster of developments: the U.S. Supreme Court issued a structural ruling on regulatory agency independence, two hard compliance deadlines took effect on July 1 (the EU’s Markets in Crypto-Assets Regulation (MiCA) and California’s crypto licensing regime), and Hong Kong and the United Kingdom also introduced new frameworks for digital assets. Part I covers only those developments that actually occurred between June 24 and July 1, 2026; all recurring deadlines, pending measures, and previously reported litigation are summarized in the table in Part II.

U.S. Federal — Regulators and Courts

Supreme Court Overrules Humphrey’s Executor Precedent; SEC and CFTC Commissioners Lose Removal Protections (June 29)

In Trump v. Slaughter, the U.S. Supreme Court held, in a 6–3 majority opinion authored by Chief Justice Roberts, that statutory restrictions limiting the removal of commissioners of multi-member agencies to “for cause” scenarios are unconstitutional, thereby overruling the 91-year-old precedent set in Humphrey’s Executor. The same reasoning extends to the two primary regulators in the crypto space: commissioners of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) may now be removed by the President at will. A companion 5–4 decision (Trump v. Cook) preserved the independence of the Federal Reserve. It is anticipated that the enforcement stances of the SEC and CFTC in the crypto and artificial intelligence sectors will become more rapid and more susceptible to political influence, while ongoing rulemaking processes will enjoy diminished protection. Any strategies predicated on the assumption that the current regulatory stance will remain unchanged should be reevaluated.

United States — California

Digital Financial Assets Law (DFAL) Takes Effect—Crypto Licensing Becomes Mandatory (July 1)

California’s Digital Financial Assets Law (DFAL) took effect on July 1: exchanges, custodians,stablecoinissuers, and Bitcoin ATM operators providing services to California residents are now required to hold DFPI A license or a complete NMLS application must be in place; otherwise, civil penalties of up to USD 100,000 per day may be imposed. Indicative thresholds include USD 100,000 in tangible net worth and USD 500,000 in surety bonds, subject to adjustment based on risk profile. Enterprises must also conduct due diligence on assets before making them available to California residents.

United States — State-Level (AI)

Multiple state-level AI laws took effect on July 1.

A batch of state-level AI regulations took effect on July 1—for example, Idaho’s law on generative AI in public education, and laws incorporating synthetic media into the definition of “video voyeurism.” The overall trend is an increasing number of sector-specific AI rules across states taking effect on the fixed date of July 1; clients should review compliance exposure on a state-by-state basis. (See the summary table for details on pending measures such as Illinois SB 315 and New York’s RAISE Act.)

European Union — Web3

MiCA transition period ends—the deadline has officially arrived (July 1).

MiCA became fully applicable across the European Union on July 1. Entities still operating under national transitional mechanisms must now obtain authorization or exit the market. Of approximately 3,000 pre-MiCA virtual asset service providers (VASPs), only about 230 have registered with ESMA; up to 10 million users may need to switch platforms, and proposed fines for non-compliant major stablecoin issuers could reach 12.5% of annual turnover. Developments this week: Binance withdrew its license application in Greece, Coinbase designated Luxembourg as its home Member State, several platforms delisted USDT, while USDC remained listed.

Hong Kong — Web3

Release of the Policy Statement on Development of Virtual Assets 2.0 / LEAP Framework; SFC launches consultation on dealers and custodians (June 26–27).

On June 26, the Hong Kong Government released the Policy Statement on Development of Virtual Assets 2.0, centered on the “LEAP” framework (streamlining laws and regulations, expanding tokenized products, advancing application scenarios, and developing talent and partnerships), aiming to establish a comprehensive and unified regulatory regime covering exchanges, stablecoin issuers, dealers, and custodians. On June 27, the Securities and Futures Commission (SFC) launched a consultation to bring virtual asset trading dealers and custodians within the regulatory scope. The licensing regime for stablecoin issuers, implemented by the Hong Kong Monetary Authority (effective from August 1, 2025), continues to advance, with an expected launch in the second half of 2026.

United Kingdom — Web3 (Cross-Border)

FCA publishes final rules on crypto assets (June 30).

The UK Financial Conduct Authority (FCA) has issued final rules and guidance for crypto assets firms, establishing authorization and conduct standards for firms authorized to operate under the Financial Services and Markets Act (FSMA). This is particularly relevant for multi-jurisdictional digital asset clients concurrently conducting business under the EU’s Markets in Crypto-Assets Regulation (MiCA) and holding Hong Kong licenses.

II. Summary Table — Ongoing and New Developments

Items marked “NEW” represent developments occurring between June 24 and July 1, 2026; items marked “Ongoing” were previously reported and are retained here for tracking purposes. Deadlines are indicated by date.

III. Compliance Action Recommendations

Actions Currently Required for AI Enterprises

• China — July 15 (approximately 14 days): Conduct a gap analysis against the Interim Measures for Anthropomorphic Interaction Services in Artificial Intelligence—covering AI pop-up notifications, two-hour rest reminders, dependency detection, and the prohibition of companionship features directed at minors. There is no transition period. Verify that filings with the Cyberspace Administration of China (CAC) and public reporting channels are operational.

• European Union — August 2 (no changes to the Omnibus Act): Continue to advance GPAI documentation, capability assessments, and systemic risk assessments on schedule, and consider signing the Code of Conduct; note the ongoing promotion of Article 5’s NCII/CSAM ban within the Omnibus Act.

• United States — Regulatory Landscape (New): In light of Trump v. Slaughter, which allows for the at-will removal of SEC/CFTC leadership, do not assume that current enforcement priorities will persist—build compliance based on statutes and existing guidance rather than relying on the stance of any individual commissioner.

• United States — State-Level Exposure: Reassess obligations in light of state-level AI laws that took effect on July 1, as well as the upcoming third-party audit regime under Illinois SB 315 and the New York RAISE Act (both effective January 1, 2027); confirm that transparency and incident reporting requirements under California SB 53 are fully implemented and operational.

• United States — Litigation Exposure: Review security upgrades and content moderation processes, document model safety decisions and override operations, and incorporate CSAM prevention controls and incident logging into any generative processes (see Grok CSAM case; wave of OpenAI infringement lawsuits).

Actions Currently Required for Web3 Enterprises

• United States — California DFAL (Immediate, Urgent): If involving California residents, confirm possession of a DFPI license or submission of a complete NMLS Application — Operating without a license faces daily penalties of USD 100,000. Implement capital requirements (net assets of USD 100,000), a surety bond of USD 500,000, and pre-listing asset due diligence.

• European Union — MiCA (current, urgent): The transition period has ended. Confirm that authorization has been obtained, or execute a written exit/customer migration plan; the choice of home Member State (see this week’s Binance and Coinbase cases) is critical. USDT is effectively unavailable on compliant EU platforms, with USDC being the default option.

• Hong Kong — LEAP / New Consultation: Study the Policy Statement 2.0 and the SFC consultations on dealers/custodians; assess licensing eligibility for businesses such as exchanges, stablecoins, trading, and custody, and prepare responses to the consultations. Maintain a firewall with mainland China.

• United Kingdom / Cross-border: Benchmark the FCA’s new final rules against MiCA and Hong Kong requirements to avoid conflicts of obligations in multi-jurisdictional operations.

• United States — CLARITY Act and Developer Liability: No full Senate vote yet—do not expect imminent exemptions. Map tokens against the CFTC/SEC division of labor and distinguish between “development” and “operation”; frontend maintenance, fee collection, and active support may transform code creation into actionable conduct under §1960(b)(1)(C) (the Storm theory).

This briefing is for reference only and does not constitute legal advice. Certain litigation matters involve sensitive topics (self-harm and child exploitation) and are summarized only at the level of factual allegations. If you require assistance with AI legal governance or compliance in Web3 and digital assets, please feel free to contact our lawyers. Thank you!

Mankun Law PLLC