Summary of Global Regulatory Policies for the Crypto Industry (June 24–30, 2024)

Track global policy developments and grasp Web3.0 compliance trends

According to incomplete statistics compiled by Mankun Law Firm, from June 24 to June 30, 2024 (UTC+8), a total of key crypto policies and related actions were disclosed by countries and regions worldwide.21These includemultiple cases and increasingly stringent regulations on virtual currency transactions enacted by various countries/regions.Specifically:

There were five pieces of information regarding crypto policies in China, many of which involved cases related to virtual currencies, once again raising regulatory concerns about Web3;
There were nine policy developments and actions concerning the crypto industry in the United States, many of which were related to enforcement by the U.S. Securities and Exchange Commission (SEC), particularly the dismissal by a U.S. judge of certain charges brought by the SEC against Binance and CZ;
In Europe, two policies concerning virtual currencies were introduced, including the Markets in Crypto-Assets Regulation (MiCA), which took effect at the end of the month and will impose strict restrictions on virtual currency trading in Europe.

Below is a summary of policies from June 24 to 30, compiled by Mankun Blockchain Law Firm.

China

National Audit Office: Financial regulators used virtual currencies to conceal sources of funds

In the 2023 annual report submitted to the Standing Committee of the National People's Congress, the National Audit Office specifically highlighted the issue of virtual currencies and encryption technologies being used in the financial sector to mask the origins of illicit funds.

Investing in virtual assets in Hong Kong is not subject to capital gains tax

According to an article published by Ta Kung Pao in Hong Kong, investments in virtual assets in Hong Kong are not subject to capital gains tax, offering significant advantages in developing the virtual asset market. Ta Kung Pao also stated that this measure is highly attractive to global investors.

Hong Kong SFC adds Tokencan, Hong Kong Weibi Crypto Assets, and HKD.com Corporation to warning list

The Hong Kong Securities and Futures Commission (SFC) warned the public to exercise caution regarding three companies—"Tokencan," "Hong Kong Weibi Crypto Assets," and "HKD.com Corporation"—which are suspected of engaging in fraudulent activities involving virtual assets or operating without licenses. These companies and their websites have been added to the warning list. The Hong Kong Police Force has blocked the relevant websites and social media pages.

Three employees of 360 Company sentenced for stealing cryptocurrencies

According to indictments by the Xuhui District People's Procuratorate in Shanghai, Hong (former Deputy Director of the Advanced Attack Research Institute at Qihoo 360), together with Zheng and Zhang, illegally obtained others' wallet addresses and private keys through technical means, stole cryptocurrencies, and profited over RMB 2.5 million. Hong and Zheng were each sentenced to three years' imprisonment and fined, with eligibility for probation.

Hanshou County Public Security Bureau in Hunan Province urges users staking and lending on STFIL Protocol to report situations and submit records promptly

The Hanshou County Public Security Bureau in Hunan Province issued an announcement on the official website of STFIL Protocol, an LSD protocol in the Filecoin ecosystem, stating: "To ascertain the facts of the crime, users who have staked with or lent through STFIL are requested to report to our bureau and provide relevant evidentiary materials."

United States

IRS establishes new cryptocurrency tax reporting rules

Starting in 2026, the Internal Revenue Service (IRS) will require cryptocurrency platforms to report transaction information to standardize tax reporting and combat tax evasion. This rule applies to custodial platforms, such as trading platforms like Coinbase that hold customer assets, but does not apply to non-custodial decentralized platforms.

U.S. judge allows most SEC charges against Binance to proceed but dismisses secondary sales charges

A judge in the U.S. District Court allowed most of the Securities and Exchange Commission's (SEC) charges against the cryptocurrency exchange Binance to proceed but dismissed the portion of the charges related toBNBsecondary sales. Judge Amy Berman Jackson ruled that further review was needed for charges concerning Binance's initial token offerings and other services, but dismissed the SEC's charges regarding the secondary sales of BNB tokens and the Simple Earn service.

U.S. SEC sues Consensys for violating federal securities laws

The U.S. Securities and Exchange Commission (SEC) sued Consensys, alleging in the complaint that since 2016, Consensys developed and operated a suite of crypto asset-related services under the "MetaMask" brand, thereby violating federal securities laws by failing to register as a broker-dealer and failing to register the offer and sale of certain securities.

U.S. Supreme Court overturns 1984 "Chevron Deference" doctrine

The U.S. Supreme Court, in a 6-3 decision, overturned the 1984 Chevron Deference doctrine, which previously stated that when congressional laws were "ambiguous," federal judges should defer to the "reasonable" discretion of federal agencies. This ruling may significantly limit the power of federal agencies, such as the SEC, in bringing various charges and enforcing actions against the Web3 industry.

U.S. Supreme Court rules SEC use of internal adjudicatory proceedings to bring charges unconstitutional

This ruling effectively limits the power of all federal agencies (not just the U.S. Securities and Exchange Commission), as they must litigate cases in federal courts. The Supreme Court ruled that the SEC's practice of using internal adjudicatory proceedings to initiate lawsuits is unconstitutional. This also means that henceforth, if the SEC wishes to sue Web3 projects, it must do so through federal court proceedings and rulings.

Two men in the U.S. sentenced to prison for manipulating cryptocurrency markets

Two men were sentenced to prison for participating in the manipulation of the price of the cryptocurrency HYDRO and defrauding investors. This marks the first time in a federal criminal trial that a cryptocurrency was deemed a security, confirming that manipulating cryptocurrency prices constitutes securities fraud. This case demonstrates that the Department of Justice will utilize all available legal tools to maintain the integrity of cryptocurrency markets.

Binance.US to suspend crypto services for Washington State users on August 20

According to an official tweet from Binance.US, due to no longer holding an operational license in Washington State, Binance.US will suspend services for users in Washington State on or after August 20, 2024, and close all accounts in that state, in accordance with regulatory requirements.

Louisiana's new cryptocurrency law protects node operators and prohibitsCBDC

Louisiana amended its legislation, effective August 2024, explicitly prohibiting the use of Central Bank Digital Currencies (CBDCs) and establishing rules for digital asset miners and node operators. The amendments aim to limit foreign control over digital asset mining and clearly define the role and status of node operators.

Biden administration rehires former crypto advisor Carole House

Carole House, a key official who advised on and co-authored President Biden's 2022 executive order on cryptocurrencies and digital assets, has returned to the government. She will serve as a Special Advisor in the White House National Security Council, focusing on "critical infrastructure policy" and cybersecurity.

Japan and South Korea

South Korea's Financial Services Commission to implement "Virtual Asset User Protection Act" next month and establish Virtual Asset Committee

The South Korean Financial Services Commission announced that the "Virtual Asset User Protection Act" will officially take effect on the 19th of next month, and a Virtual Asset Committee will be established. The new regulations strictly prescribe penalties for illegal acts involving virtual assets, including market manipulation and insider trading. Violators may face felony charges, with maximum sentences of life imprisonment.

South Korea to require virtual asset service providers to report major shareholder information

To strengthen supervision of virtual asset businesses, the South Korean Financial Services Commission announced the implementation of newly revised "Regulations on Reporting and Supervision of Specific Financial Transaction Information" starting from the 27th of this month. Under these regulations, virtual asset service providers must not only report information on their organization, personnel, and facilities but also report information on major shareholders.

Europe

EU's Markets in Crypto-Assets Regulation (MiCA) takes effect on June 30

The European Union's Markets in Crypto-Assets Regulation (MiCA) took effect on June 30, including strict restrictions on stablecoin transactions. The regulation will prohibit stablecoin transactions exceeding one million per day for the purchase of goods or services. Large stablecoin issuers such as Tether and Circle will be significantly restricted by the new rules.

Turkey strengthens regulation of crypto asset service providers, with up to 22 years' imprisonment

The Turkish Parliament passed a bill introducing new regulations for crypto asset service providers, with unauthorized operators facing imprisonment ranging from 3 to 22 years. According to the "Amendment to the Capital Markets Law," all crypto asset service providers must obtain permission from the Capital Markets Board (SPK) before establishment and operation, and must comply with standards set by the Scientific and Technological Research Council of Turkey (TUBITAK).

Other Countries and Regions

Nigerian officials advocate using blockchain and AI to combat illicit financial flows

Olanipekun Olukoyede, Chairman of Nigeria's Economic and Financial Crimes Commission, emphasized at the All-Africa Conference that the use of blockchain technology and artificial intelligence (AI) can effectively combat Illicit Financial Flows (IFFs).

Kazakhstan AFSA approves Toncoin for trading on licensed platforms

Following a comprehensive review, the AFSA (Agency for Financial Supervision) approved the trading of the digital asset Toncoin, based on theTelegram Open Network (TON) blockchain, on its licensed platforms. This decision means that investors can now safely trade Toncoin in compliance with the strict regulatory and investor protection measures established by the AFSA.

Bolivia lifts ban on Bitcoin and other cryptocurrencies

Bolivia has lifted its ban on Bitcoin and other cryptocurrencies. The Central Bank of Bolivia (BCB) officially announced that banks may now conduct cryptocurrency transactions. Although cryptocurrencies can now be traded through authorized electronic channels, the Central Bank of Bolivia reminds citizens that cryptocurrencies are not considered legal tender.

Special Statement:

This article is an original work by Mankun Law Firm and represents only the personal views of the author. It does not constitute legal consultation or legal advice on specific matters.