Summary of Global Regulatory Policies for the Crypto Industry (July 1–July 7, 2024)

Track global policy developments and grasp Web3 compliance trends

According to incomplete statistics compiled by Mankun Law Firm, from July 1 to July 7, 2024 (UTC+8), a total of21 instancesof key crypto policies and related actions were disclosed across various countries and regions worldwide, among which multiplecountries/regions facilitated the Web3 industry through policy measures. Specifically:

There were four pieces of information regarding crypto policies in China. Notably, Shanghai released its first Web3.0 industry report, which had significant influence on the industry. Several experts called on government agencies to study "tokenomics" to optimize regulation.
There were four policy developments and actions concerning the crypto industry in the United States. Notably, cryptocurrency companies will no longer require a money transmitter license issued by Hawaii to operate in the state.
In Japan and South Korea, represented by South Korea, there were three policy developments. For instance, the postponement of cryptocurrency taxation and Jeju Province's desire to leverage crypto technology for the digital transformation of its tourism industry both demonstrate South Korea's friendliness toward the crypto industry.
In Southeast Asia, there were three noteworthy policy updates. Among them, the Philippines supports users paying Social Security System fees using USDT via the Uquid card on the TON blockchain.

Below is a summary of policies from July 1 to July 7, compiled by Mankun Blockchain Law Firm.

China

Hong Kong SFC Warns Public to Stay Away from Seven Entities Suspected ofVirtual AssetFraud

The Hong Kong Securities and Futures Commission (SFC) today reminded the public to be vigilant against seven entities suspected of engaging in virtual asset-related fraudulent activities. These entities operated under the guise of virtual asset trading services, often attracting investors through social media or instant messaging apps. The entities involved include XTCQT, CEG, BTEPRO, Bitones.org, Yomaex Crypto Market Limited, Bstor, and Taurusemex.

Chongqing Company Suspected of Fraud for Selling Virtual Coins; Procuratorate Initiates Creditor Verification and Registration

Chongqing Juxingyao Technology Co., Ltd. has been accepted for review and prosecution by the Shapingba District People's Procuratorate in Chongqing for suspected fundraising fraud after selling EPF virtual coins. The company had promised high returns on purchases of EPF virtual coins, attracting a large number of investors before collapsing. To protect investors' interests, the procuratorate has initiated a creditor verification and registration process. Investors must bring all relevant materials for registration between July 1 and July 5, 2024. Investors who fail to declare within the specified period will need to resolve their subsequent claims through civil litigation.

Hong Kong Cyberport LaunchesGreen FinanceTechnology Grant Scheme

Hong Kong Cyberport announced the launch of the "Proof-of-Concept Funding Scheme for Green and Sustainable FinTech," commissioned by the Financial Services and the Treasury Bureau of Hong Kong. The scheme aims to encourage innovative R&D and commercial applications in green fintech, covering areas such as green and digital finance and investment, ESG compliance, carbon trading, ESG data analysis, and risk assessment. Grants of up to HK$150,000 are available to support the early development of relevant projects, accelerating Hong Kong's transformation into an international green tech and financial hub.

Shanghai Releases First WEB3.0 Industry Report; Experts Advocate Research into "Tokenomics"

Under the guidance of the Shanghai Municipal Science and Technology Commission, Jiefang Daily and the School of Economics at Fudan University jointly released the "2024 Shanghai WEB3.0 Innovation Ecosystem Construction Survey Report." This report focuses on the challenges and opportunities of WEB3.0 and proposes several targeted recommendations. It also suggests researching "tokenomics" to strengthen industry standard-setting and innovate regulatory frameworks, thereby protecting investor interests and promoting the healthy development of the industry.

United States

U.S. Judge Rules to Continue Hearing DraftKings NFTSecurities Nature Lawsuit

A judge in Massachusetts, United States, recently denied DraftKings' motion to dismiss a class-action lawsuit. The case involves sports-themed non-fungible tokens (NFTs) issued by DraftKings, which are alleged to constitute securities. This ruling paves the way for future legal debates on whether NFTs qualify as securities.

U.S. SEC Sues Silvergate Bank for Securities Fraud

The U.S. Securities and Exchange Commission (SEC) has filed a securities fraud lawsuit against crypto-focused Silvergate Capital Corp in federal court. The SEC alleges that the company engaged in a "fraudulent scheme" against investors through deficiencies in its bank secrecy and anti-money laundering compliance procedures, as well as misrepresentations regarding its financial condition, following the collapse of the crypto exchange FTX in November 2022. Silvergate Bank agreed to pay $63 million to settle with the SEC and other regulators.

U.S. Department of Justice Tenders for Crypto Asset Management Services; Coinbase Wins Bid

The U.S. Marshals Service (USMS), under the U.S. Department of Justice, issued a tender for its Asset Forfeiture Division (AFD), seeking commercial proposals for Category I cryptocurrency management services. These services include the storage, management, and liquidation of cryptocurrencies, ensuring legality, professionalism, and compliance with government policies. The USMS has now announced the results, with Coinbase winning the bid at $32.5 million.

Hawaii Ends RegulatorySandbox: Crypto Companies Can Operate Without State License

Hawaii's regulatory sandbox program has ended, meaning cryptocurrency companies will no longer require a money transmitter license issued by Hawaii to operate in the state. This change allows participating digital currency issuers to operate without a state-level money transmitter license, but they must still comply with federal regulations, including those of the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA).

Japan and South Korea

South Korea Postpones Implementation of Cryptocurrency Tax to 2025

The South Korean government announced that the implementation of new virtual asset tax regulations will be postponed to January 2025. The delay primarily affects individual income tax for residents and withholding tax for non-residents and foreign companies. This extension provides time for the government and the crypto industry to fine-tune the regulations, ensuring a smooth transition to the new tax regime in 2025.

South Korean Government Launches Real-Time Monitoring System to Combat Crypto Fraud

The Financial Supervisory Service (FSS) of South Korea announced today that it has collaborated with local exchanges to develop a 24-hour monitoring system to screen for any suspicious activities in the cryptocurrency market. The system will launch on July 19, the day South Korea's first regulatory framework for crypto investor protection takes effect.

Jeju Province, South Korea, Emphasizes That the Time Has Come to Introduce Virtual Currencies

Oh Young-hoon, Governor of Jeju Special Self-Governing Province, stated that now is the necessary time to introduce virtual currencies to Jeju's tourism sector. Jeju Province is making "Digital Great Transformation" a core agenda item, planning to open new markets by introducing NFTs and virtual currencies, and integrating the digital economy and technology into the tourism industry.

Europe

EU to Implement "EU Travel Rule" for Crypto Exchanges to Strengthen Anti-Money Laundering Measures

The European Banking Authority (EBA) has issued new guidelines on the "EU Travel Rule," which governs information accompanying transfers of funds and certain crypto-assets. The guidelines clarify what information should accompany transfers of funds or crypto-assets and outline the steps payment service providers (PSPs), intermediary PSPs (IPSPs), crypto-asset service providers (CASPs), and intermediary CASPs (ICASPs) should take when detecting missing or incomplete information, as well as the measures to be taken when required information is lacking in fund or crypto-asset transfers.

Basel Committee Approves Disclosure Framework for Banks' Crypto Assets and Revises Capital Standards

The Basel Committee on Banking Supervision recently approved a disclosure framework for banks' crypto-asset risks, scheduled to take effect on January 1, 2026. Additionally, the committee approved targeted revisions to prudential standards for crypto-assets, particularly regarding the criteria for stablecoins to receive favorable "Group 1b" regulatory treatment. These revisions will also become effective on January 1, 2026.

Danish Financial Supervisory Authority Debunks Rumors of Ban on Self-Custody Wallets

Recent social media rumors suggested that Denmark would ban Bitcoin wallets. However, Tobias Thygesen, head of the Danish Financial Supervisory Authority (DFSA), stated in an interview with Cointelegraph that the DFSA has not proposed banning hardware wallets or other non-custodial wallets. He emphasized that the Markets in Crypto-Assets (MiCA) regulation only applies to activities involving the custody and administration of crypto-assets for clients. Self-custody wallets, due to their fully decentralized nature, naturally fall outside the scope of this regulation.

Southeast Asia

Transnational Fraud Syndicate "Lock Star" Arrested in Thailand; Assets Worth Approximately 30 Million Baht Seized

Colonel Atip Pongsivapai, Commander of the Technology Crime Suppression Division in Thailand, stated on Friday that six members of the hybrid fraud syndicate known as "Lock Star," including two Chinese citizens and four Thais, had been successfully captured. The syndicate carried out digital currency investment fraud through a fake application called Tidex, inducing victims to install the app and transfer funds for investment.

Paxos Approved by Singapore to Issue Stablecoins; DBS Provides Custody Services

Digital asset company Paxos has received full approval from the Monetary Authority of Singapore (MAS) to provide digital payment token services, enabling it to issue stablecoins in Singapore. DBS, Singapore's largest bank, will serve as its primary banking partner for cash management and stablecoin reserves.

Philippines Supports Payment of Social Security System Fees Using USDT

According to an official announcement by Tether, users in the Philippines can now pay fees related to the Social Security System using USDT (Tether) via the Uquid card platform on the TON blockchain. This brings the convenience and innovation of digital currencies to the Philippine payment system.

Other Countries and Regions

Nigeria Plans to Establish National AI and Blockchain Research Centers

The National Information Technology Development Agency (NITDA) of Nigeria plans to establish research centers focused on emerging technologies such as artificial intelligence (AI), the Internet of Things (IoT), and blockchain across the country's six geopolitical zones. In addition to funding research, NITDA plans to support Nigerian startups in using emerging technologies to develop products and create innovation sandboxes to help startups develop use cases, establish businesses, and bring products to market.

Central Bank of Nigeria Accuses Binance of Unauthorized Banking Services

The Central Bank of Nigeria (CBN) has accused the cryptocurrency exchange Binance of providing banking services without proper authorization. Olubukola Akinwunmi, Head of Payment Systems Policy and Regulation at the CBN, confirmed before the Federal High Court in Abuja that deposit and withdrawal transactions should be exclusive to banks and authorized financial institutions.

Securities and Exchange Commission of Nigeria Requires Crypto Companies to Establish Local Offices

New regulations from the Securities and Exchange Commission (SEC) of Nigeria require virtual asset service providers (VASPs) to establish offices in Nigeria to comply with its Accelerated Regulatory Incubation Program (ARIP). The program aims to facilitate the registration and operation of VASPs in Nigeria. Additionally, the company's CEO or General Manager must reside in Nigeria.

Paraguay Raises Electricity Fees by 14%; Bitcoin Miners May Consider Halting Operations

The National Electricity Administration (ANDE) of Paraguay suddenly announced a 14% increase in electricity fees for cryptocurrency mining operators. This change has already caused one company, which planned to invest over $400 million in the country, to withdraw. The measure may threaten the continued operations of Bitcoin miners in Paraguay.

Special Statement:

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