AI summaryAccording to incomplete statistics compiled by Mankun Law Firm, from August 26 to September 1, 2024 (UTC+8), a total of 41 significant crypto-related policies and related actions were disclosed worldwide. These primarily consisted of enforcement activities targeting cryptocurrencies in various countries and regions, although several key policy announcements were also made. Among these: There were 13 items of information regarding crypto policies in China; notably, the Hong Kong Monetary Authority launched the Ensemble Project sandbox to promote tokenization applications. In the United States, there were 10 major policies and actions involving the crypto industry, with reports indicating that the U.S. House of Representatives will hold multiple hearings on cryptocurrencies in September. In Europe,
According to incomplete statistics compiled by Mankun Law Firm, from August 26 to September 1, 2024 (UTC+8), a total of41significant crypto policy developments and related actions were disclosed across various countries and regions worldwide. These consisted primarily of law enforcement activities targeting cryptocurrencies in various jurisdictions, although several key policy announcements were also made. Specifically:
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There were 13 items of news concerning crypto policies in China. Notably, the Hong Kong Monetary Authority launched the Ensemble project sandbox to promote tokenization applications.
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There were 10 major policy developments and actions involving the crypto industry in the United States. Reports indicated that the U.S. House of Representatives would hold multiple hearings on cryptocurrencies in September.
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In Europe, there were six noteworthy policy updates. Among them, Russia’s imminent pilot programs for crypto payments and exchanges have attracted attention and sparked discussion within the Web3 industry.
Below is a summary of policy developments from August 26 to September 1, compiled by Mankun Law Firm.
Hong Kong Accepts Cryptocurrency License Applications Submitted After the Deadline
The Securities and Futures Commission (SFC) of Hong Kong accepted a license application from HKDAEx, a Hong Kong-based digital asset exchange, even though it was submitted after the deadline on August 27. Hong Kong is intensifying its crackdown on unlicensed virtual asset trading platforms as part of its efforts to establish itself as a global cryptocurrency hub.
Changning Court Successfully Recovers RMB 280,000 in Losses and Facilitates Settlement Between Victim and Defendant
In a recent case, the Changning City People’s Court successfully helped the victim recover economic losses amounting to RMB 280,000 through pre-trial mediation. Guided by the judge, the defendant voluntarily pleaded guilty and agreed to make restitution, ultimately securing the victim’s forgiveness. This process not only effectively safeguarded the legitimate rights and interests of the defendant but also demonstrated the court’s commitment to upholding judicial fairness.
Jiangxi Police Successfully Dismantle a Virtual Currency Money-Laundering Den, Eight Suspects Arrested
The Xingguo County Public Security Bureau in Jiangxi Province successfully dismantled a criminal syndicate engaged in money laundering through virtual assets, arresting eight suspects and seizing RMB 200,000 in involved funds. The suspects laundered illegally obtained loan proceeds, ultimately converting cash derived from fraud into virtual assets. This operation demonstrates the resolute crackdown by public security organs on novel money-laundering techniques and underscores the importance of public participation in preventing telecommunications and online fraud.
Three defendants were sentenced for illegally parsing nearly 20,000 digital wallet addresses by implanting “backdoors” in an application
On the 29th, the People’s Procuratorate of Xuhui District, Shanghai, announced the nation’s first case involving the illegal acquisition of digital wallet private keys. The three defendants, Liu, Zhang, and Dong, implanted “backdoors” in a virtual currency storage application to illegally obtain other users’ digital wallet private keys and mnemonic phrases, totaling 27,622 mnemonic phrases and 10,203 private keys, thereby successfully parsing 19,487 digital wallet addresses. In April 2024, the three were sentenced to three years’ imprisonment and fined RMB 30,000 for the crime of illegally obtaining data from computer information systems.
Hong Kong Police dismantle three money-laundering syndicates within a month, arresting 27 individuals
Hong Kong law enforcement authorities dismantled three money-laundering syndicates this month, successfully arresting 27 individuals involved in laundering criminal proceeds exceeding HK$300 million. Investigations revealed that these syndicates transferred fraudulent funds from Singapore into Hong Kong nominee accounts through multiple layers of transfers and used virtual assets for money laundering. Law enforcement actions have revealed a significant increase in money-laundering activities in the first half of this year, with the number of arrests rising by 40% compared to the same period last year.
Hong Kong Monetary Authority launches Ensemble Project sandbox to promote tokenization applications
The Hong Kong Monetary Authority (HKMA) has launched the Ensemble Project sandbox. The initial phase of testing will focus on four key themes: fixed income, liquidity management, green finance, and supply chain financing. Connections to tokenized deposit platforms have been completed in preparation for experiments on cross-bank payments and delivery-versus-payment settlement. The HKMA stated that it will continue to engage with the industry to foster innovative development in the tokenization market and enhance Hong Kong’s position in asset and wealth management. Subsequently, the HKMA announced the four use-case themes for the initial phase of testing. Working group members include Bank of China (Hong Kong) Limited, Hang Seng Bank Limited, HashKey Group, The Hongkong and Shanghai Banking Corporation Limited, Standard Chartered Bank (Hong Kong) Limited, Ant Digital Technologies, and Microsoft Hong Kong Limited, among others.
Lengshuijiang Police in Hunan Province solve series of virtual asset robbery cases, recovering assets worth over RMB 1 million
The Lengshuijiang Police recently solved a complex case involving “fake victims,” arresting 27 individuals involved. The case began on July 26, when police received reports from two men, both claiming to be victims. Investigations revealed that a woman had fabricated chat records to pose as a victim of telecommunications fraud, while in fact collaborating with syndicate members to commit robbery, stealing virtual assets worth approximately RMB 500,000 from the other party. Through technical analysis and psychological tactics, the police uncovered the syndicate’s true motives, successfully recovering assets worth over RMB 1 million. The case remains under further investigation.
Call for Bids for Major Judicial Research Projects of the Supreme People’s Court for 2024
The Supreme People’s Court issued a public notice inviting bids from people’s courts at all levels, higher education institutions, and research organizations for its major judicial research projects for 2024. The projects cover various research directions, including special funding, key funding, and youth projects. Among the key funded projects are studies on the disposal of virtual assets involved in cases, judicial issues related to the digital economy, and regulating cross-border data transfer, among other Web3-related fields.
Taiwanese couple prosecuted for suspected money laundering exceeding NT$1.6 billion
A couple surnamed Li in Taichung, Taiwan, are suspected of laundering money for multiple gambling syndicates, with the amount involved exceeding NT$1.6 billion. Last September, after the police cracked down on a gambling server room disguised as an advertising company, they discovered that the couple used virtual assets to transfer illegal proceeds and recruited members around the age of 20 to engage in money laundering. The police have transferred the suspects to the prosecutorial authorities on charges including violations of the Organized Crime Prevention Act, and have seized illicit gains totaling more than NT$73.2 million.
Hubei Court Rules Virtual Asset Investment Invalid; Investors Bear Their Own Losses
The People's Court of Wuhan East Lake High-Tech Development Zone in Hubei Province concluded a dispute over a virtual asset investment contract. Because the investment platform had been frozen, the court dismissed the plaintiff Mr. Liu’s claims, holding that his investment constituted an invalid civil juristic act and that he must bear the losses himself. Relying on his trust in a colleague, Mr. Liu transferred a total of more than RMB 1.84 million to Wang and third-party accounts to invest in “Tether (USDT),” but did not sign any agreement. The court found insufficient evidence to support the alleged entrustment relationship and ultimately decided that Mr. Liu should bear all losses. The judge emphasized that virtual asset investments carry legal risks and that investors should proceed with caution.
Liyang Procuratorate: Unemployed College Student Convicted of Concealment for Reselling Virtual Assets
To repay credit card debts, an unemployed college student surnamed Wu collaborated with a “money-laundering company” to resell virtual assets. He was ultimately sentenced by the Liyang City People's Court to six months’ imprisonment, suspended for one year, and fined RMB 2,000. After contacting money-laundering customer service on Telegram, Wu purchased USDT and sold it at inflated prices through a specific app. Despite warnings from those around him that this conduct was illegal, he persisted in participating. Police investigations revealed that his bank account transactions totaled more than RMB 25,000, with illegal profits exceeding RMB 5,000, leading to his prosecution in accordance with the law. During interrogation, Wu expressed remorse and admitted to his criminal conduct.
Hunan Police Dismantle Major Telecom Fraud Syndicate, Arrest 62 Suspects
Hunan police recently solved a major telecom fraud case, arresting 62 criminal suspects across 18 provinces, with the amount involved exceeding RMB 4 million. The syndicate provided support to overseas fraud groups by renting out mobile phone numbers and WeChat accounts, and engaged in illegal Bitcoin mining by exploiting low electricity rates. The police carried out coordinated nationwide operations, effectively cracking down on telecom fraud activities.
Hong Kong Government Promotes High-Quality Development of the Digital Economy
The Hong Kong Government has established the Digital Policy Office to accelerate the development of the digital economy and innovative technology. By promoting cross-border integration, building a digital ecosystem, and strengthening regulation to combat tech-enabled crimes, Hong Kong seeks to secure a leading position in the global digital economy. At the same time, the government will focus on public education to enhance digital mindset and foster the cultivation of innovation and technology talent.
Washington State Man Faces Charges in $64 Million Crypto Asset Money Laundering Case
Geoffrey K. Auyeung, a resident of Newcastle, Washington, has been charged for his alleged involvement in a $64 million crypto asset money laundering scheme. He is accused of impersonating a custodial agent to defraud investors and divert funds into his own accounts, subsequently transferring the funds overseas or converting them into Bitcoin and Ethereum through multiple crypto asset exchanges, such as Gemini, Bitstamp, and Coinbase. Investigators traced 74 bank accounts linked to Auyeung, and have so far seized $2.3 million in funds.
U.S. House of Representatives Plans Multiple Hearings on Crypto Assets in September
The U.S. House Committee on Financial Services will hold a series of hearings on crypto assets in September, focusing on decentralized finance (DeFi), the Securities and Exchange Commission’s (SEC) regulation of digital assets, and the impact of “pig butchering” scams. The first hearing on DeFi is scheduled for September 10. SEC Chair Gary Gensler is expected to testify at a full committee hearing on September 23, drawing significant attention. These developments reflect Congress’s continued focus on the regulation and legislation of the crypto industry.
Judge Dismisses Dogecoin Market Manipulation Lawsuit Against Elon Musk and Tesla
Manhattan Judge Alvin Hellerstein permanently dismissed the lawsuit alleging that Elon Musk and his company, Tesla, manipulated the price of Dogecoin (DOGE). The court held that Musk’s statements were “aspirational” and “hyperbolic” rather than factual assertions, and therefore no reasonable investor would have relied on them. The judge dismissed the claims and marked the case as closed.
OpenAI and Anthropic to Share AI Models with U.S. Government
OpenAI and Anthropic have agreed to provide the U.S. government with access to their major new AI models for safety testing prior to public release. This initiative aims to help the government assess security risks and mitigate potential issues, while also collaborating with relevant authorities in the United Kingdom. Currently, the California legislature is considering safety measures for AI technology and has advanced related legislation, despite opposition from some AI companies. The White House is also working to secure voluntary commitments from major enterprises regarding AI safety measures.
U.S. District Judge Dismisses SEC’s Securities Claims Regarding Secondary Market Sales of Binance’s BNB Token
As disclosed by a Fox Business reporter, U.S. District Judge Amy Berman Jackson dismissed the SEC’s claims that secondary market sales of Binance’s BNB token constituted securities. Citing the opinion of Judge Analisa Torres in the Ripple case, she emphasized the importance of the economic reality of transactions when applying the Howey test. The judge noted that the government’s arguments were insufficient to classify secondary sales of BNB as securities under investment contracts, highlighting inconsistencies with the government’s prior theoretical positions.
SEC Amends Investment Company Reporting Requirements to Enhance Transparency in Liquidity Risk Management
On August 28, 2024, the U.S. Securities and Exchange Commission adopted amendments to the reporting requirements of Form N-PORT and Form N-CEN, aiming to enhance regulatory oversight and public transparency in the asset management industry. The amendments require investment companies to submit portfolio holdings information on a monthly basis, increasing the frequency of public disclosures to enable investors to make more informed investment decisions. Additionally, the amendments require open-end funds to report information on service providers used for liquidity risk management. The new rules will take effect on November 17, 2025.
California Passes AI Company Data Transparency Bill, Awaiting Governor’s Signature
On Tuesday, the California legislature passed a bill requiring artificial intelligence companies to provide greater transparency regarding the data used to train their models. The bill has now been submitted to Governor Gavin Newsom, who has not yet commented on it. Elon Musk expressed support for the bill, noting its potential impact on open-source models.
SEC Sues Brothers Alleging $600,000 Virtual Asset Ponzi Scheme
The U.S. Securities and Exchange Commission (SEC) has charged Jonathan Adam and his brother Tanner Adam with operating a $60 million virtual asset Ponzi scheme that purported to use a non-existent crypto trading bot to attract more than 80 investors. According to the SEC’s complaint, from January 2023 to June 2024, the brothers promised monthly investment returns of 13.5% through their trading bot, while in fact using the majority of the $53.9 million raised for lavish personal expenditures, including purchasing automobiles and constructing a $30 million apartment complex. The SEC has obtained emergency asset freezes against the brothers and their company, and is seeking permanent injunctions and civil penalties.
U.S. Authorities Oppose Motion by Former FTX Executive to Withdraw Guilty Plea
The U.S. Attorney’s Office recently opposed a motion by Ryan Salame, former co-CEO of FTX Digital Markets, to withdraw his guilty plea. Salame pleaded guilty to violations of campaign finance laws and was sentenced to seven and a half years’ imprisonment. He claimed that during plea negotiations, prosecutors implied they would not continue investigating his associate, Michelle Bond. In its response, the prosecution described this assertion as “clearly false,” noting that Bond has already been indicted on related charges. Salame’s legal team must submit a written rebuttal by September 4.
Abra Settles with SEC Over Charges of Unregistered Sales of Crypto Asset Securities
In July 2020, Abra reached a settlement with the U.S. Securities and Exchange Commission (SEC) over allegations that it had sold unregistered crypto asset securities through its crypto lending product, Abra Earn. The SEC alleged that, while providing yields to customers, Abra used customer digital assets to generate revenue for itself and pay interest. Under the settlement, Abra agreed to comply with registration requirements under the Securities Act and the Investment Company Act, and to pay civil penalties as determined by the court. Without admitting any wrongdoing, Abra stated that it would continue to comply with securities laws and confirmed that all assets of U.S. customers had been transferred to Abra Trade accounts in 2023.
Medway Trader Becomes First Person in the UK Prosecuted for Crypto ATM Offenses
A Medway trader has been charged with illegally operating cryptocurrency ATMs, becoming the first person in the United Kingdom to be prosecuted for this offense. Habibur Rahman is alleged to have operated the ATMs without registering with the Financial Conduct Authority (FCA) and is accused of laundering money by converting £300,000 of criminal cash into crypto assets. He has been released on bail and is scheduled to appear at Medway Magistrates’ Court on October 10, 2024. The FCA has warned the public that there are currently no registered crypto ATMs and that using such machines may pose risks.
New Zealand Considers Adopting OECD Crypto Reporting Standards
New Zealand’s Minister of Finance has proposed implementing the OECD framework for the automatic exchange of financial information on crypto assets. The relevant amendments are expected to take effect on April 1, 2026, requiring crypto service providers in New Zealand to collect transaction information. Failure to provide the required information will result in fines of $300 per instance for service providers and $1,000 for users. This measure aims to enhance tax transparency and ensure regulatory oversight of income derived from crypto assets.
Telegram CEO Arrested by French Authorities for Allegedly Providing Unauthorized 'Cryptography' Services
On August 26, French authorities issued a statement clarifying that the arrest of Telegram CEO Pavel Durov is linked to a broad cybercrime investigation, with charges including the provision of “cryptographic” services and tools.
The UK Financial Conduct Authority (FCA) has not approved any crypto asset registrations in the past six months.
The UK Financial Conduct Authority (FCA) has not approved the registration of any crypto asset companies in the past six months. Although former Chancellor of the Exchequer Rishi Sunak pledged in 2022 to position the UK as a “global hub for crypto asset technology,” this commitment now appears increasingly out of reach. The regulator stated that the primary reason for the stagnation in the registration process is that most crypto asset firms have failed to meet its anti-money laundering standards.
Russia is poised to commence pilot programs for crypto payments and exchanges.
Russia is set to launch pilot programs for cryptocurrency exchanges and the use of digital tokens in cross-border transactions, aiming to alleviate payment difficulties faced by Russian businesses impacted by international sanctions. Two informed sources indicated that the pilots will commence on September 1. They stated that, during the testing of payment and trading platforms, Russia will utilize the National Payment Card System to facilitate exchanges between the ruble and cryptocurrencies.
Statement by French President Macron on the Arrest of Pavel Durov
French President Emmanuel Macron clarified misinformation regarding the arrest of Telegram founder Pavel Durov on X (formerly Twitter). He reaffirmed France’s unwavering commitment to freedom of speech, freedom of communication, innovation, and entrepreneurship, emphasizing that this stance remains unchanged. Macron noted that the legal framework serves as the foundation for protecting citizens and respecting their fundamental rights, and that the judiciary, acting independently, is responsible for enforcing the law. He stressed that Durov’s arrest was based on an ongoing judicial investigation rather than a political decision. Previously, French authorities had extended Durov’s detention period.
Japan Cryptoasset Business Association (JCBA) Discusses Crypto Asset Tax Reform
At the WebX 2024 conference, the Japan Cryptoasset Business Association (JCBA) discussed tax reform for crypto assets in Japan, focusing on the feasibility of implementing separate taxation for capital gains. Participants unanimously agreed that the current tax regime has significant deficiencies and requires structural adjustments to better accommodate the unique characteristics of crypto assets and to encourage investor participation. Additionally, the government needs to strengthen dialogue with the industry to ensure that tax reforms promote economic development.
Japan’s Minister of Economy, Trade and Industry Anticipates Innovation from Web3
At the international Web3 conference “WebX,” Japan’s Minister of Economy, Trade and Industry, Ken Saito, emphasized that Japan is undergoing a historic transformation and is committed to becoming a “global hub for creativity.” He highlighted that Web3 technology is crucial for addressing societal challenges and stated his intention to advance tax and legal reforms to support startups and attract global entrepreneurs and developers. The conference aims to stimulate innovation and drive Japan’s strategic development in the digital economy.
Japanese Prime Minister Fumio Kishida: Anticipating Innovation in Web3 and Blockchain Technologies to Address Various Social Challenges
At the opening ceremony of the Web3 conference “WebX 2024,” Japanese Prime Minister Fumio Kishida stated via video address his expectation that Web3 and blockchain technologies would play an innovative role in addressing social issues. He emphasized the government’s policy, promoted since 2020, to advance digital transformation with the aim of providing an open space for technological innovation, and mentioned the implementation of tax and legal reforms to support Web3 startups and revitalize the content industry.
Singapore Holds an Advantage in Global Crypto Asset Adoption Due to Its Leading Regulatory Policies
According to the 2024 Crypto Adoption Index published by Henley & Partners, Singapore has emerged as a global leader in crypto asset adoption, leveraging its pioneering regulatory policies and innovative financial initiatives. The report identifies support from the banking system, significant investment, and a comprehensive regulatory framework as key drivers behind Singapore’s widespread adoption of crypto assets. Hong Kong and the United Arab Emirates rank second and third, respectively, underscoring the strong growth momentum in the Asian crypto asset sector. The United States and the United Kingdom round out the top five, despite navigating complex regulatory landscapes.
Indian Court Orders Shutdown of Websites Conducting Fraud Under the Name of Mudrex
The Delhi High Court in India recently ordered the shutdown of 38 fraudulent websites impersonating the crypto asset exchange Mudrex, directing the Ministry of Communications to enforce the order within one week. The CEO of Mudrex stated that the number of retail investors estimated to have been defrauded may exceed 1,000, with losses surpassing USD 50,000. The fraudsters deceived investors by impersonating Mudrex employees and illegally collected funds.
Dutch Man Sentenced to Six Years’ Imprisonment in Singapore for “Ponzi Scheme”
A 61-year-old Dutch national, Yang Bin, was sentenced to six years’ imprisonment for operating a “Ponzi scheme” through an investment company established in Singapore. Between May 2021 and February 2022, he defrauded more than 700 investors of SGD 6.7 million by promising investment plans involving cooperation with Chinese crypto mining companies, although he did not actually possess any mining machines. The court found Yang Bin liable on 19 charges; he ultimately pleaded guilty to eight of them and was fined SGD 16,000. Another member of the syndicate, Wang Xinghong, has pleaded guilty and was sentenced to five years’ imprisonment, while the cases against the remaining accomplices are still under trial.
Indian Government Investigates Telegram for Suspected Criminal Activities
The Indian government is investigating the messaging application Telegram due to allegations of its improper use in criminal activities such as extortion and gambling. The investigation is being conducted jointly by the Ministry of Home Affairs and the Ministry of Electronics and Information Technology, and the results could lead to a ban on the application. This development comes amid the arrest of Telegram founder Pavel Durov in Paris for failing to effectively manage criminal conduct on the platform.
Other Countries and Regions
More than 110 companies are building Bitcoin-related businesses in Africa
Bitcoin Magazine posted on X that more than 110 companies are currently building Bitcoin-related businesses across the African continent. A map shows that these Bitcoin activities are distributed across multiple countries, including Nigeria, South Africa, Kenya, and Uganda. These companies and communities span a wide range of sectors, including technology development, mining, education, financial services, and media.
Nigeria provisionally approves operations of two crypto exchanges
According to Jinshi Data, Nigeria has provisionally approved two crypto exchanges to commence operations under the Accelerated Regulatory Incubation Program (ARIP).
BIS: Banks transacting on permissionless blockchains face multiple risks
A report by the Bank for International Settlements (BIS) notes that banks face various risks when transacting on permissionless blockchains, including risks related to settlement finality, compliance, operational security, governance, and legal matters. The report emphasizes that because blockchains rely on unknown third parties, banks encounter challenges in conducting due diligence, and current risk management strategies have not been stress-tested. To address privacy concerns, zero-knowledge proofs are considered a potential solution.
Nigerian judge to hear Binance money-laundering case ahead of schedule
A Nigerian judge will hear the money-laundering case involving Binance and two of its executives next week, with the trial originally scheduled for October 11 moved up to September 2. Binance is accused of laundering more than USD 35 million and is blamed in part for the depreciation of the naira, which led it to suspend naira trading. Binance and its executives deny the allegations; however, one executive has fled Nigeria.
Argentina introduces Ethereum and blockchain technology courses in high schools
Argentina has made significant progress in blockchain education, surpassing other countries in Latin America. The ETH Kipu Foundation, in collaboration with the Buenos Aires Ministry of Education, has incorporated Ethereum and blockchain technology into the high school curriculum, aiming to provide students with new career opportunities needed for a future tech-driven economy. In addition, starting August 27, students will have the opportunity to participate in internships on blockchain projects and learn the Solidity programming language, paving the way for their careers.
