Crypto Regulation and Compliance Updates

Jim Moloney, head of the SEC's Company Finance Division, stated that the department is rapidly advancing the development of regulatory rules for digital assets, with a focus on classification guidance and proposals for the regulatory framework for issuance and sales. Additionally, the SEC is pushing for other reforms, such as the implementation of HFIAA and adjustments to reporting requirements.

PANews February 13 News, according to Hong Kong Economic Daily, the new President of the Hong Kong Institute of Certified Public Accountants, Lo Cheuk Kin, stated that guidelines are being developed to help the accounting industry and business community understand how to handle virtual assets in accounting. The first part of the guidelines involving virtual currencies and stablecoins has been issued. The second part, which has not yet been published, relates to the Hong Kong Monetary Authority's audit requirements for stablecoins. The institute is currently discussing this with the HKMA, and it is expected to be released within 6 months. The goal for the third part of the virtual asset accounting guidelines is to be launched by the end of the year, but it will only be released after further communication and consensus with regulators and industry stakeholders.

Mixin hacker has been active again after two years of silence, starting to sell small amounts of their ETH and BTC holdings through Tornado Cash, having transferred 2,005 ETH. The hacker still holds approximately 57,849 ETH and 891 BTC, which could put pressure on the market. This incident serves as a reminder to investors of the importance of securing their crypto assets.

Israeli Defense Forces reservists and civilians have been charged for placing bets on military secrets on Polymarket,涉嫌 insider trading. This incident highlights the risks of unfair competition and insider involvement in prediction markets, especially in sensitive areas like war. It calls for potential future regulation to prevent similar issues.

_Chainalysis reports an 85% rise in crypto flows tied to trafficking networks, with stablecoins widely used in illicit operations._ Crypto payments are playing a growing role in suspected human trafficking operations. New findings from Chainalysis show a sharp increase in digital asset flows

The prediction markets in the United States have rapidly emerged in recent years, attracting the attention of regulatory agencies. SEC Chairman Paul Atkins emphasized that the legal status of prediction markets as "gambling" or "financial instruments" remains controversial, especially for contracts involving events such as elections. The overlapping regulatory authority requires collaboration between federal and state governments, and whether clear rules will be established in the future remains to be seen.

Seoul Gangnam Police Station in South Korea has discovered that 22 Bitcoins stored since 2021 have been transferred under unknown circumstances, worth over $1.4 million, with the cold wallet still at the police station. Previously, the Gwangju Prosecutor's Office also lost approximately $47 million worth of Bitcoin due to a phishing attack. This has raised questions about internal personnel or cybersecurity vulnerabilities, leading to a crisis of trust in the management of encrypted assets by Korean law enforcement agencies.

U.S. authorities warn of an increase in romance-related crypto scams around Valentine's Day, where scammers build trust over time before disappearing with victims' funds. Known as "pig butchering," this method combines emotional manipulation with fake investments, leading to significant financial losses.

February 13 News, the U.S. Department of Justice issued a warning through the Northern District of Ohio Federal Prosecutor's Office, reminding the public to stay vigilant around Valentine's Day and to be aware of love scams centered on cryptocurrency transfers and fake investments. In the official statement, they straightforwardly said: “Cupid does not ask for cryptocurrency,” and pointed out that criminals are using dating platforms, social media, and chat apps to establish relationships, then inducing transfers by citing emergencies, travel expenses, or so-called high-return investments. U.S. Prosecutor David M. Topfer stated that these scams are not about romance but are solely aimed at money. He urged the public to verify identities before any transfers and to avoid sending money to people they have never met. Law enforcement officials disclosed that scammers often forge identities using stolen photos, claiming to be overseas service members or engaged in international business, quickly expressing “deep affection,” then shifting conversations to private messaging apps, and ultimately demanding payments via encrypted assets, gift cards, or wire transfers.

February 13 News, during a Senate hearing, U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins for the first time systematically articulated his latest stance on cryptocurrency regulation. He stated that establishing a federal-level regulatory framework for the crypto asset market in the United States is "long overdue." This statement is seen as a significant policy signal, indicating that the U.S. is shifting from an "enforcement-first" approach to a phase of "rule-based" system building. For years, U.S. regulation of the crypto industry has mainly relied on case-by-case enforcement, lacking unified standards, with unclear compliance pathways for companies, and frequent obstacles to capital and innovation. Atkins pointed out that this fragmented approach can no longer meet the current market scale, and regulators need to coordinate operations within the same framework rather than acting independently.

The Jing'an District Court in Shanghai tried a virtual currency investment dispute case. Ms. Wu sued after being induced by a host to invest 1.05 million yuan and was unable to withdraw funds later. The court held that her investment actions violated laws and public order and morality, ruling that Ms. Wu must bear the losses herself and dismissing her claims. This verdict serves as a significant warning to investors engaging in speculative virtual currency investments.

The Gangnam Police Station in South Korea discovered 22 Bitcoins (worth approximately $1.5 million) transferred from a USB cold wallet. The Bitcoins were not detected during the investigation pause. The Northern Gyeonggi Provincial Police Department has launched an investigation to determine the cause of the fund outflow and whether there are any internal personnel involved. This incident is related to the loss of 320 Bitcoins by the Gwangju Prosecutor's Office.

Seoul Gangnam Police Station in South Korea has discovered that 22 Bitcoins seized since November 2021 have been transferred out from a USB cold wallet, unnoticed due to a suspension of the investigation. The Northern Gyeonggi Provincial Police Department has launched an investigation to determine the cause of the fund loss and whether any internal personnel are involved. This discovery stems from a nationwide review of the Bitcoin loss incident at the Gwangju Prosecutor's Office.

February 13 News, South Korea's law enforcement system has exposed further vulnerabilities in digital asset management. The Seoul Gangnam Police Station confirmed that in an investigation, Bitcoin seized and stored in November 2021 was recently found to have been transferred from a USB cold wallet. Internal checks revealed that the involved amount was 22 Bitcoins, estimated at approximately $1.5 million at current prices. The police have confirmed this to the media. According to disclosures, the physical USB drive of the cold wallet was not lost, but on-chain assets were successfully transferred out. Due to the investigation being temporarily halted, this anomaly went unnoticed for a long time until a recent nationwide review of evidence and digital asset management uncovered it. After local media first reported the incident, it sparked public doubts about law enforcement agencies' digital asset custody mechanisms.

An Israeli civilian and a reserve member of the Israel Defense Forces are accused of profiting from insider information by betting on the prediction market Polymarket, posing serious security risks. This incident has once again raised concerns about insider threats and information asymmetry providing competitive advantages, which could have serious consequences for war and political domains.

Praetorian Group International CEO Ramil Ventura Palafox was sentenced to 20 years in prison for operating a $200 million Bitcoin Ponzi scheme. The scheme resulted in over 90,000 investors losing more than $62.69 million. Palafox used new investor funds to pay returns and used part of the funds to purchase luxury goods.

Praetorian Group International CEO Ramil Ventura Palafox was sentenced to 20 years in prison for orchestrating a $200 million Bitcoin Ponzi scheme. He falsely promised high returns to 90,000 investors, resulting in a loss of $62 million.

At a Senate hearing, SEC Chair Paul Atkins stated that federal regulation of cryptocurrency is overdue, signaling a shift from enforcement to clarity. The SEC and CFTC plan to collaborate on standardized regulations via Project Crypto, aiming to support new legislation. Despite criticism from Elizabeth Warren regarding potential regulatory relaxation, the overall message indicates a recognition that cryptocurrency is integral to financial law, reducing uncertainty for institutions and developers.

Israeli authorities have charged a civilian and a reserve member of the defense forces with using military secrets to place bets on the prediction market Polymarket, earning over $150,000 through accurate predictions of six military operations. The incident has sparked controversy over insider trading and could impact future regulation of prediction markets.

A Connecticut man, Elmin Redzepagic, has been indicted on 21 counts for defrauding investors of $950,000 in a crypto scheme, which he disguised as trading but funneled to an offshore gambling site.