Crypto Regulation and Compliance Updates

8,300 Chinese victims applying for compensation in a 60,000 Bitcoin money laundering case with slow progress, law firms acting independently leading to repeated issues, and rising legal fees. In February 2026, a hearing will be held in the High Court of the United Kingdom, involving over 30 billion RMB and nearly 130,000 victims. Bitcoin market capitalization has significantly shrunk.

On February 12, the largest banking lobbying organization in the United States—the American Bankers Association (ABA)—submitted a comment letter to the Office of the Comptroller of the Currency (OCC), urging it to slow down the approval process for cryptocurrency-related licenses until Congress completes rules for stablecoins and digital assets. The association warned that prematurely approving new digital asset institutions into the national banking system could pose potential risks to financial stability and resolution mechanisms. Currently, institutions including Circle, Ripple, BitGo, Paxos, and Laser Digital (a subsidiary of Nomura Securities) are applying for or already hold OCC conditional trust bank licenses. World Liberty Financial, associated with Trump, also submitted an application covering its $1 stablecoin. The ABA believes that, in the absence of the implementation of the GENIUS Act and its supporting regulations, the OCC should not follow the traditional approval pace.

Thailand takes a key step forward in cryptocurrency regulation. The Thai cabinet has approved significant amendments to the Derivatives Act, officially including cryptocurrencies within the scope of regulated derivative assets. This means that crypto assets will be recognized as compliant financial instruments within Thailand's capital market framework, suitable for hedging, pricing, and structured transactions. Pornanong Budsaratragoon, Secretary-General of the Securities and Exchange Commission (SEC) of Thailand, stated that this move will broaden investment options, strengthen risk management mechanisms, and promote the market toward greater transparency and diversification. The regulators also indicated that subsequent rules will be drafted to adjust derivative licensing systems, allowing digital asset-related institutions to offer contract products linked to cryptocurrencies, while simultaneously reviewing standards for trading, clearing, and risk control.

Odaily Planet Daily reports that the Thai cabinet has approved amendments to the Derivatives Act, allowing cryptocurrencies to be used as underlying assets for regulated derivative products. The Thai SEC will revise relevant licensing rules, establish standards for derivative contracts, and collaborate with the Thailand Futures Exchange to ensure that the risk characteristics of contracts align with digital asset features. This reform aims to promote market growth, diversify risk management, and incorporate digital asset activities into a clearer legal framework. (Decrypt)

The European Union plans to implement the 20th round of sanctions against Russia, including a comprehensive ban on cryptocurrency transactions with Russia, aimed at blocking Russian channels to bypass sanctions. Additionally, the sanctions will be expanded to include more Russian banks and certain third-country banks, expected to be approved on February 24. Russia, on the other hand, is promoting digital asset legislation to respond to these regulatory measures.

Hong Kong Legislative Council member Wu Jiezhuang posted on X, pointing out that Hong Kong's gradually relaxing policies will promote the development of licensed companies and the industry, with stablecoin issuer licenses expected to be issued starting in March. He suggested establishing a dedicated agency to coordinate the direction of digital and crypto assets and introducing regulations to support the compliant development of decentralized autonomous organizations (DAOs).

Cryptocurrency hackers can now transfer stolen funds within 2 seconds of an attack starting, and in most cases, they move assets before victims disclose data breaches. Global Ledger's analysis of 255 crypto hacking incidents in 2025 draws the clearest conclusion: 76% of hacker attacks had funds transferred before public disclosure, and this percentage rose to 84.6% in the second half of the year.

During his testimony before Congress, U.S. Securities and Exchange Commission Chairman Paul Atkins outlined three major priorities through 2026: focusing on fraud enforcement and investor protection, reforming disclosure rules, and providing a clear regulatory framework for digital assets. He emphasized the need to modernize reporting systems and acknowledged that clear regulation of digital assets has been "long overdue."

Blockchain data analysis company Bubblemaps released a survey report accusing the $1 million prize winner @beaverd on the X platform of being a long-term active meme coin scammer. The associated wallet launched $SIAS meme coins on Pump.fun, and after the market cap surged to $6 million, it collapsed to zero within minutes. Four side-wallets sniped profits of nearly $600,000.

On February 12, the U.S. Department of Justice announced a $4 million fine against peer-to-peer encryption platform Paxful. The company previously admitted that, lacking anti-money laundering and customer due diligence mechanisms, it had long transferred funds for criminals and profited directly from it. The related funds are said to be connected to human trafficking, scams, extortion, and illegal prostitution activities. Prosecutors disclosed that between January 2017 and September 2019, Paxful facilitated over 26 million transactions totaling nearly $3 billion, earning approximately $29.7 million in revenue. The Department of Justice pointed out that the company had promoted its platform as "no identity information required" and issued anti-money laundering policies that were not actually enforced, thereby attracting high-risk customers.

The White House has set the deadline for the CLARITY Act to March 1, pressuring lawmakers to reach a compromise on stablecoin regulation within 18 days. A closed-door meeting on February 10 did not reach an agreement, but showed progress in negotiations. Banks submitted written documents insisting on banning stablecoin yield to protect deposits, while crypto companies are advocating for exemptions from transaction-related rewards.

Chicago-based cryptocurrency liquidity provider and lending institution BlockFills paused customer deposits and withdrawals last week and is currently working to restore platform liquidity. The company has over 2,000 institutional clients, with trading volume expected to exceed $61.1 billion in 2025. Despite the suspension of withdrawals, customers can still open and close positions in spot and derivatives trading.

Sam Bankman-Fried claims to have new evidence proving that the U.S. Department of Justice, under the leadership of former President Biden, silenced key witnesses in his fraud case and is pushing for a retrial. He attached a court document link seeking a retrial under Federal Rule of Criminal Procedure 33. The motion cites a statement from former FTX employee Daniel Chapsky, who said that his lawyer "strongly advised" him not to testify due to the risk of "media attacks and possible retaliation from the prosecution."

Chinese authorities strengthen regulation of virtual currencies, jointly releasing a new notice clarifying that virtual currencies are not legal tender, and that related business activities are considered illegal financial activities. They also include the tokenization of real-world assets under strict regulation. The notice requires that virtual currency-related services are not provided domestically or abroad, and establishes multiple regulatory measures to ensure financial security.

The U.S. Department of Justice has fined cryptocurrency trading platform Paxful Holdings Inc. $4 million for failing to establish effective anti-money laundering measures, allowing funds related to criminal activities to flow and profiting from it. Investigations found that Paxful was aware that some customer funds originated from illegal activities but continued to provide services.

Paxful was sentenced to pay $4 million for facilitating money laundering and related crimes. Although it acknowledged a penalty of $112 million, the DOJ reduced it due to the company’s financial situation. Paxful also faces a $3.5 million civil penalty.

BlockFills has temporarily halted deposits and withdrawals due to market volatility but continues to allow trading positions. The firm, which served over 2,000 clients and facilitated $61 billion in trading last year, aims to restore liquidity.

Uniswap Labs wins a patent infringement lawsuit, with the court ruling that the plaintiff failed to make a reasonable request. The case involves Bancor claiming that Uniswap used its patented code without permission, and the judgment found that the relevant patent claims are not protected, upholding the DeFi community's freedom to innovate.

SEC Chairman Paul S. Atkins outlined the SEC's key focus areas at the congressional session, including reducing corporate compliance costs, supporting IPOs and capital formation, promoting digital asset regulation, reviewing traditional regulatory tools, and strengthening investor protection and enforcement. The SEC will continue to protect investors and promote market fairness.

The Hong Kong Securities and Futures Commission announced new guidelines allowing licensed brokers to expand their business to include virtual asset collateralized financing and the use of virtual assets as collateral, opening up market liquidity. At the same time, a high-level framework for perpetual contracts is provided for professional investors, and affiliated companies are permitted to act as market makers to invigorate the virtual asset trading ecosystem and promote market development.