illegal

According to CoinDesk, the Financial Action Task Force (FATF) has released a report warning that stablecoins have become the most widely used virtual assets in illegal transactions, calling for increased regulation of issuers.The report cites data from Chainalysis, indicating that by 2025, stablecoins will account for 84% of the volume of illegal virtual asset transactions, involving an amount of $154 billion. A report from TRM Labs shows that by 2025, illegal entities will receive $141 billion in stablecoins, reaching a five-year high, with sanction-related activities accounting for 86% of illegal crypto fund flows. Actors such as Iran and North Korea are using stablecoins like USDT for financing weapons of mass destruction and cross-border sanctioned payments.The FATF warns that peer-to-peer transfers conducted through non-custodial wallets represent a key vulnerability, as these transactions can bypass anti-money laundering controls. The FATF urges countries to impose anti-money laundering obligations on stablecoin issuers and consider requiring them to have wallet freezing capabilities and to restrict certain functionalities of smart contracts. The current market capitalization of stablecoins has exceeded $300 billion.

According to Coinpost, the Financial Services Agency of Japan is considering investigating the operators related to "SANAE TOKEN." According to Japan's Fund Settlement Act, issuing virtual currencies requires obtaining a registration license for cryptocurrency trading businesses, but it has not yet been confirmed whether the companies involved in the token issuance have completed the registration. Since the token uses the name of the current Prime Minister, it has a significant social impact, and the Financial Services Agency may conduct fact-checking regarding the suspicion of unregistered issuance.Reports indicate that "SANAE TOKEN" was announced for issuance on February 25 by the official account of the YouTube channel "NoBorder," described as an incentive token aimed at updating the democratic system project. Although the issuer claims to have completed legal arrangements and that there is no illegality, the use of the name and illustrations of the current Prime Minister Sanae Takaichi on the website, along with implications of obtaining her approval, has sparked criticism both inside and outside the industry.Previously, Prime Minister Takaichi posted on social media platform X on March 2, denying any association with the token, and the Prime Minister's office also issued a statement saying that "no approval has been granted."

According to market news, Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York has dismissed the class action lawsuit against Uniswap Labs and its founder Hayden Adams. This ruling ends a long-standing legal attempt to hold DEX developers accountable for "fraud tokens" traded on their platform.In her ruling, the judge stated that holding the creators of smart contract code responsible for third-party abuses of decentralized platforms is "illogical," and emphasized that merely providing a platform does not equate to substantial assistance in fraud. Since the plaintiffs failed to present valid legal claims even after multiple amendments to the complaint, the judge decided to "dismiss the case with prejudice," meaning the plaintiffs cannot sue again on the same grounds.Uniswap's General Counsel Brian Nistler stated that this ruling sets an important precedent for the DeFi industry, reaffirming that developers are not responsible for illegal activities conducted by third parties using open-source code.

TRM Labs released a report indicating that artificial intelligence is profoundly changing the landscape of digital financial transactions, with illicit cryptocurrency flows reaching $158 billion by 2025, and AI-driven fraud activities growing at an annual rate of approximately 500%.The report highlights that autonomous AI agents have significantly compressed the time required for money laundering and cross-chain asset transfers. By automating the splitting of funds, selecting optimal bridging paths, and executing exchanges on decentralized platforms, these agents can obscure the trail of funds in just seconds.Overall, the 150 hacking incidents that occurred in 2025 resulted in losses of $2.87 billion, with the speed of fund dispersal playing a crucial role in the outcome of a $1.46 billion theft from a major exchange.

According to Cointelegraph, stablecoin issuer Tether has frozen approximately $4.2 billion worth of USDT tokens related to suspicious criminal activities over the past three years.The report states that most of the frozen funds were restricted starting in 2023, coinciding with increased scrutiny from regulators and law enforcement on cryptocurrency-related fraud and sanctions evasion. Tether can freeze tokens by directly blacklisting wallet addresses on the blockchain in response to regulatory requirements. On Tuesday, Tether announced that it assisted the U.S. Department of Justice in seizing nearly $61 million worth of USDT related to "pig butchering" scams. Earlier this month, the company also froze approximately $544 million in cryptocurrency at the request of Turkish authorities, which is related to alleged illegal online gambling and money laundering activities.

According to Reuters, Tether stated that it has frozen approximately $4.2 billion USDT due to "association with illegal activities," with about $3.5 billion occurring since 2023; this week it assisted the U.S. Department of Justice in freezing nearly $61 million USDT related to "pig-butchering" scams. Tether claimed it can remotely freeze USDT in user wallets at the request of law enforcement agencies.

According to Jinshi, U.S. lawmakers are calling for an investigation into Binance regarding illegal financial risks.

The Dutch gambling regulator has determined that Polymarket is providing gambling services to Dutch users without obtaining local licenses, violating the Gambling Act, and has demanded that it cease related operations.The regulator stated that Dutch users can register, deposit, and place bets on the platform, constituting a "games of chance" that requires a license to operate. If not rectified as required, Polymarket may face fines of up to €420,000 per week, with a maximum of €840,000. Polymarket argues that it is a prediction market, but the regulator has dismissed this claim.

According to CoinDesk, a recent report from blockchain intelligence company TRM Labs indicates that the total transaction volume of stablecoins is expected to reach at least $35 trillion by 2025 (an increase of nearly 20% from $27.5 trillion in 2024), with the proportion of illegal activities remaining below 0.5% (approximately 0.4%).The report points out that illegal entities received about $141 billion through stablecoins (the highest in five years), but this is primarily highly concentrated in sanctions evasion and large-scale money laundering networks. Sanction-related activities account for 86% of all illegal crypto flows, with the Russia-linked ruble-pegged stablecoin A7A5 processing $72 billion in illegal inflows (dominant). Despite the absolute illegal amount rising, the declining proportion reflects explosive growth in legitimate uses (such as payments and settlements): monthly transaction volumes exceeding $1 trillion multiple times in 2025. TRM emphasizes that stablecoins have become core infrastructure, while illegal activities are highly concentrated in specific networks (such as the A7A5 ecosystem), with mainstream stablecoins (like USDT and USDC) having a very low proportion of illegal use.

The heads of the People's Bank of China and the China Securities Regulatory Commission stated that the background for the release of the "Notice on Further Preventing and Dealing with Risks Related to Virtual Currencies" (hereinafter referred to as the "Notice") is: based on summarizing previous work experiences and in conjunction with the new risk situation, the original document has been revised to form the "Notice."In addition, this notice continues the policy stance of recent years, reiterating that virtual currencies do not have the same legal status as legal tender, and that conducting virtual currency-related business activities within the country is considered illegal financial activity. Foreign entities and individuals are not allowed to illegally provide virtual currency-related services to domestic entities in any form.In response to the rapid development of real-world asset tokenization in recent years, the "Notice" emphasizes that conducting real-world asset tokenization activities within the country, as well as providing related intermediary and information technology services, which may involve illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures businesses, and illegal fundraising, should be prohibited; except for related business activities conducted based on specific financial infrastructure with the approval of the competent business authorities in accordance with laws and regulations. Foreign entities and individuals are not allowed to illegally provide real-world asset tokenization-related services to domestic entities in any form.

The Ministry of Public Security has announced that it has drafted the "Cyber Crime Prevention Law (Draft for Public Consultation)" and is now seeking public opinions. The content includes: no individual or organization shall knowingly harbor, transfer, acquire, sell on behalf of others, or conceal and disguise funds, data, or virtual property obtained from others' online illegal activities. No individual or organization shall knowingly use funds obtained from others' illegal activities to provide capital flow services using virtual currency or other online virtual properties.

The Ministry of Public Security has announced that it has drafted the "Cyber Crime Prevention Law (Draft for Comments)" and is now publicly soliciting opinions from society, with the deadline for feedback set for March 2, 2026. The content includes: no individual or organization shall knowingly harbor, transfer, acquire, sell on behalf of others, or conceal or disguise funds, data, or virtual property obtained from others' online illegal activities.No individual or organization shall knowingly use funds obtained from others' illegal activities to provide capital flow services using virtual currency or other online virtual property for others.

According to Decrypt, the cryptocurrency exchange Coinbase has filed a formal complaint with the Australian Parliament, accusing the country's four major banks (Commonwealth Bank, Westpac, ANZ, and NAB) of systematically refusing to provide financial services to legitimate crypto companies, stating that this practice has evolved into a "systemic feature"; given that the four major banks control the majority of transaction accounts and payment channels, this account closure effectively constitutes an "illegal regulatory ban," excluding the legitimate industry from the formal economy.The complaint cites data indicating that up to 60% of fintech companies faced bank refusals in 2021, and this issue remains unresolved. Coinbase urges lawmakers to mandate banks to implement five transparency measures, including requiring banks to document and inform customers of the reasons for account closures, ensuring affected customers can resort to internal dispute resolution processes, providing at least 30 days' notice before closing core services, and conducting self-compliance certifications. These measures were proposed by the Australian Financial Regulator in 2022 but have yet to be legislated.

According to market news, Nikolay Shulginov, chairman of the Russian Energy Committee, stated that illegal cryptocurrency mining causes losses of over 20 billion rubles (approximately 250 million USD) annually to the Russian economy and energy sector, leading to power shortages, grid overloads, and affecting other users, including social facilities and newly built residential areas.Russia has legalized cryptocurrency mining since the end of 2024, requiring practitioners to register with the Federal Tax Service and pay taxes, but currently, less than one-third of practitioners have completed the registration. This week, the State Duma submitted a bill proposing to impose administrative fines of up to 2 million rubles for illegal mining, with repeat offenders facing fines of up to 10 million rubles. Shulginov further suggested introducing criminal liability, and the Ministry of Justice has also proposed imprisonment or "forced labor" for unregistered miners.In addition, the Duma has passed a bill in the first reading that authorizes the Ministry of Finance to regulate the cryptocurrency market (including mining) to eliminate administrative barriers and increase the industry registration rate.

According to DLNews, the Daegu District Court in South Korea sentenced the 41-year-old head of an illegal cryptocurrency exchange to five years in prison for laundering $1 million for an overseas voice scam gang using USDT. A 35-year-old employee of the exchange was also sentenced to two years and eight months in prison.The criminal gang contacted victims via Telegram, posing as law enforcement and family members to trick them into transferring money, which was then quickly exchanged for USDT, all within an hour, preventing banks from freezing the accounts in time. Judge Lee Yong-cheol described this as a "serious crime" and pointed out that the defendant took no measures to compensate the victims for their losses. South Korean lawmaker Kim Seong-jun called for stronger regulation of stablecoins to address new types of foreign exchange crimes.

According to Yonhap News Agency, the Seoul Customs Office in South Korea recently uncovered a group involved in illegal foreign exchange trading using domestic and foreign cryptocurrency accounts, with an amount involved reaching 148.9 billion won (approximately 11.3 million USD). The group collected payments through WeChat Pay and Alipay, then purchased foreign cryptocurrencies to transfer to local wallets and cash out, suspected of violating the Foreign Exchange Transaction Act. The case has been referred to the prosecution for handling.Three suspects include a Chinese male in his 30s. Their business covers areas such as trade, studying abroad, and medical beauty, even attracting clients by exchanging currency for surgical fees.

According to a report by The Paper, Xunlei has filed a lawsuit against former CEO Chen Lei and his core team, accusing them of harming the company's interests, with a claim amounting to 200 million yuan. The case has been accepted and filed by the relevant court in Shenzhen. Chen Lei recruited his hometown friends and close associates through Xunlei's former senior vice president Dong Xue, placing them in key positions within the company. They allegedly used illegal means such as fabricating transaction links and creating false contracts to siphon off company funds, involving a substantial amount.The new management has already conducted a cleanup and adjustment of Xunlei's related businesses and personnel. In addition, Chen Lei is also suspected of misappropriating tens of millions of company funds for illegal cryptocurrency trading, which is explicitly prohibited by the state.Chen Lei joined Xunlei as Chief Technology Officer in 2014 and was promoted to CEO in 2017. In 2020, Xunlei dismissed him on suspicion of embezzlement. Subsequently, the Shenzhen Public Security Bureau initiated an investigation into Chen Lei and others suspected of embezzlement. To evade investigation, Chen Lei and former senior vice president Dong Xue have left the country.

According to a report by The Paper, Xunlei has filed a lawsuit against its former CEO Chen Lei and his core team, accusing them of harming the company's interests, with a claim amounting to 200 million yuan. The case has been accepted and filed by the relevant court in Shenzhen. Chen Lei recruited his hometown friends and close associates through Xunlei's former senior vice president Dong Xue, placing them in key positions within the company. They allegedly used illegal means such as fabricating transaction links and creating false contracts to siphon off company funds, involving a substantial amount.The new management has already conducted a cleanup and adjustment of Xunlei's related businesses and personnel. In addition, Chen Lei is also suspected of embezzling tens of millions of company funds for illegal cryptocurrency trading, which is explicitly prohibited by the state.Chen Lei joined Xunlei in 2014 as the Chief Technology Officer and was promoted to CEO in 2017. In 2020, Xunlei dismissed him on suspicion of embezzlement. Subsequently, the Shenzhen Public Security Bureau launched an investigation into Chen Lei and others suspected of embezzlement. To evade investigation, Chen Lei and former Xunlei senior vice president Dong Xue have left the country.

Whale Alert data shows that on January 11, Tether froze over $182 million in USDT within 24 hours, targeting 5 Tron chain wallets, with individual amounts ranging from $12 million to $50 million.Although cryptocurrencies are designed to be censorship-resistant, stablecoins, which account for 60% of the market, are highly centralized. Tether has the ability to instantly freeze funds at the smart contract level and frequently collaborates with the U.S. Department of Justice, FBI, and Secret Service for enforcement.Chainalysis data indicates that by the end of 2025, stablecoins will account for 84% of all illegal transaction volume. An AMLBot report states that from 2023 to 2025, Tether froze approximately $3.3 billion in assets and blacklisted 7,268 wallet addresses. Nevertheless, the market capitalization of USDT still reaches $187 billion, accounting for 60% of the stablecoin market.

The People's Procuratorate of Pudong New District, Shanghai, disclosed a case involving an illegal industry chain that queries and sells citizens' location information. The individuals involved settled through the exchange of virtual currency, profiting illegally from it.Judicial appraisal shows that the illegally queried location information amounts to over 1,000 entries, with a total illegal profit of approximately 1.17 million yuan. Currently, the related individuals have been sentenced to fixed-term imprisonment ranging from three years and six months to one year, with fines ranging from 500,000 yuan to 40,000 yuan.