illegal

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.

The People's Procuratorate of Pudong New District, Shanghai, has disclosed a case involving an illegal industry chain for querying and selling citizens' location information.The individuals involved settled through the exchange of virtual currency, profiting illegally. Judicial identification shows that over 1,000 pieces of illegally queried location information were involved, with a total illegal profit amounting to approximately 1.17 million yuan. Currently, the relevant personnel 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.

Chainalysis released a research report indicating that by 2025, the activities of nations in the cryptocurrency sector tracked by them will have significantly increased. Illegal organizations are now operating large-scale on-chain infrastructures that assist transnational crime networks in acquiring goods and services, as well as laundering their illegally obtained cryptocurrencies.Data shows that in 2025, illegal cryptocurrency transactions will reach at least $154 billion. This represents a 162% increase from the previous year, primarily due to a 694% surge in amounts received by sanctioned entities. However, even if the amounts received by sanctioned entities remain the same as the previous year, 2025 will still be a record year for cryptocurrency crime, as activities in most categories of illegal crime have increased. Additionally, stablecoins dominate the illegal trading sector, currently accounting for 84% of all illegal transaction volume.

Guided by the Chinese Criminal Law Research Association and the Shanghai High Court, the Shanghai Second Intermediate People's Court and the Law School of Renmin University of China jointly hosted a seminar on criminal trials, focusing on the theme of "Legal Uniformity in Cases Involving Virtual Currency Crimes." The discussion content is summarized as follows:The determination of "subjective knowledge" in virtual currency money laundering crimes should be assessed comprehensively to prevent objective attribution of guilt.The identification of the types of acts and standards for completion in virtual currency money laundering crimes involves: first, accurately grasping the essence of the crime, which is "concealing and disguising the source and nature of criminal proceeds and their profits"; second, the acts of concealing and disguising criminal proceeds and their profits, as stipulated in the elements of the money laundering crime, constitute the completion of the crime; third, strictly combating money laundering crimes in accordance with the law to resolutely safeguard national financial security.The determination of illegal operation crimes involving virtual currency indicates that if the behavior does not possess characteristics of business operations and merely involves personal holding or trading of currency, it is generally not recognized as illegal operation. However, if the individual is aware that others are illegally buying or selling or indirectly trading foreign exchange and still provides assistance through the exchange of virtual currency, and the circumstances are serious, they should be recognized as an accomplice in illegal operation crimes.

The American law firm Burwick Law announced a litigation update stating that the plaintiffs have submitted a revised complaint today in federal court, accusing the operator of pump.fun, Baton Corp, as well as the Solana Foundation, Solana Labs, and several executives of violating the Racketeer Influenced and Corrupt Organizations Act (RICO).

According to the Hong Kong Securities and Futures Commission (SFC), the SFC has condemned Saxo Financial (Hong Kong) Limited (Saxo) and imposed a fine of HKD 4 million due to Saxo's deficiencies in distributing non-SFC approved virtual asset funds and virtual asset-related products (collectively referred to as virtual asset products) on its online trading platform (online platform). During the period from November 1, 2018, to November 25, 2022 (the relevant period), Saxo allowed retail clients to buy and sell several virtual asset products on the online platform.According to two circulars issued by the SFC to intermediaries that took effect at critical times, these products should only be sold to professional investors. The SFC's investigation found that during the relevant period, Saxo executed 1,446 transactions on the online platform for six individual professional investors and 130 retail clients, involving 32 virtual asset products. All of the relevant products were classified as complex products, including 21 exchange-traded derivative products (exchange-traded virtual asset products).Before executing these transactions, Saxo did not assess whether clients had the knowledge to invest in virtual asset products, nor did it provide sufficient information to clients and specifically warn clients about virtual assets, thus failing to comply with the guidelines set out in the two SFC circulars.

U.S. Senator Cynthia Lummis posted on the X platform that the market structure bill she is promoting will combat illegal financial activities through public-private partnerships while fostering the development of crypto innovation under the premise of protecting American consumers.

The Russian Ministry of Justice recently submitted a draft amendment to the Criminal Code aimed at combating unregistered illegal cryptocurrency mining activities in the country.According to the draft, illegal mining activities will face fines of up to 1.5 million rubles (approximately $19,000) or up to two years of compulsory labor. If illegal mining activities involve substantial profits, the maximum prison term can reach 5 years, along with fines of up to 2.5 million rubles (approximately $31,800) or 480 hours of compulsory labor. The amendment also sets penalties of up to 5 years of imprisonment or compulsory labor for substantial profits realized by illegal "organized groups." Russian Deputy Finance Minister Ivan Chebeskov stated that as of June 19, 2025, only about 30% of cryptocurrency miners have completed registration and achieved operational legalization, while most practitioners remain in the "gray area." According to current regulations, individual miners with a monthly electricity consumption of less than 6,000 kilowatt-hours are not required to register but still need to pay personal income tax.

The Federal Court ruled that NGS Group Limited and its affiliates NGS Crypto and NGS Digital operated financial services illegally without holding an Australian Financial Services License (AFS), and they have now been permanently banned from engaging in related activities and ordered to be liquidated.It is reported that approximately 450 Australian investors invested around AUD 59 million through these companies, most of which were made through self-managed superannuation funds encouraged by NGS. The court has appointed professionals from McGrath Nicol as liquidators to handle the company's assets and return funds to investors as much as possible. ASIC Deputy Chair Sarah Court stated that NGS completely disregarded Australian financial services laws, leaving investors without basic protections. ASIC's investigation into the company and its directors is still ongoing.

The Russian police have detained 7 employees of "Russian Grids Moscow Region" (Россети Московский регион), who are suspected of assisting in illegal cryptocurrency mining operations within the Moscow region.The arrested individuals hold positions ranging from ordinary electricians to senior engineers. Investigators claim that these utility company employees provided paid services to illegal mining sites, including artificially lowering electricity meter readings and helping to evade scheduled and unscheduled inspections. According to the Russian Ministry of Internal Affairs, the preliminary economic damage caused by these actions is estimated at around 10 million rubles.