USA
Caroline Ellison, CEO of the investing firm Alameda Research, has been sentenced to two years in prison for her involvement in the massive fraud associated with the now-defunct cryptocurrency exchange FTX. Ellison, who is a key figure in the FTX scandal, pleaded guilty to seven felony counts of fraud and conspiracy shortly after the collapse of FTX in 2022, crimes that carried a maximum penalty of 110 years in prison.
Judge Kaplan acknowledged Ellison's significant cooperation with prosecutors, which included her testimony against Sam Bankman-Fried, the founder of FTX, who was sentenced to 25 years for his role in the fraud. Her cooperation was described as «extraordinary» and crucial in securing Bankman-Fried's conviction.
During her sentencing, Ellison expressed deep remorse for her actions. Judge noted the gravity of the fraudulent activities but also recognized Ellison's honesty and willingness to cooperate. He remarked on the distinction between her actions and those of Bankman-Fried, highlighting that she cooperated while he denied any wrongdoing.
Right now FTX is in the process of repaying its debts, with a significant repayment plan underway. FTX owes approximately $11.2 billion to its creditors. On August 8, 2024, a U.S. court ordered FTX to pay $12.7 billion to its customers as part of a settlement with the CFTC. This includes $8.7 billion in restitution and $4 billion in disgorgement aimed at further compensating victims of the collapse.
Repayments were expected to begin shortly after court approvals, with significant distributions anticipated during three upcoming hearings scheduled for October, November, and December. However, according to recently revised bankruptcy filings FTX creditors will only get back 10-25% of their crypto holdings, and distributions could spill out as late as Q2 2025. Rumors that FTX will start distributing funds on September might be incorrect. This repayment process is a critical step in addressing the fallout from FTX's collapse, which left many investors and customers facing significant financial losses.
UAE
Dubai's Virtual Assets Regulatory Authority – VARA - has introduced new advertising regulations for cryptocurrency, effective October 1, 2024. These guidelines aim to enhance transparency and protect consumers in the rapidly growing virtual asset market. All promotional materials must include a prominent disclaimer about the risks associated with investing in virtual assets, clearly stating that these assets can lose value and are subject to high volatility. Entities involved in crypto marketing must adhere to all applicable UAE laws and regulations, including those related to advertising, data protection, and consumer protection. They must also obtain necessary approvals and licenses from VARA. Marketing messages must be fair, clear, and not misleading. Any claims suggesting that investments are safe or guaranteed returns are prohibited. Additionally, tactics that create urgency or fear of missing out are also banned. Companies must maintain records of all marketing activities for at least eight years and ensure third-party marketers comply with these regulations. The rules apply to all entities involved in marketing virtual assets, regardless of their licensing status with VARA. This includes a focus on ethical considerations in marketing practices. As the implementation date approaches, virtual asset service providers (VASPs) will need to adapt their marketing strategies to comply with these new standards, ensuring they effectively communicate potential risks to investors.
Hong Kong
Hong Kong is taking steps to align its cryptocurrency regulations with European standards, particularly in the realm of over-the-counter derivatives. This initiative is spearheaded by the Hong Kong Monetary Authority and the Securities and Futures Commission, which have announced plans to harmonize their reporting requirements with those established by the European Securities and Markets Authority (ESMA). The new rules are set to take effect on September 29, 2025. This timeline allows stakeholders adequate time to adapt to the changes. The regulations will require the use of Unique Transaction Identifiers for reporting crypto derivatives. By adopting these identifiers, Hong Kong aims to facilitate international standardization and improve cross-border data sharing. The HKMA and SFC are also adopting the ISO 20022 XML message standard for reporting, which is widely supported in the industry. Hong Kong's approach not only aligns with European practices but also seeks to refine and adapt these regulations to better suit its local market dynamics. This strategy positions Hong Kong as a potential global hub for crypto derivatives, leveraging European expertise while tailoring rules to attract international investors.
News from other countries:
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The U.S. OFAC has sanctioned two Russian-originated cryptocurrency exchanges, Cryptex and BTC2PM, for their alleged roles in facilitating cybercrime, particularly money laundering linked to ransomware operations. This action is part of a broader international effort, termed Operation Endgame, aimed at disrupting the financial networks supporting cybercriminal activities.
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Russian State Duma approved significant amendments to the Tax Code, which will notably affect the taxation of cryptocurrency mining operations. A key feature of these changes is the establishment of a special registry managed by the tax revenue service specifically for companies engaged in cryptocurrency mining. We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!