Crypto regulation in the world: weekly digest #26

The FTX update

Sam Bankman-Fried, the former FTX exchange’s CEO pleaded not guilty to the charges brought against him by the US prosecutors. The federal prosecutors unsealed eight criminal charges such as wire fraud, misappropriation of crypto exchange customers' money, and money laundering.

Sam Bankman-Fried and former head of Alameda Research investment firm Caroline Ellison is accused of illegally using money from FTX crypto exchange clients to cover Alameda’s debts, real estate purchase for personal purposes, and financing the US Democratic Party.

This week information emerged that several members of the US Democratic Party and campaign committees are also currently under investigation by federal prosecutors over FTX donations. Bankman-Fried donated a lot of money to the Democrats, of which about $5 million went to the Joe Biden’s election campaign.

Caroline Ellison and FTX co-founder Gary Wong have already pleaded guilty and are cooperating with the investigation. The judge scheduled the next hearing for October 10. By that time, the public will have forgotten about this scandal, which will give the accused additional bonuses in court.

Unfortunately, some FTX lenders may not make it to October 2023. One of the largest – Genesis Global Trading issued Alameda Research loans for hundreds of millions of dollars and now the company is considering filing for bankruptcy, in accordance with Article 11 of the US Code. The company is pursuing layoffs and has already laid off almost 50% of its staff.


Following several major shocks of cryptocurrencies market in the US Congress are discussing some bill proposals on crypto regulation.

  • the Responsible Financial Innovation Act, which proposes a comprehensive regulatory framework for regulating digital financial assets in the United States.
  • the Digital Asset Anti-Money Laundering Act that will introduce mandatory know-your-customer (KYC) rules for crypto market participants and will prohibit financial institutions from making transactions using mixers.
  • The US stablecoins bill that would allow nonbanks to issue stablecoins provided they adhere to the tougher oversight but would prohibit companies from issuing their own stablecoins.

Since none of these bills have yet been passed, Congress is concerned about the lack of adequate regulation and is calling for them to be finalized as soon as possible. It is also expected to amend the legislation with several proposals that will allow the application of the current rules of banking, securities and taxation to companies working with cryptocurrencies. The Congress is also calling on the Securities and Exchange Commission (SEC) to act more strongly on the cryptocurrency market this year to prevent a recurrence of the situation that happened with the FTX exchange.

News from other countries:

  • In Israel, the government proposes to create a special body that will supervise cryptocurrency companies. Now there are more than 150 VASPs operating in the country, and cryptocurrencies are becoming increasingly popular. The new structure will be created based on the Israel Securities Authority.
  • Morocco will soon introduce its first cryptocurrency bill. It has already been developed by the local Central Bank, and it is planned to be discussed with all market participants.
  • The Italian parliament has passed a bill on taxation of transactions with cryptocurrencies. From now, users will have to pay 26% of the profits received from cryptocurrency trading. Previously, Portugal also raised taxes on operations with cryptocurrencies.
  • One of the largest investment companies in the world, BlackRock, is adding Bitcoin to its «Global Allocation Fund» portfolio.
  • There are more and more rumors about problems with the Huobi cryptocurrency exchange. Users withdraw funds, and according to Nansen, 51% of the exchange's reserves are placed in the native token HT, as well as TRX and HBETH.

We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!

The TokenScope Team
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