UpGate

Tag: Regulation & Policy

  • UK Defers Capital Gains Tax on Crypto in DeFi, Effective 2027

    UK Defers Capital Gains Tax on Crypto in DeFi, Effective 2027

    HM Revenue & Customs (HMRC) has reported a significant shift in the UK’s tax policy, deferring Capital Gains Tax (CGT) on cryptoassets deposited into Decentralized Finance (DeFi) lending protocols and liquidity pools. This change, effective from April 6, 2027, will amend the Taxation of Chargeable Gains Act 1992, moving away from previous guidance that treated such deposits as taxable disposals.

    Under the new rules, depositing cryptoassets into DeFi lending protocols and liquidity pools will no longer be considered a taxable disposal. Instead, CGT will be deferred until a genuine economic disposal of the assets occurs. This ‘no gain, no loss’ treatment applies to several DeFi activities, including lending a single cryptoasset, borrowing one, and supplying tokens to automated market makers. Consequently, entering or exiting these arrangements using the same asset will not trigger a tax event.

    A taxable gain or loss will now arise only upon a real disposal of the assets. In the context of liquidity pools, a tax event is triggered if a user withdraws a different quantity of tokens than they initially deposited. Furthermore, collateral posted to borrow against cryptoassets will also be disregarded for CGT purposes.

    HMRC estimates that this policy change will affect approximately 700,000 individuals and trustees. This update addresses concerns raised by stakeholders regarding disproportionate administrative burdens, aiming to align tax treatment more closely with the economic realities of DeFi transactions. Previously, under HMRC’s 2022 guidance, the act of moving tokens into a DeFi arrangement could itself be deemed a disposal, potentially triggering CGT even before any sale of the underlying asset.

    The legislative process for this change has been ongoing, starting with a call for evidence in 2022, followed by a consultation in 2023, and a summary of responses published at Budget 2025. The measure’s final costing is subject to certification by the Office for Budget Responsibility.

    Industry figures have reacted positively to the development. Stani Kulechov, founder of Aave, described the approach as being “the right direction,” suggesting that alternative treatments would have imposed significant paperwork on taxpayers. Kulechov also noted this outcome as an example of how industry feedback can influence policy, drawing a parallel to past industry input on a £20,000 cap for individual stablecoin holdings. He also highlighted separate HMRC plans to tax stablecoins more akin to traditional currency.

    The shift signifies a maturing regulatory landscape for DeFi in the UK, with the growing body of tax rules reflecting the sector’s development. While the new rules are set to take effect in April 2027, providing users and protocols with over a year to adapt, the final costing requires official certification.

    Why This Matters

    The materials describe a narrow update: HMRC has reported that depositing cryptoassets into DeFi lending protocols and liquidity pools will no longer be considered a taxable disposal. The measure’s final costing still needs certification by the Office for Budget Responsibility.

    Broader Context

    Source materials place the factual news in this context: The UK’s HM Revenue & Customs has reported that depositing cryptoassets into DeFi lending protocols and liquidity pools will no longer count as a taxable disposal, deferring any capital gains tax until an investor makes a genuine economic disposal of the assets.

  • U.S. Government Transfers Seized Crypto to Coinbase Prime Amid Unexplained Ambiguity

    U.S. Government Transfers Seized Crypto to Coinbase Prime Amid Unexplained Ambiguity

    The U.S. government has transferred approximately $288 million worth of seized Bitcoin and Ethereum to Coinbase Prime, according to on-chain tracker Arkham. The exact purpose of this transfer remains officially unexplained, leading to market speculation.

    The transaction, which occurred on Monday, July 13, 2026, involved roughly 3,800 BTC valued at $235 million and about 30,000 ETH valued at $53 million. The Bitcoin originated from funds seized in criminal cases linked to Ryan Farace, known as “Xanaxman,” and the defunct exchange BTC-e. These assets were routed through intermediary wallets before reaching Coinbase Prime. The Ethereum was tied to a money-laundering case involving Oracle employee Brian Krewson and was sent directly to a deposit address.

    Coinbase Prime was selected by the U.S. Marshals Service in 2024 to custody and trade forfeited digital assets. This established relationship suggests the transfers could represent the government moving assets into managed custody. However, the absence of a public explanation for these specific transfers has led some market observers to interpret them as a potential signal for a sell-off.

    “It’s not yet clear whether these inflows are in preparation for a sale or simply for the consolidation and custody of seized assets,” said Tim Sun, Senior Researcher at crypto exchange HashKey. He noted that large holders typically keep coins in cold storage, making such movements a subject of scrutiny.

    The context of these transfers is influenced by recent government initiatives. U.S. President Donald Trump’s executive order in March 2025 established a Strategic Bitcoin Reserve, stipulating that Bitcoin deposited into it “shall not be sold.” Crucially, the coins moved on Monday originated from active criminal cases and are handled separately from this reserve. Only Bitcoin that has “completed the final forfeiture process” is eligible for the reserve, with court-directed exceptions for law enforcement or victim restitution.

    Ethereum, unlike Bitcoin, is not subject to the Strategic Bitcoin Reserve’s rules. It falls under a separate Digital Asset Stockpile managed by the Treasury Department, which grants the government “greater freedom of disposal,” according to Sun.

    Adding to the complexity, the Strategic Bitcoin Reserve itself faces administrative and legislative uncertainty. Bills aimed at codifying the reserve with a 20-year holding rule have stalled in Congress, and the Treasury and Commerce departments are reportedly contesting control over these assets. Arkham continues to track U.S. government wallets holding approximately $20.6 billion in crypto, including 324,552 BTC, indicating that the $288 million transfer represents a relatively small portion of the total government holdings.

    Market participants are advised to distinguish between Bitcoin held within the reserve and the broader balance-sheet holdings of the U.S. government. The current transfers stem from active criminal cases and are not directly linked to the reserve’s non-sale policy. The lack of official explanation and ongoing administrative disputes contribute to the ambiguity surrounding the government’s intentions with these seized digital assets.

    Why This Matters

    The materials describe a narrow update: The U. Whether the government intends to sell the transferred crypto.

    Broader Context

    Source materials place the factual news in this context: The U.S. government transferred $288 million in seized Bitcoin and Ethereum to Coinbase Prime on Monday, on-chain tracker Arkham showed, reviving speculation that Washington could be preparing to sell crypto it has pledged to hold.

  • FLEOA Endorses Digital Asset Market Clarity Act with Conditions on DeFi Accountability

    FLEOA Endorses Digital Asset Market Clarity Act with Conditions on DeFi Accountability

    The Federal Law Enforcement Officers Association (FLEOA) has announced its endorsement of the Digital Asset Market Clarity Act (H.R. 3633), a legislative proposal concerning digital assets and decentralized finance (DeFi). However, the endorsement comes with specific demands aimed at strengthening accountability within DeFi systems and preserving federal investigative powers, as the bill faces a legislative deadline with the Senate’s August 8 recess approaching.

    The FLEOA outlined its conditions in a letter to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. The association urged lawmakers to narrow DeFi protections, clarify accountability in DeFi, prevent firms from avoiding regulation by claiming decentralization, revise “specific intent” language for liability, and explicitly affirm that the bill does not curtail existing federal investigative powers. These demands represent key points of negotiation as the legislative session nears its recess.

    The approaching August 8 recess acts as a de facto deadline for advancing the bill this legislative session. Senator Cynthia Lummis framed the urgency on July 8, stating that passing the Clarity Act is likely the last chance to enact significant digital asset legislation before 2030. She warned that failure to pass the bill could result in other countries setting the rules for digital assets, leaving the U.S. to catch up for a decade.

    In June, concerns about Section 604 of the bill were raised by four law enforcement organizations, including the National District Attorneys Association and the National Association of Assistant United States Attorneys, prompting an invitation from the White House for a meeting in late June. During this period, the Major County Sheriffs of America shifted from opposition to a neutral stance, and the FLEOA moved towards active support with conditions.

    Further signaling support, the National Organization of Black Law Enforcement Executives (NOBLE) backed the bill nine days before the FLEOA’s statement. These sequential endorsements by law enforcement groups are being used to counter arguments that the Clarity Act would weaken the government’s ability to police crypto crime.

    Despite the FLEOA’s conditional endorsement, significant uncertainties remain regarding the bill’s final form and passage. The Banking and Agriculture Committee versions of the bill still require reconciliation before a floor vote can proceed. The outcome of negotiations concerning the FLEOA’s specific demands, particularly the DeFi liability language, will be crucial in determining the bill’s path forward.

    While proponents view the Clarity Act as progress toward balancing technological innovation with public safety, critics argue it could weaken the government’s ability to police crypto crime. For traders, the bill aims to strengthen the regulatory framework for digital assets, enhance DeFi accountability, and preserve investigators’ existing powers. The handling of DeFi liability language remains a central focus of scrutiny as legislative efforts continue.

    Why This Matters

    The materials describe a narrow update: The FLEOA announced its endorsement of the Digital Asset Market Clarity Act, a bill concerning digital assets and decentralized finance (DeFi). Whether the specific demands of the FLEOA will be incorporated into the final version of the Digital Asset Market Clarity Act.

    Broader Context

    Source materials place the factual news in this context: The FLEOA’s endorsement is conditional in practice.

  • San Francisco Protesters Demand Pause in Advanced AI Development Amid Growing Concerns

    San Francisco Protesters Demand Pause in Advanced AI Development Amid Growing Concerns

    Protesters marched through San Francisco on Saturday, targeting the offices of major artificial intelligence companies OpenAI, Anthropic, and Google DeepMind. Organized by Stop the AI Race, the demonstration called for a halt in the development of more powerful AI models and urged a greater focus on AI safety and alignment until stronger safeguards are established.

    The march extended beyond AI safety concerns, encompassing broader issues such as potential job losses, the environmental impact of AI, rising housing costs in San Francisco, and the increasing influence of large technology corporations. According to organizers, their goals have evolved from directly convincing CEOs to raising broader political awareness.

    Michaël Trazzi, a former AI researcher and organizer of the protest, told Decrypt that the group’s objectives have changed since their initial demonstration in March. “I think earlier this year I wasn’t thinking about raising political salience as much as I was thinking about convincing CEOs,” Trazzi said. “I think I’ve updated toward CEOs actually listening, given the multiple blog posts and some exchanges I had with one of them. I also think having protests is useful to show that people care.”

    This protest follows a similar event in March, which drew approximately 200 participants. Since then, the Stop the AI Race movement has continued its advocacy. Trazzi expressed encouragement regarding the growing support for the movement, noting endorsements from the NUHW (National Union of Healthcare Workers) and assistance with organizing from groups like AI Action and QuitGPT.

    Recent developments in the AI landscape have also drawn attention. In May, OpenAI introduced new safety features for ChatGPT aimed at detecting self-harm and violence in conversations. In June, the Donald Trump administration ordered Anthropic to suspend access to certain AI models due to potential cybersecurity risks. Earlier this month, the United Nations’ first independent scientific panel on AI concluded that “catastrophic harm” cannot be ruled out as AI technology advances rapidly, outpacing scientific understanding and government oversight.

    Organizers indicated plans to continue advocating for an international pause on frontier AI development and to encourage lawmakers to implement stronger oversight of advanced AI systems. OpenAI, Anthropic, and Google DeepMind did not immediately respond to requests for comment.

    Broader Context

    Source materials place the factual news in this context: Protesters again took to the streets of San Francisco, marching between the offices of OpenAI, Anthropic, and Google DeepMind, calling for a pause in the development of more powerful AI.

    Why This Matters

    Saturday’s protest highlights a growing public demand for a pause in advanced AI development and increased regulation. The demonstration, which targeted major AI companies, underscored concerns that extend beyond AI safety to include job security, environmental impact, and corporate influence. This advocacy reflects a broader societal debate about the trajectory of AI, with organizers aiming to raise political salience and encourage stronger oversight from lawmakers, as echoed by the UN’s recent warning about potential catastrophic harm from rapidly advancing AI technology.

  • New Hampshire Enacts Blockchain Laws, Establishes Dispute Docket

    New Hampshire Enacts Blockchain Laws, Establishes Dispute Docket

    New Hampshire has enacted “The Blockchain Basic Laws” (HB 639), a legislative measure designed to protect cryptocurrency innovation and establish a dedicated dispute docket for blockchain-related matters. Governor Kelly Ayotte signed the bill into law last week.

    The new legislation aims to provide legal protections for blockchain developers, businesses, and individuals engaging with digital assets. According to New Hampshire Representative Keith Ammon, the bill’s primary sponsor, the laws “protect one of the most fundamental rights in the digital economy—the right of individuals to control their own digital assets through self-custody.” He added that they “provide clear legal protections for blockchain developers, miners, validators, entrepreneurs, and businesses building the next generation of financial technology.”

    A key provision of HB 639 is the establishment of a special blockchain dispute docket in the state’s superior court, intended to create a specialized venue for resolving legal conflicts arising from blockchain technology and cryptocurrency transactions.

    This legislative action follows New Hampshire’s previous engagement with cryptocurrency. In May 2025, the state passed a bill allowing its treasurer to invest up to 5% of public funds in Bitcoin, alongside other assets like gold and silver. Representative Ammon had previously described this move as a way for the state to “hedge against inflation in the future.”

    However, the state’s executive council recently blocked a proposal that would have enabled the New Hampshire Business Finance Authority to facilitate a Bitcoin-backed municipal bond, offering a counterpoint to the legislative efforts supporting blockchain innovation.

    Representative Ammon stated, “Today, with the signing of HB 639, we have taken another major step by enacting one of the most comprehensive blockchain rights laws in the country.”

    Why This Matters

    The enactment of HB 639, known as The Blockchain Basic Laws act, signifies New Hampshire’s legislative efforts to protect digital asset control and provide legal clarity for blockchain-related activities.

    Broader Context

    Governor Kelly Ayotte’s signing of HB 639 places it within the context of New Hampshire’s recent legislative actions concerning cryptocurrency, including a prior bill allowing state investment in Bitcoin.

  • Democrats Harden Opposition to Clarity Act as Crypto Bill Faces Deadline

    Democrats Harden Opposition to Clarity Act as Crypto Bill Faces Deadline

    Senate Democrats Launch Fierce Opposition to Sweeping Crypto Bill as it Nears Final Vote

    Key Democratic senators are mounting a vigorous campaign against the Clarity Act in its current form, as the expansive cryptocurrency legislation approaches a critical final legislative hurdle.

    On Monday, Senator Elizabeth Warren (D-MA) penned a letter to Senate leadership, advocating for the inclusion of provisions that would prohibit President Donald Trump and his family from profiting from the cryptocurrency sector. These restrictions have not yet been incorporated into the bill, despite recent disclosures revealing the president’s substantial earnings of over $1.2 billion from crypto ventures last year.

    “The crypto legislation heading to the Senate floor must prevent the president, vice president, senior administration officials, members of Congress, and their families from profiting off the crypto industry,” Warren stated. “Anything less would be a flagrant giveaway to the president and his family at the expense of the public.”

    On Tuesday, several other Senate Democrats, including potential 2028 presidential candidates Chris Murphy (D-CT) and Chris Van Hollen (D-MD), are scheduled to hold a press conference to voice their opposition to the Clarity Act. The event is expected to highlight not only the president’s cryptocurrency dealings but also the bill’s potential to broadly weaken financial oversight.

    While industry stakeholders contend that the Clarity Act, by legalizing most crypto activities in the United States, would enhance regulation of the nascent sector, critics argue it would significantly undermine financial regulations established in the aftermath of the Great Depression. They contend the bill would create exemptions for blockchain-based assets within these long-standing rules.

    The bill, which has been under consideration on Capitol Hill for over a year, now faces a decisive final push. Most involved parties agree that its passage is imperative before Congress’s upcoming August recess. Failure to do so risks the bill becoming entangled with the looming November midterm elections and the potential for shifts in control of the House and Senate.

    This leaves less than four weeks to secure the bill’s passage, with several key language-related issues still unresolved.

    Further complicating the legislative landscape is the dwindling number of active Republican senators. Mitch McConnell (R-KY) remains hospitalized following a health incident last month, and Lindsey Graham (R-SC) passed away unexpectedly over the weekend, though he is slated to be replaced.

    The Clarity Act requires a 60-vote majority in the Senate, necessitating the support of at least seven Democrats, and potentially more.

    On Monday, President Trump urged the Senate to pass the Clarity Act in tribute to the late Senator Graham, whom Trump described as a “big supporter” of cryptocurrency legislation. However, Graham was not directly involved in negotiations concerning the Clarity Act and rarely commented on the subject. Notably, he was the sole Senate Republican to co-sponsor the 2023 Digital Asset Anti-Money Laundering Act, a bill that cryptocurrency groups had criticized as “very anti-crypto.”

  • Ripple Achieves Full MiCA CASP Authorization, Highlighting European Crypto Market Compliance Divide

    Ripple Achieves Full MiCA CASP Authorization, Highlighting European Crypto Market Compliance Divide

    Ripple has secured full Crypto-Asset Service Provider (CASP) authorization under the Markets in Crypto-Assets (MiCA) regulation from Luxembourg’s financial regulator, the CSSF. This development, reported last week, positions Ripple as one of a limited number of digital asset firms to achieve full authorization ahead of the July 1, 2026, deadline, and underscores a growing compliance gap within the European crypto market.

    The MiCA regulation mandates that crypto firms operating within the European Economic Area (EEA) must secure full CASP authorization. Firms that were in the transitional period for Virtual Asset Service Providers (VASPs) without completed authorization by the July 1, 2026, deadline will be required to cease serving EEA customers. This regulatory cutoff is creating a clear bifurcation in the market, separating authorized entities from those that are not.

    Ripple’s regulatory standing in Europe is bolstered by its dual licenses: an Electronic Money Institution (EMI) license, which governs fiat and e-money activities, and the newly secured CASP authorization, which covers crypto-asset services such as custody and exchange. According to Ripple’s press release, this combination enables “end-to-end regulated crypto payments” for financial institutions, corporates, and businesses across all 30 EEA countries.

    Broader Context

    Source materials place the factual news in this context: MiCA (Markets in Crypto-Assets) regulation.

    Ripple’s Strategic Advantage

    Cassie Craddock, Managing Director for UK and Europe at Ripple, stated, “This CASP authorization means Ripple enters the post-transitional MiCA era fully compliant and ready to scale.” She added that institutions across Europe are looking to build their digital asset services alongside regulated partners, and Ripple is licensed and prepared to meet this demand.

    The stringent requirements for CASP authorization under MiCA include prudential capital requirements, organizational controls, senior management accountability, and ongoing supervisory obligations. These demands present a significant challenge for many crypto firms, particularly smaller operators who may lack the substantial institutional compliance infrastructure that Ripple brought to the process.

    Approximately 210 firms are reported to have reached MiCA-compliant status ahead of the July 1 cutoff, though this figure carries medium confidence. Ripple itself holds over 75 regulatory licenses globally, demonstrating a long-standing focus on regulatory compliance.

    Market Bifurcation and Divergence

    The practical result of the MiCA deadline is a market division. Crypto exchanges, custodians, and payment processors that have not secured full CASP authorization face an immediate choice: accelerate their authorization process or withdraw from the region. Firms that built their European presence on lighter-touch VASP registrations are now being asked to meet a substantially higher regulatory bar.

    In contrast to Ripple’s compliance, Tether CEO Paolo Ardoino has stated that Tether did not apply for a MiCA license, describing the regulation as “very dangerous when it comes to stablecoins.” He indicated that the rules could force issuers to park a significant portion of reserves in “uninsured cash deposits.”

    The European crypto regulation is setting a global precedent, influencing regulatory frameworks in other regions. While MiCA tightens the EEA perimeter, other jurisdictions are developing their own approaches, such as the CLARITY Act in the US, which pushes toward a comparable digital asset classification framework.

    Uncertainties remain regarding the exact number of crypto firms that failed to meet the July 1 MiCA deadline and are now exiting or accelerating their authorization. The specific implications for firms currently in the application process are also unclear, as is the long-term impact of this market bifurcation on innovation and competition within the European crypto sector. However, it is clear that any crypto firm still operating in Europe without CASP authorization is either actively pursuing an application or managing a withdrawal; there is no third option under MiCAR.

  • Thailand’s Central Bank Uses Data Analytics to Screen Stablecoin Transactions for Illicit Activity

    Thailand’s Central Bank Uses Data Analytics to Screen Stablecoin Transactions for Illicit Activity

    The Bank of Thailand is employing data analytics to scrutinize stablecoin transactions, particularly those involving Tether’s USDT, as part of a broader initiative to combat the ‘grey economy’ and illicit financial flows. This move signals a proactive approach by the central bank to enhance financial surveillance in the digital asset space.

    Why This Matters

    The materials describe a narrow update: The Bank of Thailand is employing data analytics to monitor stablecoin transactions, specifically USDT, for signs of money laundering or attempts to bypass disclosure rules. The exact nature and volume of flagged stablecoin transactions.

    Broader Context

    Source materials place the factual news in this context: The Bank of Thailand Governor Vitai Ratanakorn said the central bank has begun screening abnormally large stablecoin transactions, particularly in Tether’s USDT, and has already flagged some that appear designed to sidestep disclosure requirements or move funds outside normal banking channels, according to Thai outlet Thansettakij.

    Stablecoin Screening Initiative

    The central bank is actively screening stablecoin transactions for signs of money laundering or attempts to circumvent disclosure requirements and move funds outside conventional banking channels. According to Thai outlet Thansettakij, the Bank of Thailand has already identified some transactions exhibiting such characteristics. As the Securities and Exchange Commission (SEC) in Thailand holds regulatory authority over digital assets, the Bank of Thailand is coordinating its findings with the SEC, which is empowered to take regulatory action.

    USDT, the largest stablecoin by market capitalization and a widely used trading pair on cryptocurrency exchanges, according to CoinGecko data, is a key focus of this screening. This initiative is part of a wider campaign against what Thai officials term the ‘grey economy,’ a long-term effort requiring multiple parallel measures rather than a quick fix, as stated by the Bank of Thailand Governor.

    Broader ‘Grey Economy’ Crackdown

    These efforts to curb illicit financial activity extend beyond stablecoins. Since April, Thai banks have been required to verify the purpose of cash withdrawals exceeding 5 million baht (approximately $150,000). This measure has reportedly coincided with a reduction of about 35% in large cash withdrawals. Furthermore, from the fourth quarter, individuals depositing 5 million baht or more in cash may be required to declare the origin of these funds.

    Regulators are also intensifying controls on high-value banknote exchanges and gold trading. Officials observed buyers ordering gold through an app and collecting it from shops shortly after, prompting increased scrutiny. Suspicious activities in gold trading are now reported to Thailand’s Anti-Money Laundering Office. Consequently, monthly gold withdrawals have seen a significant decrease, falling from approximately 4,000 kilograms to around 700 kilograms.

    In parallel, banks have closed thousands of ‘mule’ accounts associated with online gambling operations. Thailand has become a notable hub for crypto-enabled crime, with law enforcement agencies actively pursuing investigations. Recent operations include Thai police tracing a romance-scam laundering network where a single wallet moved over $122.5 million in 10 months through cross-chain swaps, as part of Interpol’s Operation First Light. Investigators have also expanded a probe into a $300 million Chinese laundering network and seized $8.6 million worth of illegal mining rigs used to power scam compounds.

    Balancing Regulation and Innovation

    Despite the focus on combating illicit finance, Thailand is also pursuing the development of legitimate digital asset activities. The SEC has outlined a three-year plan to promote tokenization and crypto exchange-traded funds (ETFs). Concurrently, the central bank is working on developing a baht-backed stablecoin as part of a broader financial infrastructure overhaul.

    While these measures represent a significant step in regulating digital assets and combating financial crime, uncertainties remain regarding the exact nature and volume of flagged stablecoin transactions, the specific outcomes of the coordination between the Bank of Thailand and the SEC, and the total amount of laundered funds successfully intercepted. The Bank of Thailand’s approach highlights a dual strategy: tightening controls on illicit financial flows while fostering innovation within the digital asset ecosystem.

  • Three Years On: Ripple’s XRP Strategy and Market Integration Post-Ruling

    Three Years On: Ripple’s XRP Strategy and Market Integration Post-Ruling

    Three years after a pivotal court ruling distinguished between Ripple’s programmatic sales of XRP on exchanges and its sales to institutional investors, the cryptocurrency and its issuer continue to navigate the implications of this regulatory clarity. The July 13, 2023, decision by Judge Analisa Torres, which stated that programmatic sales did not constitute securities transactions while institutional sales did, has shaped Ripple’s business expansion and XRP’s market integration.

    Market Reaction and XRP’s Resurgence
    The ruling immediately triggered a significant market reaction. XRP’s price surged over 70% in a single day following the decision, leading major U.S. exchanges such as Coinbase, Kraken, and Gemini to relist the token. This period also saw XRP’s price rally, reaching above $3 in early 2025 and eventually tapping a new all-time high in July of that year. Although the token experienced a pullback amid a broader market downturn, it remained above $1 on the ruling’s third anniversary.

    Ripple’s Strategic Expansion
    In the wake of the ruling, Ripple has pursued a strategy of significant business expansion. The company launched its U.S. dollar-backed stablecoin, RLUSD, in December 2024. Further strengthening its position, Ripple acquired Standard Custody & Trust Company, with the deal closing in June 2024. In April 2025, Ripple purchased Hidden Road for $1.25 billion, a move that expanded the company’s services into institutional prime brokerage, clearing, and financing, with RLUSD and the XRP Ledger integrated into Hidden Road’s post-trade infrastructure.

    Institutional Adoption and ETF Performance
    The regulatory clarity provided by the 2023 decision also paved the way for XRP’s entry into the institutional investment product market. Spot XRP Exchange-Traded Funds (ETFs) began launching in late 2025. These funds have seen substantial institutional investment flows since their inception. However, recent performance indicates a shift, with XRP ETFs recording an outflow of $2.50 million in July of the current year, following a nine-week streak of positive inflows. This recent outflow occurred after the funds had dominated crypto ETF flows.

    The ruling itself distinguished between XRP sold to institutional investors, which the court found violated securities laws, and tokens sold on public exchanges, which it determined did not constitute securities transactions. This distinction has been crucial in shaping the subsequent market dynamics and Ripple’s operational strategy. The decision is considered a significant legal moment in the cryptocurrency industry, providing a degree of regulatory clarity that has influenced market behavior and institutional adoption.

    Why This Matters

    The materials describe a narrow update: A court ruling on July 13, 2023, stated that Ripple’s programmatic sales of XRP on exchanges were not securities transactions, while sales to institutional investors were. The exact date of the ruling’s third anniversary is not specified, but it is implied to be around the article’s publication date.

    Broader Context

    Source materials place the factual news in this context: The article discusses the impact of a specific court ruling on Ripple and XRP three years after it occurred.

  • Prosecutors Suggest Crypto Mixer, Privacy Coin Use as Money Laundering Indicator

    Prosecutors Suggest Crypto Mixer, Privacy Coin Use as Money Laundering Indicator

    Prosecutors Propose New Framework for Crypto Money Laundering Cases

    An article published in the official newspaper of China’s top prosecutors’ office has outlined a potential framework for prosecuting cryptocurrency money laundering, suggesting that courts should presume criminal intent when suspects utilize coin mixers and privacy coins. The proposal also advocates for the state to establish a platform for liquidating seized cryptocurrency.

    The piece appeared in the “theory” section of the Procuratorate Daily, the newspaper of the Supreme People’s Procuratorate. Authored by two district prosecutors from Hunan province and a university law professor, the article carries no legal weight. However, such publications offer insight into the evolving legal thinking within China’s prosecution system, which charged over 3,000 individuals with crypto-related money laundering in 2024 alone.

    According to the authors, China’s specific money-laundering offense currently encompasses only seven categories of predicate crimes. Consequently, prosecutors often resort to a broader “concealment” charge for crypto cases, a workaround they describe as having become an overextended catch-all.

    The authors urge the adoption of a “double investigation of one case” rule. This would involve scrutinizing every underlying crime for laundering activities and requiring investigators to meticulously map the flow of any involved cryptocurrency. This proposal builds upon a 2024 judicial interpretation from China’s Supreme People’s Court, which already classifies the use of virtual asset transactions to move criminal proceeds as a form of money laundering.

    The most significant proposals relate to the burden of proof. The authors contend that courts should be empowered to presume a suspect’s intent to launder money unless they can provide “reasonable counter-evidence.” This presumption would apply when suspects employ tools designed to obscure transactions, such as mixers or privacy coins; offload large amounts of cryptocurrency at “obviously unreasonable” prices; or conduct high-frequency, large-scale transfers through anonymous wallets lacking any link to their identity.

    Furthermore, the article introduces a “blockchain data self-verification” principle. This would treat on-chain records, verifiable on public block explorers with matching hash values, as presumptively genuine, shifting the onus of proof to any party disputing them. Reports from compliant blockchain analytics firms, including fund flow maps and address clustering, would be admissible as expert evidence. Money laundering could then be established from circumstantial, fragmented evidence, provided it forms a coherent chain, even if not every coin can be traced to its origin.

    Addressing Seized Cryptocurrency

    The third key aspect of the article addresses the disposition of seized cryptocurrency in China. Beijing’s ban on cryptocurrency trading means that authorities confiscating tokens lack a clear legal avenue to convert them into fiat currency, leaving billions of dollars in assets in a legal gray area.

    The article advocates for a national platform to manage and dispose of seized crypto through “compliant channels,” such as directed auctions. It also calls for a standing expert committee to value holdings based on on-chain data and global exchange prices. Additionally, the proposal includes provisions for cross-border deals and a blockchain-based “judicial cooperation chain” to trace and recover assets moved offshore. In practice, local governments have reportedly been discreetly selling seized cryptocurrency through private firms in offshore markets, a workaround that Reuters documented last year and which a formal system would aim to replace.

    China outlawed cryptocurrency trading and mining in 2021, yet it remains a significant hub for crypto-based money laundering. Chinese police have dismantled large laundering rings, including a $1.7 billion operation in 2022. According to Chainalysis, Chinese-language laundering networks processed an estimated $16 billion in 2025 and now account for roughly one-fifth of all global crypto money laundering. The firm attributes their rise partly to China’s capital controls, as wealthy citizens moving funds offshore provide the liquidity that enables these networks to launder money for Western organized crime groups.