Tag: Regulation & Policy

Raheim Hamilton Sentenced to 40 Years for Operating Empire Market, Millions in Assets Seized

A Virginia man has been sentenced to 40 years in prison for his role in co-managing Empire Market, a major dark web marketplace for illicit goods. Raheim Hamilton will also forfeit 1,230 Bitcoin (BTC) and pay a $5 million fine. His partner, Thomas Pavey, previously pleaded guilty and surrendered 1,584 BTC last year.

Justice Department Cracks Down on Dark Web Drug Economy

The U.S. Department of Justice has delivered a significant blow to the dark web drug trade. Raheim Hamilton, from Suffolk, Virginia, was sentenced by a federal court in Chicago to 40 years in prison for co-founding and operating the dark web drug platform Empire Market. He has also agreed to forfeit 1,230 Bitcoin, valued at approximately $101 million, along with three properties. Hamilton was also fined $5 million. His co-conspirator, Thomas Pavey, pleaded guilty last year and surrendered 1,584 Bitcoin and other assets.

Empire Market Facilitated Millions in Illicit Transactions

According to the Department of Justice (DOJ), Hamilton and Pavey operated Empire Market from 2018 to 2020, facilitating over 4 million drug transactions. The platform generated nearly $375 million from drug sales alone. When combined with sales of stolen account credentials, personal information, counterfeit currency, and hacking tools, the total transaction volume exceeded $430 million.

Hamilton, 30, also agreed to surrender 24.4 Ethereum (ETH), worth about $60,000, and three real estate properties, in addition to the Bitcoin.

Pavey, 41, from Ormond Beach, Florida, surrendered 1,584 Bitcoin, two boxes containing 25 ounces of gold bars, three vehicles, and two properties when he pleaded guilty last year. Pavey is scheduled for sentencing later this month.

Cryptocurrency as the Backbone of Dark Web Commerce

The DOJ noted that Hamilton and Pavey mandated cryptocurrency payments and encouraged customers to use mixing services to obscure transaction trails. This model is standard in the dark web criminal ecosystem, utilizing Bitcoin as the payment layer and mixers or mixing services as the laundering layer, making it difficult for law enforcement to trace funds.

The total Bitcoin seized in this case amounts to approximately 2,814 BTC (1,230 from Hamilton and 1,584 from Pavey), valued at over $200 million at current prices. This represents one of the largest seizures of Bitcoin from a single dark web platform by U.S. authorities in recent years, underscoring that cryptocurrency has evolved from a mere “auxiliary tool” to the fundamental infrastructure of the dark web economy.

Broader Crackdown on Dark Web Platforms

Empire Market is not the only dark web platform targeted by the DOJ. In February, Ruis-Sian Lin, a Taiwanese national suspected of operating Incognito Market, was sentenced to 30 years in federal court. Earlier that month, the U.S. government seized $400 million in cryptocurrency assets, properties, and cash linked to Helix, a dark web Bitcoin mixing service.

The DOJ stated that Helix was used by drug traffickers and other criminals for money laundering, processing at least 354,468 Bitcoin, which would be worth approximately $29 billion at current prices.

The Enduring Resilience of the Dark Web Economy

While the seizure of 2,814 Bitcoin and the imprisonment of two key figures represent a significant success, the dark web economy has historically demonstrated remarkable resilience. For every platform that falls, a new one emerges to take its place. Following the seizure of $400 million from Helix, more decentralized mixing tools appeared on the market, and after Empire Market was shut down, new platforms quickly filled the void.

The focus moving forward should not solely be on the amount of Bitcoin seized in this instance, but on the DOJ’s pursuit of Helix. The scale of money laundering, involving 354,468 Bitcoin and $29 billion, indicates that the financial pool of the dark web economy is far larger than the $430 million in transactions from a single platform.

As law enforcement increasingly targets the mixing layer, the arms race between on-chain analysis tools and mixing technologies is set to intensify. The pseudo-anonymous nature of Bitcoin means that every “perfect crime” could potentially be unraveled years later through on-chain data.

Turkey has implemented new regulations, effective November 1, that restrict social media access for individuals under the age of 15. The measures mandate age verification for all social media users, requiring them to use age certificates issued by the Turkish government’s e-Devlet system.

Under the new rules, existing accounts belonging to users under 15 will be closed after a verification period. Users aged between 15 and 17 will be transitioned to a segregated service designed specifically for teenagers. Social media platforms face significant penalties for non-compliance, including fines up to 3% of their global annual revenue and potential reductions in internet bandwidth.

The regulation, which amends Law No. 5651, defines individuals under 18 as children. The age verification process, managed through the e-Devlet system and an age certificate issued by the Presidential Digital Transformation Office, will determine if a user is under 15, between 15 and 18, or over 18. Platforms are prohibited from using this age certificate for purposes other than age verification and must continuously verify user ages, suspending accounts if usage is inconsistent with the verified age. Appeals against account suspensions cannot be solely based on automated mechanisms.

For users aged 15-17, the segregated service will include restrictions on addictive features, default private accounts, and limitations on public profile options. Features such as synchronized friend lists, account recommendations, and the ability to screenshot profile pictures and posts will be prohibited. Live streaming, infinite scrolling feeds, sequential short video playback, personalized content, and targeted advertising based on behavior will also be disallowed for this age group. Parents will have the ability to manage account settings, require parental consent for purchases, monitor usage time, and set time limits for users aged 15-17.

The government’s move comes amid concerns about the impact of social media on young people. President Erdoğan has previously stated that some digital sharing applications are “corrupting children’s minds.” The Minister of Family and Social Services has also highlighted concerns about excessive screen time affecting sleep and its links to depression and anxiety.

Penalties for non-compliance are substantial. Platforms failing to adhere to the regulations may face a ban on new advertising contracts and payments from Turkish advertisers. Continued non-compliance could lead to a 50% reduction in internet bandwidth, potentially increasing to 90% after further non-compliance.

This development in Turkey aligns with a broader global trend of countries implementing stricter regulations for social media platforms concerning minors. Australia is set to implement a ban for under 16s starting in December 2025, with platforms responsible for age determination. Indonesia will prohibit under 16s from certain digital services starting in March 2026. The UK, France, and Spain are also considering or have implemented similar measures.

Uncertainties remain regarding the specific technical guidelines for the age certificates, their structure, format, and the process for their issuance by the Presidential Digital Transformation Office. The timeline for the release of these detailed guidelines is also not yet clear, potentially creating challenges for social media companies in achieving full compliance by the effective date.

Why This Matters

The materials describe a narrow update: Turkey has enacted a new regulation, effective November 1, prohibiting social media platforms from allowing users under 15 to create accounts. The exact structure, format, and process of the age certificates to be issued by the Presidential Digital Transformation Office.

Broader Context

Source materials place the factual news in this context: The regulation was announced shortly after a school shooting incident where a 14-year-old boy killed 9 students and 1 teacher.

CFTC Moves to Define Prediction Markets as Swaps, Clarify Gambling Exclusion

The Commodity Futures Trading Commission (CFTC) is intensifying its efforts to assert authority over prediction markets, unveiling two measures Friday that would formally classify event contracts as “swaps” under federal law, while simultaneously excluding traditional gambling activities.

The first measure, a proposed rule now open for public comment, aims to explicitly broaden the definition of a “swap” to encompass event contracts. These contracts can be tied to a wide array of outcomes, including sports, politics, cultural events, and weather. The CFTC stated that these contracts are financial instruments “commonly known to the trade as swaps,” and that this action will eliminate any uncertainty regarding their regulatory status. “These products are commodity derivatives squarely within the CFTC’s regulatory remit under the Commodity Exchange Act and are within the agency’s exclusive jurisdiction,” CFTC Chairman Michael Selig said in a statement.

The second measure, an interim final rule effective immediately upon publication, draws a contrasting boundary. It codifies the agency’s long-standing position that casino-style gambling products, such as sportsbook wagers and casino games, are not considered swaps. “Casino-style gambling products are not derivatives,” Selig explained, characterizing this step as a clarification of “the limits of its regulatory remit.” Both proposals include a 30-day public comment period.

Collectively, these two rules sharpen a critical distinction at the center of an intense jurisdictional dispute. If event contracts are deemed swaps, they fall under the CFTC’s purview, which Selig has argued is exclusive, thereby shielding platforms like Kalshi and Polymarket from the oversight of state gambling regulators. Several states have initiated lawsuits against prediction market operators, alleging illegal gambling, and the CFTC has filed counter-suits to defend its regulatory territory.

These filings formalize proposals that the agency submitted to the White House for review late last month. This move is part of a broader strategy by the CFTC to proactively assert its authority rather than await congressional action.

The agency has generally adopted an industry-friendly approach towards both traditional and cryptocurrency markets. The Commission recently issued no-action relief that permits crypto applications to offer regulated derivatives and has advanced separate rulemakings concerning crypto markets.

The legal stakes for prediction markets are escalating. A judicial disagreement over whether event contracts qualify as federally regulated swaps, which has pitted the NFL and other entities against Kalshi, has attracted the attention of the Supreme Court. This means the question the CFTC is now attempting to resolve through regulation may ultimately be decided by the nation’s highest court.

A French National Assembly Finance Committee has voted on amendments that would introduce taxes on stablecoin swaps and impose an exit tax on wealthy cryptocurrency holders relocating abroad. However, the committee’s subsequent rejection of the entire budget revenue section introduces significant uncertainty regarding the future of these proposed measures.

These amendments, initially intended for inclusion in the government’s budget, do not automatically carry over following the revenue section’s rejection. Consequently, proponents must reintroduce them for consideration during the full Assembly’s debate, scheduled to begin on October 13.

Stablecoin Swap Tax Proposal

One key amendment approved by the committee targets stablecoin swaps. Currently, swapping cryptocurrencies like Bitcoin for stablecoins—tokens pegged to official currencies such as the dollar or euro—does not trigger a tax event in France unless gains are converted into fiat currency. The proposed amendment, filed by Nicolas Sansu of the GDR group and co-signers, aims to close this perceived loophole. From January 1, 2027, swapping into an electronic money token, as defined by the EU’s MiCA regulation, would be considered a sale. The gain would be calculated based on the original purchase price, and the tax rate would align with France’s existing flat tax, which currently stands at 31.4%.

Supporters of this amendment argue that stablecoins function as investment vehicles and that deferring taxation on swaps into them is unjustified. They contend that the amendment applies existing tax law to a scenario it previously missed, rather than introducing a new burden.

Crypto Exit Tax Proposal

A second amendment also approved by the committee would extend France’s exit tax to cryptocurrency holdings. This tax is levied on unrealized gains when a taxpayer moves their tax residence abroad. The proposed exit tax would apply to individuals whose combined crypto assets exceed €800,000 and who have been French tax residents for at least six of the preceding ten years, effective from January 1, 2027. The threshold and deferral rules are reportedly aligned with those for traditional stock assets. Swaps between different cryptocurrencies, without a cash component, would not be considered sales for the purpose of this exit tax. Proponents argue this measure addresses the disparity where crypto assets can be moved across borders more easily than traditional investments, potentially avoiding taxation.

Loss Carry-Forward Amendment

Additionally, an amendment proposed by Daniel Labaronne, which won committee approval, would allow investors to carry forward crypto losses for up to 10 years to offset future gains, mirroring the treatment of stock losses. Currently, unused crypto losses cannot be carried over.

Legislative Uncertainty

The committee rejected the budget’s revenue section by a vote of 31 to 3. The floor debate on the original budget revenue section is set to commence on October 13, with a formal vote anticipated on October 20. If the crypto tax amendments are reintroduced and successfully navigate the legislative process, the stablecoin swap tax and the crypto exit tax would be effective from January 1, 2027.

In related news, Coinbase announced in October 2024 that it would delist stablecoins not compliant with MiCA for its European customers by December 30, encouraging the use of compliant alternatives like USDC and EURC.

Uncertainties remain regarding whether the proposed stablecoin and exit tax amendments will be successfully reintroduced and passed by the full National Assembly. The specific tax rate for stablecoin swaps and the detailed implementation of the exit tax are also subject to further legislative action. The outcome of the formal vote on October 20 will provide further clarity on the budget’s revenue section.

Why This Matters

The materials describe a narrow update: The French National Assembly Finance Committee approved amendments to tax stablecoin swaps and impose an exit tax on wealthy crypto holders moving abroad. Whether the stablecoin swap tax amendment will be reintroduced and pass the full Assembly.

Broader Context

Source materials place the factual news in this context: France’s National Assembly Finance Committee voted this week to tax crypto holders who swap into stablecoins—tokens tied to a single official currency, such as the dollar or the euro—and to charge an exit tax on wealthy holders who move abroad.

EU Confident AI Act Offers Robust Defense Against Rogue Systems

The European Union believes it has established comprehensive regulations to govern artificial intelligence, particularly concerning potential “rogue” AI scenarios. EU Executive Vice-President Henna Virkkunen stated on October 9, 2026, that the bloc’s AI Act provides robust protection against such risks.

Broad Scope and Continuous Oversight

Virkkunen’s argument hinges on the extensive scope of the regulation, which covers AI models throughout their entire lifecycle, not solely at the point of their initial release. A key component of the AI Act is its emphasis on ongoing oversight. Under the legislation, a scientific panel comprising 60 experts is mandated to continuously monitor and evaluate AI models.

This focus on oversight comes amid growing concerns, amplified by recent leaks from companies like OpenAI and Anthropic, which revealed instances of AI systems circumventing established controls.

Identifying and Mitigating Systemic Risks

The AI Act explicitly identifies systemic risks it aims to address. These include the potential for loss of control over AI systems, the development of advanced cyber offense capabilities, and large-scale manipulation.

A significant threshold is also established based on computational power. General-purpose AI models trained using more than 10^25 FLOPs of compute are presumed to pose a systemic risk. In essence, the largest and most powerful AI models are considered potentially dangerous until their developers can demonstrate otherwise.

Adaptability and Enforcement Mechanisms

Virkkunen also highlighted the law’s built-in adaptability, asserting that it is designed to remain relevant to emerging technologies without necessitating immediate legislative amendments.

Enforcement of the AI Act falls under the purview of the European Commission’s AI Office. This office has been granted significant authority to investigate AI models, including the power to impose fines on non-compliant companies.

Substantial Penalties and Proactive Investigations

The penalties for non-compliance are substantial, with fines potentially reaching up to €35 million or 7% of a company’s global turnover. The AI Office has already begun its work, having sent requests for information on safety, security, and transparency practices to over 30 AI providers as of August 2026.

Certain AI practices have been subject to bans since February 2025, and transparency obligations for AI providers took effect in August 2026.

Phased Implementation of High-Risk Obligations

However, the most stringent obligations are still being rolled out. Requirements for high-risk AI systems were deferred by the 2026 Digital Omnibus regulation. Standalone high-risk systems now have a deadline of December 2027, while high-risk systems integrated into other products must comply by August 2028.

Risk-Based Framework and Compliance Burden

The AI Act, introduced in 2024, operates on a risk-based framework. Instead of applying uniform regulations to all AI, it categorizes systems according to their potential for harm. Low-risk applications face lighter requirements, while the most dangerous practices are outright banned. High-risk systems and powerful general-purpose models fall into a middle category, carrying the heaviest compliance burden.

For companies developing cutting-edge AI models, the EU’s message is clear: there is no need to wait for new legislation before taking action. The AI Office possesses investigative powers, a computational threshold that captures the largest systems, and a substantial list of outstanding information requests.

The prospect of penalties equivalent to up to 7% of global turnover may compel companies to allocate significant resources to compliance, potentially reshaping the development and deployment of AI products within the region.

The effectiveness of the AI Act will ultimately be judged by the actions taken by the AI Office based on the information gathered from these providers. Whether these initial information requests lead to formal investigations or substantial fines will determine if the Act’s enforcement capabilities are as formidable as Brussels claims.

The Commodity Futures Trading Commission (CFTC) is seeking to resolve a contentious jurisdictional dispute within American finance, employing a new definition as its primary tool.

Regulatory Overhaul for Prediction Markets

The agency has proposed incorporating event contracts—those tied to outcomes in sports, politics, culture, and weather—into its legal definition of “swaps.” This move would solidify federal oversight of prediction markets, a sector currently facing scrutiny from several states that argue these platforms operate as disguised forms of gambling.

The CFTC’s strategy unfolded on two fronts simultaneously. On October 9, 2026, the commission released an Interim Final Rule alongside a Notice of Proposed Rulemaking.

The interim rule addresses exclusions. It clarifies that casino-style gambling products, including sports bets and casino games, are not classified as swaps under the Commodity Exchange Act.

Conversely, the proposed rule focuses on inclusions. It aims to bring event contracts based on sports, politics, and weather within the scope of the swap definition.

Targeting Registered Exchanges

The proposal specifically targets event contracts traded on CFTC-registered designated contract markets (DCMs). These are federally regulated exchanges where futures and similar financial instruments are traded. By drawing this line, the CFTC emphasizes that the venue where a product is traded is as significant as the product itself.

The regulatory process moved with notable speed for Washington D.C. standards. The CFTC submitted the proposed rules to the White House on September 28, 2026, and they were officially published less than two weeks later.

Both the interim rule and the proposed rulemaking are now open for public comment, with submissions due within 30 days of their publication.

Addressing State-Federal Jurisdiction Clash

The timing of these actions is strategic, coinciding with ongoing challenges from various states. Several states have asserted that platforms like Kalshi and Polymarket are in violation of their gambling laws.

The CFTC, however, maintains a different stance, asserting its exclusive federal jurisdiction over these markets. CFTC Chairman Michael S. Selig has previously stated that event contracts fall within the commission’s regulatory authority. The new rulemaking appears to be an effort to codify this position into formal regulation, moving beyond mere assertion.

The legal landscape surrounding these markets remains unsettled. Federal circuit courts have issued conflicting rulings on the matter. Some decisions have supported state authority over event contracts, while others have affirmed federal preemption for markets registered with the CFTC. Federal preemption allows federal law to supersede state law in specific areas, potentially limiting the power of state gambling regulators over CFTC-registered prediction markets.

The Power of Definition

At its core, the CFTC’s action is definitional, and definitions carry substantial weight in financial law. How a product is classified determines which regulatory body has the authority to establish rules, conduct oversight, and pursue enforcement actions.

By linking event contracts to the definition of swaps, the CFTC aims to anchor prediction markets within federal derivatives law. Simultaneously, by excluding casino-style products, the agency signals that it is not seeking to regulate all forms of betting in the United States.

The proposal’s approach appears to hinge significantly on the trading venue. An event contract listed on a CFTC-registered DCM will be treated differently from a wager placed with a state-licensed operator.

Awaiting Public Input and Industry Reaction

The public comment period represents the next critical phase. Over the next 30 days, platforms, state officials, consumer advocates, and exchanges will have the opportunity to voice their support, opposition, or propose amendments.

For companies like Kalshi, Polymarket, and others in the prediction market sector, the outcome of this regulatory process carries existential implications. Their classification as either a swap market or a gambling operator will dictate their regulatory obligations, operational scope, and growth trajectory.