Ten South Korean lawmakers proposed a bill that would allow the Financial Intelligence Unit to pursue unregistered crypto operators and refer them to prosecutors.
The South Korean police have shelved almost every case the FIU has passed on to them.
Ten lawmakers file bill #2220655
The measure was introduced on Thursday by Rep. Eom Tae-young of the People Power Party and nine others. It amends the Act on Reporting and Using Specified Financial Transaction Information by inserting a new provision, Article 15-4.
According to the legislative tracking portal of South Korea, the bill was referred on August 21 to the political affairs committee of the National Assembly, which oversees the Financial Services Commission.
The bill still has to go through committee review and a floor vote. Wording can change along the way, and bills filed by individual legislators often die unpassed when an Assembly term ends.
Under the proposal, anyone could report a suspected violation directly to the FIU. The unit could then investigate the allegation, analyze it, file a complaint, request a criminal investigation, or pass the information to investigators.
The FIU is part of the Financial Services Commission (FSC) and operates the registration regime that crypto firms serving Korean customers must join.
As of June, it had 28 registered providers and said it had referred 40 suspected illegal operators to investigative authorities.
Police shelved 23 of 25 FIU referrals
Between August 2022 and August 2025, the FIU referred 25 unregistered virtual asset service providers to police for investigation.
But police suspended investigations or preliminary inquiries in 23 cases. Most of these firms and their people were said to be located overseas, making them difficult to access using the current process.
Today, the FIU can flag a suspected unregistered operator, but has to lean on police and other agencies to pursue it.
The bill’s statement of reasons contends that reliance on inter-agency cooperation and formal investigation requests makes a fast response difficult.
It warns that unregistered venues, which it calls “private coin exchange offices,” can be used for money laundering, illegal currency exchange, and illegal overseas remittance.
South Korea’s Cabinet approved an amendment on August 11 that removes the 1 million won reporting threshold for crypto transfers.
Registration provisions became effective on August 20, and the full Travel Rule expansion will follow in February 2027, per a past Cryptopolitan report. The package also introduced a 200% debt-ratio cap on exchange operators and stricter vetting of shareholders.
The FIU only permitted two new virtual asset service providers in 2025. That’s down from four the year before. According to previous coverage by Cryptopolitan, the average time it took to get approved went up from 11 months to 16 months.
Suspicious transaction reports rose to 36,684 last year in South Korea, and about 90% of them were linked to illegal cross-border remittance arrangements.
Don’t just read crypto news. Understand it. Subscribe to our newsletter. It’s free.
Inside the Room: What Happened at Trump’s White House Crypto Summit
Policy & Regulation
CCS Exclusive
Inside the Room: What Really Happened at Trump’s White House Crypto Summit
President Trump gathered the heads of Coinbase, Robinhood, Ripple, Gemini, Kalshi and Polymarket at the
White House this week, alongside the nation’s top financial regulators — a meeting industry insiders
are already calling the clearest signal yet of how Washington intends to write crypto’s rulebook.
CCS Staff•Published August 20, 2026•7 min read
The White House, Washington D.C. — August 19, 2026
On Wednesday, August 19, the White House played host to one of the most consequential informal gatherings
in the crypto industry’s short history. President Donald Trump convened a closed-door meeting with the
chief executives of the country’s biggest digital-asset and prediction-market platforms, flanked by
Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, CFTC Chairman Michael Selig, and
SEC Chairman Paul Atkins. The message from the administration was unambiguous: crypto policy is no longer
a talking point, it’s an active build.
Who Was In The Room
President TrumpTreasury Sec. Scott BessentCommerce Sec. Howard LutnickCFTC Chair Michael SeligSEC Chair Paul AtkinsCoinbase — Brian ArmstrongRobinhood — Vlad TenevRipple — Brad GarlinghouseGemini — Winklevoss twinsKraken — Arjun SethiChainlink — Sergey NazarovKalshiPolymarketNasdaqNYSE — Jeffrey SprecherCME GroupDTCCPatrick Witt, WH Crypto Advisor
The meeting preceded the first official session of the CFTC’s new Innovation Advisory Committee, a 35-member panel dominated by industry executives — from crypto exchanges to prediction markets like Kalshi and Polymarket to sportsbooks such as FanDuel and DraftKings.
Notably absent: consumer advocacy groups and public-interest representatives, a gap several observers flagged as conspicuous given the scope of the rules being discussed.
Why This Meeting, Why Now
The timing was no accident. The gathering landed in the middle of a three-week stretch that has seen
Washington move faster on digital-asset policy than at almost any point since the 2024 election. Treasury
released its GENIUS Act notice of proposed rulemaking on stablecoins on August 17, framing them explicitly
as payment infrastructure rather than securities. The SEC followed a day later with a draft “Regulation
Crypto Assets” proposal. And Congress’s own centerpiece bill, the Digital Asset Market Clarity Act
(CLARITY Act), remains stuck — a procedural vote requiring 60 Senate votes isn’t scheduled until
September 15, and prediction markets currently put its odds of passage at roughly 20%, down sharply from
an 82% peak earlier this year.
Taken together, the picture is one of an administration choosing not to wait on Capitol Hill. Rather than
banking on the CLARITY Act to clear a divided Senate, the White House appears to be advancing its crypto
agenda through the agencies it already controls — the SEC and the CFTC — while keeping industry leadership
in the room as those rules take shape.
“The crypto industry still wants the CLARITY Act — but its path remains uncertain. The administration
looks increasingly ready to advance its agenda through SEC and CFTC action instead of waiting on Congress.”
— Assessment shared by analysts covering the summit’s policy implications
What Was Actually Discussed
According to reporting on the meeting, three tracks dominated the conversation:
Market structure. How crypto trading, custody, and settlement should be regulated going forward — and by whom, given the long-running turf questions between the SEC and CFTC.
Tokenization. The convergence of crypto-native infrastructure with traditional finance, with executives discussing how equities and bonds might eventually trade as tokenized assets on platforms spanning both worlds. The presence of Nasdaq, NYSE, CME Group, and DTCC alongside crypto-native firms was widely read as a signal of where the administration wants this to head.
Prediction markets. With Kalshi and Polymarket now operating in a regulatory gray zone that increasingly overlaps with traditional gambling oversight, their inclusion — alongside sportsbook operators — underscored how much the CFTC’s remit is expanding.
A related CFTC session the following day, titled “Crypto’s Regulatory Evolution: From Uncertainty to
Clarity,” was billed as digging into “the remaining challenges to a durable federal market structure” —
language that suggests regulators see Wednesday’s meeting as the opening move in a longer process, not
a one-off photo opportunity.
The single biggest market-moving line of the day didn’t come from a press release — it came from Trump
himself. Mid-meeting, the president said CFTC Chair Michael Selig was working to bring
Hyperliquid, the crypto-native perpetuals exchange, into the U.S. market “legally and
with full compliance.” That’s short of an approval — no license was granted and no timeline was given —
but traders treated it as a green light anyway.
Within minutes of the remark circulating, HYPE — Hyperliquid’s native token — spiked roughly 20%, running
from about $62 to a high near $72 before settling around $69–70.
— Price move tracked across crypto markets following Trump’s on-the-record comment
The rally wasn’t purely sentiment. Hyperliquid already generates real revenue — roughly $41.7 million in
fees over a trailing 30-day window — and funnels an estimated 97–99% of that back into open-market HYPE
buybacks. With about 955.3 million of the token’s 1 billion max supply already circulating, traders bet
that a compliant U.S. on-ramp would mean more volume, more fees, and more buyback pressure against an
increasingly scarce float. Hyperliquid-linked ETF products also logged fresh net inflows the same day.
The likely structure, per reporting, would route U.S. users through licensed broker partners handling
compliance while Hyperliquid itself remains the underlying trading venue — not an immediate lifting of
existing U.S. access restrictions.
Highlight: Chainlink’s Sergey Nazarov Has a Seat at the Table
Also in the room: Sergey Nazarov, co-founder of Chainlink, the oracle network that
underpins price feeds and cross-chain data for much of DeFi. His presence alongside exchange CEOs and
Wall Street infrastructure players (Nasdaq, NYSE, CME Group, DTCC) is notable in its own right — Chainlink
isn’t an exchange or a broker, it’s plumbing. Its inclusion signals that the administration’s tokenization
push isn’t just about where crypto assets trade, but about the underlying data and settlement rails —
exactly the layer Chainlink has spent years positioning itself to own as banks and asset managers explore
tokenized stocks, bonds, and funds.
The Ethics Question Hanging Over the Room
Not every reaction to the summit was positive. Several outlets pointed out that a number of the executives
in attendance have direct financial ties to Trump-family crypto ventures, and that companies represented
at the table have made substantial donations to Trump-aligned political committees — including the
Trump-Vance inaugural committee and the MAGA Inc. super PAC. Critics argue that having crypto executives
sit down with their own federal regulators, while simultaneously functioning as business partners and
major donors to the president’s political operation, raises real questions about regulatory capture.
The administration has not directly addressed those concerns, and reporting indicates that a broader
debate over whether Trump will accept stricter ethics rules around his personal ties to the digital-asset
industry remains unresolved.
Where the Major Pieces Stand
Policy Track
Lead Agency
Status
CLARITY Act (market structure bill)
U.S. Senate
Stalled — procedural vote Sept. 15
GENIUS Act stablecoin framework
Treasury
NPRM released Aug. 17
Regulation Crypto Assets proposal
SEC
Draft released Aug. 18
Digital asset exemptions review
SEC
Planned meeting postponed
Innovation Advisory Committee
CFTC
First session held Aug. 20
What to Watch Next
All eyes now turn to two dates. First, the CFTC’s Innovation Advisory Committee will continue meeting in
the weeks ahead, with its industry-heavy roster expected to shape how “market structure” ultimately gets
defined at the agency level. Second, the Senate’s September 15 procedural vote on the CLARITY Act will
show whether Congress can still assemble 60 votes for comprehensive legislation — or whether, as this
week’s meeting suggested, the real rulebook for crypto in America is going to be written agency by agency,
with industry CEOs helping hold the pen.
While founders debate the Clarity Act, crypto lawyer Dave Rodman has been using the same offshore structure since 2023 — and says it works whether Washington acts or not. Here’s exactly how it works.
By Ashton Addison·Crypto Coin Show — Blockchain Interviews·12 min read
Jurisdiction 01
British Virgin Islands
Token Issuance
The anchor jurisdiction for any project launching a token. The answer has been BVI for years — and still is.
Jurisdiction 02
Cayman Islands
Orphanization & Top Co
Home of the foundation company — an entity with no owners. The cleanest structure for true decentralization.
Jurisdiction 03
Panama
Operations & DeFi
Crypto is legal but unregulated. Anything the US would call “objectionable” has a home here — legally and cost-effectively.
The Interview
Most founders call a lawyer too late. Dave Rodman has seen it a thousand times.
Dave Rodman has spent his entire legal career in the spaces that scare other lawyers off — cannabis, psychedelics, venture capital, and for the last decade, crypto. As Founder and Managing Partner of The Rodman Law Group, he has facilitated over a billion dollars in digital asset transactions and watched the regulatory landscape twist in every direction imaginable. He sat down with Crypto Coin Show to talk about what actually matters for crypto founders right now — and it isn’t the Clarity Act.
“It certainly isn’t boring,” Rodman told us when asked about his career. “It’s been intellectually stimulating and wildly frustrating and rewarding all at the same time.” For a lawyer who chose his specialty long before big law firms had even assigned a practice group to the space, that tension has become familiar territory.
“Move fast and break stuff doesn’t work when the underlying product either is a financial instrument, functions like one, or looks like one.”
— Dave Rodman, Founder, The Rodman Law Group
The single most expensive mistake crypto founders make, according to Rodman, is waiting. Not waiting on legal counsel specifically — waiting on any structured thinking about compliance. The analogy he borrowed from our conversation: it’s like skipping the gym to save time, then paying for it in medical bills later. A lawyer on day one is an investment, not a cost.
Why the Clarity Act doesn’t change Rodman’s playbook
If you’ve been following crypto policy, you know the Clarity Act has been the marquee legislative promise of the current cycle — a framework that would finally resolve whether digital assets are securities or commodities, and who gets to regulate them. Rodman’s take? It won’t pass this year. And even if it does, it won’t matter as much as people think.
“There has never been an example where a thing is regulated by one agency until a nebulous point that no one understands, and then magically regulated by another,” he said. “I think both the SEC and CFTC are going to try to regulate that project at that moment — and there are going to be nasty results.”
The GENIUS Act passed, bringing some clarity to stablecoins. But Rodman points out it was gutted in a critical area: you can’t get yield-bearing stablecoins in the US. His clients’ response? Go offshore and get them permissionlessly anyway.
His broader thesis is more unsettling than any specific piece of legislation: the US is grasping at straws. A country in late-stage capitalism trying to maintain financial dominance over an industry whose entire value proposition is that borders don’t matter. He predicts a well-developed country in the global south — likely in Africa — will eventually take the position that tokens are not securities, allow programmatic revenue distribution, and leapfrog the entire regulatory tangle the way the African continent jumped from landlines directly to smartphones.
The three jurisdictions — and exactly how to use them
This is where the conversation gets practical. Rodman’s firm has refined its offshore structure since 2023, and uses the same three jurisdictions for nearly every client. The stack isn’t arbitrary — each jurisdiction does a specific job, and the combination was engineered to hold up across the scenarios crypto companies actually face.
BVI for token issuance. It’s always been BVI. The British Virgin Islands has the longest track record in the space for this use case, and nothing about the current landscape has changed that calculus. If you’re issuing a token, your issuing entity goes here.
Cayman for orphanization. The Cayman foundation company, introduced around 2020, was a structural breakthrough. It’s an entity with no owners — which makes it the ideal vehicle for decentralization. When you need a top-co that no individual can claim ownership of, Cayman is the answer. Rodman’s standard model: BVI token issuer, Cayman foundation on top.
Panama for everything else. This is the workhorse for operations — especially anything the US would classify as sensitive. Crypto in Panama is legal but unregulated, which gives founders something rare: a jurisdiction where you can operate legitimately while the rest of the world sorts out its rules. Rodman’s firm works with a sister firm on the ground there to produce legal opinions confirming each project is viable.
“If you’re going to have a social media company that needs a token — issue in BVI, orphanize with Cayman, run the social company in the US. It plugs in. And if Facebook wants to acquire you, you unplug the token and sell them a clean US company.”
— Dave Rodman
For founders who want a more regulated path and have the budget for it, Rodman also flagged Bermuda as an underrated option — a jurisdiction where startups can legitimately obtain a financial license, sit with regulators to agree on operating rules, build a compliance track record, and eventually transition to the US when the laws are ready. Rare that clients take him up on it, but the path exists.
Watch the Full Interview
AI agents, liability, and why “code is law” is still wrong
The conversation shifted to an area that’s getting more relevant by the month: AI agents operating autonomously in crypto — managing wallets, executing trades, running DAOs. Who is legally liable when one of them does something wrong?
Rodman’s answer is straightforward, if unsatisfying to founders hoping for a loophole: there are no special AI laws. The liability framework that applies is the same one that’s always applied. Did your product break? Did you disclose its limitations? What did your terms of service say? The existing reasonable-person standard, applied to whoever built the system and whoever deployed it, is the legal reality for now.
He’s also a practitioner of what he preaches. He told us he’s about a month away from having his first AI employee at the firm — built using the same tools available to anyone. If a lawyer can do it, he says, the developers in this space are inches from full agentic operation.
The compliance rule nobody’s talking about: CARF
Before wrapping, Rodman raised something that caught our attention — a framework most DeFi founders have never heard of, called CARF: the Crypto Asset Reporting Framework. It’s a worldwide compliance standard that most major countries have already signed, including the US, Panama, and Cayman. It requires DeFi protocols to report users’ gains and losses to tax agencies.
The mechanism of enforcement is still murky. How do you force a decentralized protocol to comply with a reporting requirement? Rodman doesn’t have a clean answer — nobody does. But the ticking clock is real: the US component takes effect in January. Some other jurisdictions come online in 2028. Projects who get caught in the first enforcement wave won’t be able to say they weren’t warned.
CARF in plain terms: most major countries — including the US, Panama, and Cayman — have signed a framework requiring DeFi protocols to report user gains and losses to tax agencies. America’s component kicks in this January. Most founders in the space have never heard of it.
His closing note on AI and legal risk was pointed: using Claude — his word — to ask whether something is legal is discoverable. If AI advice tells you something is illegal and you do it anyway, a prosecutor can use that. Attorney-client privilege cannot. It’s a distinction worth understanding before the next project launch.
The Rodman Law Group
Building in crypto and haven’t talked to a lawyer yet?
The Rodman Law Group works with crypto founders and Web3 companies on incorporation, token launches, offshore structuring, regulatory compliance, and everything in between. They serve clients across DeFi, DAOs, NFTs, and Web3 globally — and they operate in all three jurisdictions covered in this interview.
The European Union has sanctioned HTX, widening a Russia crackdown that has already affected counterparties beyond the exchange.
The bloc placed Huobi Global S.A., the entity behind HTX, under a transaction ban in its 21st sanctions package adopted July 23. From Aug. 23, EU operators will be prohibited from transacting with the exchange, though the restrictions stop short of freezing its assets.
The move follows Britain’s May action against Huobi Global, which triggered tighter scrutiny of HTX-related transfers at other major crypto exchanges.
The EU is now taking that pressure further, introducing a mechanism that could eventually restrict crypto services across entire countries that host platforms used to evade Russia sanctions.
UK sanctions pushed scrutiny onto counterparties
Britain’s May designation showed how restrictions on HTX could quickly spread to businesses and customers outside the exchange.
After the UK targeted Huobi Global on May 26, OKX warned customers who had previously conducted arbitrage between its platform and HTX that continuing to transfer funds between the two exchanges could trigger additional scrutiny of their accounts.
The warning came after British authorities designated Huobi Global alongside a group of crypto platforms and entities accused of supporting Russian sanctions evasion.
UK authorities said they had reasonable grounds to suspect Huobi Global provided financial services to entities linked to Russia’s financial system, including the A7 cross-border payments network.
Britain also said a major global crypto exchange had channeled more than $1.5 billion toward Kremlin-linked entities. Blockchain intelligence firm TRM Labs identified that exchange as HTX.
The UK action subjected Huobi Global to an asset freeze and restrictions on making funds or economic resources available to the company.
HTX sought to distance the exchange from the entity named by Britain by saying:
“The listed entity Huobi Global S.A. is distinct from the online HTX exchange.”
However, the British authorities subsequently made clear that they considered HTX covered by the designation. The UK sanctions notice lists HTX and HTX Exchange among the names associated with Huobi Global.
In response, Justin Sun, an adviser to HTX, said the exchange “believes in full compliance with all applicable laws and cooperation with law-enforcement agencies worldwide.”
HTX shifts on-chain infrastructure after UK designation
HTX remained operational after the British sanctions while rapidly rotating the wallets supporting its exchange activity.
Blockchain analysis company TRM Labssaid in a July 21 report that HTX had changed hot wallets and funding addresses across Tron, Ethereum, BNB Smart Chain and Solana in the weeks following the designation.
Some addresses remained active for only hours before being replaced.
HTX Wallet Rotation (Source: TRM Labs)
That turnover left screening systems built around fixed address lists struggling to keep pace with the exchange’s changing infrastructure.
A wallet attributed to HTX could be retired while another began processing deposits and withdrawals before compliance providers had identified its connection to the exchange, TRM said.
The firm found that static blocklists could therefore become outdated within hours.
TRM said firms screening for sanctions exposure increasingly need to track transaction patterns, funding relationships and other on-chain behavior that can connect newly activated wallets to an already identified platform.
Its latest assessment of the EU package also warned that exposure can extend beyond direct transactions with a designated address. Funds moving one or two transaction hops from sanctioned platforms can still trigger compliance concerns as firms investigate their origin and destination.
Blockchain investigator ZachXBTsaid the UK action had already made those signals less useful in some investigations because of the volume of addresses carrying exposure to HTX.
He described the resulting on-chain “tainting” as catastrophic, arguing that HTX differs from previously sanctioned crypto businesses such as Huione, Blender and Hydra because the exchange also serves a substantial retail user base in Asia.
“Basically now I’ve had to ignore the sanctions category when tracing cases by exposure since ‘risk’ itself has become meaningless.”
He also criticized compliance tools for failing to adequately distinguish activity that occurred before a sanctions designation from transactions that followed it.
The criticism highlights another difficulty created by wider screening. Connections to HTX can trigger additional review without establishing that the underlying transaction was illicit or occurred after sanctions took effect.
EU takes crackdown one step further with third-country power
The EU’s latest package is nevertheless extending the regulatory perimeter beyond individual exchanges and their changing wallets.
For the first time, the bloc has created a mechanism allowing it to prohibit transactions involving crypto providers across an entire third country when services there are used to help Russia evade sanctions.
The EU described the measure as a deterrent to countries hosting platforms that facilitate circumvention. It could allow Brussels to prohibit transactions between EU operators and crypto providers used by Russia within the affected jurisdiction.
The package extends transaction restrictions to 14 crypto-related service platforms based in Georgia, Panama, the United Arab Emirates, the Marshall Islands, Kyrgyzstan and Belarus.
Several have already faced action from other Western governments, including EXMO, BitPapa and Rapira.
The EU also added four designations tied to the A7 cross-border payments network, citing its new connections to Africa. TRM identified A7 Nigeria and A7 Africa among entities covered by the latest measures.
CryptoSlate previously reported that A7 had expanded into Lagos and Harare after claiming to have processed more than $90 billion during 2025. The network is linked to sanctioned Moldovan politician Ilan Shor and Promsvyazbank, the Russian state-owned lender tied to the country’s defense sector.
A7 also operates A7A5, a ruble-backed stablecoin that has become a major settlement vehicle within the network.
The expansion follows a broader pattern in which crypto activity has moved after individual platforms were targeted.
Following the multinational crackdown on Garantex in 2025, TRM said transaction flows shifted toward successor infrastructure and the A7 network absorbed part of that activity.
The EU’s latest approach gives it the option of following those flows beyond the next individual exchange.
A country hosting platforms used to bypass Russia sanctions could now expose crypto providers across the jurisdiction to restrictions on transactions with EU operators, even as regulators continue targeting individual firms.
A new policy has emerged in India, as a parliamentary committee has asked the Indian government to allow industry-run Self-Regulatory Organizations to regulate India’s crypto market under the auspices of the Reserve Bank of India (RBI) or Securities and Exchange Board of India (SEBI).
This presents a temporary solution for the 39 million people who trade digital assets without any regulation to protect them.
An interim watchdog while a permanent legislation awaits
The Parliamentary Standing Committee on Finance made the recommendation in its 36th report on the proposed Securities Markets Code, 2025. The report was brought before Parliament on July 23. The panel believes recognized SROs should enforce conduct standards for now, while proper crypto legislation is in the works.
The Self-Regulatory Organizations (SROs) would be under the supervision of the Reserve Bank of India or the Securities and Exchange Board of India.
Utmost priority will be placed on investor protection, with SROs expected to audit exchange reserves, separate customer money legally from company balance sheets, and manage complaints from customers.
The committee observed the systems operational in the United Kingdom, Singapore, the United States, and the European Union before arriving at the idea of an SRO.
Taxed at 30% but without legal recognition
India currently has no statute recognizing digital assets as a formal asset class. What it does have, however, is a 30% flat tax on crypto profits and a 1% tax deducted at source on transactions, as Cryptopolitan reported before. It also has a Financial Intelligence Unit where money-laundering cases are reported and handled.
The absence of any legislation is where the problem lies and is what the panel is trying to solve. According to the Ministry of Finance, crypto-assets are outside India’s regulatory purview except for taxation, anti-money-laundering, and reporting rules.
The committee also sought clarity with the legal definitions of digital assets because some tokens may act like securities, some like derivatives, and others may belong in a whole different category.
The RBI still tilts towards a ban
The recommendation comes weeks after the Reserve Bank of India pushed for the outright prohibition of crypto for banks while contemplating the banning of private fiat-backed cryptocurrencies. The RBI suggested to the committee in May and June, claiming dollar-pegged stablecoins would interfere with India’s monetary sovereignty.
The tax authorities agree with the RBI. Tax officials believe offshore trades are tough to track, with less than 25% of the 645,000 people who transacted in crypto in the year to March 2023 reporting their profit.
The RBI said the domestic market had 54 FIU-registered service providers and 39.3 million KYC-verified users holding ~20,437 crore rupees, approximately $2.4 billion.
Why the offshore drain is a strong argument
Critics of the present taxation system argue that it has driven crypto activity out of the country, rather than increasing it.
Raghav Chadha, a member of Rajya Sabha, told Parliament in February that about 73% of India’s crypto volume had moved to foreign exchanges and about 120 million Indians make use of foreign platforms, with ~180 crypto startups leaving the country. He argues, “Prohibition is not protection. Regulation is protection.”
Manhar Garegrat, head of Liminal Custody, told NDTV the recommendations are “a constructive step toward building a more mature digital asset ecosystem in India.”
The next steps lie with the government, which the committee expects to draft robust legislation as well as legal definitions of digital assets, all with the goal of assisting the interim SROs.
Malaysian authorities have revoked the business license of Network School, a technology community founded by former Coinbase CTO Balaji Srinivasan.
The decision followed scrutiny over alleged links to Israeli participants. However, local officials said they cancelled the license over business and premises violations.
The Iskandar Puteri City Council ordered NS0 Malaysia Sdn Bhd to stop all operations at Forest City from July 22. Officials said the company operated from two premises. One site did not have the required business license.
Meanwhile, inspectors found that the company carried out activities beyond those approved under its existing license. Authorities also found problems with its advertising signboard.
Network School is not shutting down; that’s fake news.
We received two notices. The first tells us to change the text of a sign. The second says that our coworking site, which was created by joining two adjacent units, evidently has a valid license on the left hand side but not…
The case began after pro-Palestinian activists raised concerns about possible Israeli participation at Network School.
Online posts alleged that Israeli entrepreneurs had entered Malaysia using passports issued by other countries. The claims also raised questions about the school’s admission process and its interest in Israel, politics and military technology.
However, Malaysian immigration officials later inspected 266 foreign residents from 40 countries.
They said everyone checked had valid travel documents. Authorities did not publicly confirm that any participant had entered Malaysia illegally as an Israeli national.
Malaysia does not recognise Israel and generally does not allow entry using Israeli passports. However, Israeli dual nationals may enter using valid passports from other countries if they meet Malaysian immigration rules.
Prime Minister Anwar Ibrahim said authorities would expel any Israeli national found breaking local laws.
Breaking News: The state of Johor has shut down @balajis‘ Network School.
The only remaining Network School entity will be in Singapore, where it is incorporated.
Congratulations, Singapore now you can have Balaji, the Network State, and the Network School. https://t.co/cKR15y2kws
Network School opened in Forest City, Johor, in 2024.
Despite its name, Malaysia’s Higher Education Ministry said it was not a registered university or private education provider. Officials described it as a residential and co-working community for technology founders, investors and startup workers.
The project became known for promoting Srinivasan’s “network state” idea. The concept involves online communities building physical settlements and developing their own economic and governance systems.
The school offered accommodation, meals, workspaces, startup programmes and fitness activities. It attracted people from the crypto, technology and investment sectors.
I am pleased to announce that a memorandum of understanding has been signed between the Republic of Kazakhstan and Network School. Our new campus will become a haven for global techno-optimism, with expedited visas, streamlined redomiciliation, and active recruitment of talent. pic.twitter.com/R20i8UAYoc
Srinivasan denied the claims about Israeli links before the license was cancelled.
He said anonymous social media accounts had spread false allegations. He also warned that the investigation could damage Malaysia’s reputation among international technology investors.
According to Srinivasan, Network School had invested more than 100 million Malaysian ringgit in Forest City. He said the company had planned a further 500 million ringgit expansion.
The company placed those plans on hold during the investigation.
Srinivasan joined Coinbase in 2018 after the crypto exchange acquired Earn.com, where he served as chief executive.
Coinbase appointed him as its first CTO. His role focused on technology strategy, crypto advocacy and recruitment. He left the company in May 2019.
Malaysia and Israel’s Diplomatic Roadblocks
Malaysia has a long-standing policy of refusing formal diplomatic relations with Israel and strongly supporting Palestinian statehood. Israeli passport holders are generally barred from entering without special permission, and Malaysian passports have historically excluded travel to Israel.
Malaysia warns any Israelis found in the country will be immediately deported —— Malaysian Prime Minister Anwar Ibrahim said on Wednesday that authorities are investigating allegations that an Israeli national may have been involved in the activities of a private residential… pic.twitter.com/PyL28Ye5b4
In 2024, 22 Malaysian civil-society organisations urged the government to block a consortium’s proposed privatisation of Malaysia Airports because one consortium member, Global Infrastructure Partners, was being acquired by BlackRock.
Campaigners alleged that BlackRock had significant Israeli connections and investments.
The government did not cancel the airport transaction solely on that basis. Global Infrastructure Partners later said BlackRock would not participate in the deal.
Japan’s House of Councilors approved Cabinet Bill 57 by majority vote on July 15, completing Diet passage of legislation that will move regulated crypto activity into the Financial Instruments and Exchange Act.
The legal framework is now in place, but traders may still wait until 2027 or 2028 for the new market rules and 20% tax rate to take effect.
The official upper-house record says the core crypto provisions take effect on a date set by Cabinet order within one year of promulgation. Enforcement during 2026 would start the tax rules on Jan. 1, 2027; enforcement during 2027 would move that start to Jan. 1, 2028. The Cabinet’s timing will decide which calendar applies.
Implementation comes before the benefit
The reform shifts crypto transaction regulation out of the Payment Services Act and into FIEA. Crypto remains legally distinct from securities, but covered activity gains a securities-market-style compliance framework.
The Financial Services Agency’s explanatory materials add disclosure and registration coverage for crypto sales, issuer-controlled token offerings and borrowing, as well as asset screening, custody, customer safeguards, and insider-trading controls.
Exchanges and intermediaries can prepare for that framework now; its duties apply after commencement. Detailed operating requirements remain to be set by Cabinet orders and FSA ordinances.
Parliament has already enacted the tax side, but its crypto provisions remain dormant until the FIEA trigger is satisfied. Japan passed and promulgated the fiscal 2026 tax amendments as Law No. 12 on March 31. Once active, qualifying gains will be subject to a combined 20% rate, split between 15% national income tax and 5% local inhabitant tax.
The 20% rate applies only when investors sell eligible tokens through registered crypto businesses and the assets appear on Japan’s official register.
Unused losses within the same tax-defined crypto category can be carried forward for three years, subject to conditions. Tokens, venues and transactions outside that defined channel keep their existing treatment.
Reporting arrives a year after the tax-and-loss rules. Under the Ministry of Finance framework, businesses must provide tax authorities with customer identities, Japan’s My Number identifier, and transaction details by Jan. 31 after the trade year. If the 20% regime starts in 2028, reporting would cover transactions from 2029 and the first reports would be due Jan. 31, 2030.
The reform package also outlines a possible route for crypto investment products. It brings crypto investment management and advice within FIEA and anticipates certain investment trusts holding tax-qualifying, registered crypto assets. That treatment still requires a separate amendment to the Investment Trusts Act enforcement order.
The text names no spot Bitcoin ETF and grants no product approval. The FSA said in October 2025 that the formation and sale of domestic crypto ETFs were barred under the previous framework. Sponsors must still clear the applicable product and listing reviews after implementing rules define the new route.
The key dates now depend on when the law is formally enacted, when the Cabinet brings the FIEA changes into force, and when the FSA finishes the detailed rules. The 20% tax rate would then apply from the following tax year.
The SEC’s Crypto Task Force held a direct meeting with representatives from the Hyperliquid Policy Center, trade.xyz (XYZ Ltd.), and Sullivan & Cromwell LLP to discuss regulatory approaches for crypto assets and decentralized perpetual markets.
According to the official meeting memorandum issued by the Task Force, participants reviewed the Hyperliquid protocol’s technology and market infrastructure. The session was requested in a formal letter signed by Sullivan & Cromwell partner Natasha Vasan on behalf of the group.
Hyperliquid Execs Meet SEC Regulators for Clear Onchain Trading Rules
According to the official meeting memorandum issued by the Task Force, participants reviewed the Hyperliquid protocol’s technology and market infrastructure.
The session was requested in a formal letter signed by Sullivan & Cromwell partner Natasha Vasan on behalf of the group.
Key attendees included Hyperliquid Policy Center CEO Jake Chervinsky, Hyperliquid founder Jeff Yan, and product lead Collins Belton from XYZ Ltd., the primary HIP-3 deployer powering 24/7 perpetual contracts on the platform.
The Hyperliquid Policy Center launched in February 2026 as an independent 501(c)(4) organization focused on building a compliant path for Americans to access onchain derivatives. Today’s meeting marks one of its most visible engagements with the SEC since inception.
This comes as Hyperliquid has established itself as a major force in decentralized perpetuals trading. The talks reflect growing regulator interest in understanding high-performance onchain markets that operate continuously, including weekends.
$HYPE responded positively to the news, trading near $65 with intraday gains as investors priced in potential regulatory tailwinds for the ecosystem.
With the Crypto Task Force actively soliciting industry input, this meeting could influence future guidance on decentralized trading infrastructure. Further public comments or follow-up sessions are expected in the coming months as regulators work toward practical frameworks.
The discussion underscores a maturing phase in U.S. crypto policy, one where leading builders are moving from offshore innovation to direct dialogue with Washington.
South Korea’s crypto trading volume hit a two-year low, dropping below 10 trillion won ($6.7 billion) for the first time since September 2023.
The slump coincides with a dramatic collapse across the country’s stock markets.
Is South Korea Losing Its Crypto Market?
Trading volume measures the total value of assets bought and sold across exchanges over a set period. Weekly volume across South Korea’s five main fiat exchanges hit a two-year low, signaling a sharp cooling in overall market activity.
The five platforms include Upbit, Bithumb, Coinone, Korbit, and Gopax. In the week of July 3 to July 10, combined volume reached roughly 9.97 trillion won ($6.65 billion). Furthermore, that marks a 25.75% drop from the prior week’s 13.4 trillion won total ($8.9 billion).
The decline deepens over time. The current volume is about 43.5% below early June levels, according to WuBlockchain.
It marks the fifth consecutive weekly drop, reflecting a broad retreat in retail speculation nationwide.
Top 5 South Korean Exchanges’ Volume Falls for Five Straight Weeks, Below KRW 10 Trillion
According to Digital Asset, the weekly trading volume of South Korea’s top five fiat-market crypto exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax) has fallen for five consecutive… pic.twitter.com/0iko3rSLNY
Structural challenges add to the pressure. During the first quarter of 2026, combined volume had already fallen notably, with Bithumb dropping over 30%.
Furthermore, an operational error at Bithumb earlier this year damaged trust among cautious retail investors.
Tighter regulation compounded the caution. New limits on exchange ownership stakes reinforced a defensive mood. Consequently, many retail traders pulled back from the major platforms, deepening the multi-week slide in overall trading activity.
Why Are Crypto and the KOSDAQ Falling Together
The synchronized decline is no coincidence, given how South Korean investors move between tech stocks and crypto. Many traders speculate across both markets, so a decline in risk appetite in one quickly spreads to the other.
The KOSDAQ index has crashed 31% over the past 9 weeks, erasing nearly a full year of gains. That correction rivals the 2020 crash, when it fell 32% in five weeks.
— Global Markets Investor (@GlobalMktObserv) July 12, 2026
The AI trade sits at the center of the turmoil. Optimism around artificial intelligence is fading, especially after doubts over chip and semiconductor spending. Samsung and SK Hynix, along with leveraged ETFs, account for over 70% of traded market value, amplifying volatility.
As a result, that intervention adds pressure and pushes capital toward more defensive positions.
Shocking stat of the day:
The Memory ETF, $DRAM, has surpassed $25 billion in assets under management (AUM) for the first time, officially overtaking the 26-year-old South Korea ETF, $EWY, despite launching on April 2nd.
The U.S. Supreme Court has turned away a First Amendment challenge to the SEC’s Gag Rule without comment.
The SEC’s Gag Rule is a 50-year-old policy that stops defendants from publicly denying allegations after settling enforcement cases.
The SEC had already rescinded the policy in May, and the CFTC followed suit in June. The constitutional question remains unsettled, meaning a future administration could revive the restriction without a Supreme Court precedent blocking it.
US Supreme Court backs up SEC
Today, the U.S. Supreme Court decided to turn away a case regarding the SEC’s Gag Rule and whether or not it poses a challenge to the First Amendment.
The SEC adopted Rule 202.5(e) in 1972. It restricts defendants from publicly denying allegations after settling enforcement cases.
The court’s decision hands a procedural win to the SEC under Chairman Paul Atkins, as the agency already rescinded the rule in May. The case, Powell v. Securities and Exchange Commission, had been brought by the New Civil Liberties Alliance (NCLA) on behalf of Thomas Powell, who settled SEC charges in 2021 related to unregistered oil and gas securities offerings.
Powell had faced accusations of misrepresentations tied to more than a dozen unregistered securities offerings and agreed to pay a $75,000 penalty. His settlement barred him from publicly denying wrongdoing.
Critics of the rule included Elon Musk and Mark Cuban, both of whom argued it violated defendants’ speech rights. In May, the agency said it would not seek to reopen past settlements even if defendants now choose to speak publicly about their cases.
The SEC argued that rescinding the rule made the Powell case moot, but his lawyers pushed back hard.
The NCLA wrote in a reply brief filed early in June, stating that rules that can be “rescinded overnight, can also be reinstated overnight.” It added that the government has failed to provide the reassurance that the Gag Rule will not be enforced again later.
Former U.S. Solicitor General Greg Garre argued the court should have taken the case to formally establish that agencies cannot force Americans to abandon their First Amendment right.
What happens to crypto firms that have settled with the SEC?
Cryptopolitan previously reported that the Commodity Futures Trading Commission (CFTC) scrapped its own version of the rule, which had been in place since 1998, in June. The CFTC also confirmed it would not enforce existing no-deny clauses in past settlements.
The Gag Rule’s demise matters to the crypto industry because dozens of firms settled SEC enforcement cases in recent years and were forced to stay silent about the details.
The SEC has separately acknowledged what it called “flaws” in its prior crypto enforcement approach, dismissing seven cases against firms including Coinbase (NASDAQ: COIN), Binance, and Kraken.
It’s left to be seen if any defendants who settled under the old rule begin publicly contesting the SEC’s allegations now that the agency has updated its rules.
Don’t just read crypto news. Understand it. Subscribe to our newsletter. It’s free.
