Crypto Regulation and Compliance Updates

Polymarket partners with Kaito AI to launch the "Attention Market," allowing users to bet on trend popularity and public opinion. Based on two main indicators—public sentiment share and emotional tone—the platform quantifies attention using social data. The project was launched in March and reached thousands of markets by the end of the year, with the initial focus on AI topics. Massachusetts and other states have banned prediction markets, leading Polymarket to sue the state, asserting federal regulation.

February 11 News, the White House led a new round of consultations with representatives from the cryptocurrency and banking industries regarding the stablecoin provisions in the Crypto Market Structure Act. Participants generally described the meeting as "productive," but no consensus has been reached on the core disagreements. Ripple Chief Legal Officer Stuart Alderoty posted on X platform stating that both sides are trying to find room for compromise, and both parties remain optimistic about the legislation on the crypto market structure. He emphasized that this is a critical window of opportunity to advance the implementation of the US crypto regulatory framework.

Former SafeMoon CEO Braden John Karony was sentenced to 100 months in prison and ordered to pay approximately $7.5 million in illegal proceeds for defrauding investors. He allegedly transferred $9 million worth of assets from the company to fund a luxurious lifestyle. A federal jury found him guilty of conspiracy to commit securities fraud and money laundering. SafeMoon once had a market capitalization of over $8 billion, but it was actually a scam.

The Hong Kong Securities and Futures Commission has officially announced the "Accelerator" program tender, aimed at optimizing regulatory and market communication. Meanwhile, Ye Zhiheng added measures for financial funding and perpetual contracts to ensure two-way interaction and participation of professional investors, promoting global liquidity connectivity.

The White House held its second meeting on Tuesday, attempting to mediate the disagreement between the banking industry and the crypto industry over stablecoin yield issues. However, TradFi bank representatives brought a "principles document" insisting on a complete ban. The document calls for prohibiting any financial or non-financial incentives to stablecoin holders, emphasizing that stablecoin activities must never trigger deposit outflows.

The Japanese Financial Services Agency has released a draft of the cybersecurity enhancement guidelines, publicly soliciting opinions until March 11. The draft emphasizes the need to strengthen security management across the entire supply chain of encrypted exchanges to counter increasingly sophisticated cyberattacks, and proposes a three-pillar approach of "self-help, mutual aid, and public assistance."

The EU is considering a ban on all crypto transactions with Russia to prevent Moscow from circumventing sanctions imposed due to the Ukraine conflict. The proposal aims to target Russian crypto entities that support military operations and to restrict exports to Kyrgyzstan due to concerns over arms trade.

Hong Kong Securities and Futures Commission Chief Executive Julia Leung stated at Consensus 2026 that an ecosystem for virtual asset regulation will be established, along with three new initiatives, including allowing brokers to provide virtual asset financing for clients, establishing a regulatory framework for perpetual contracts, and relaxing related market maker regulations. Tokenized asset management is growing rapidly, and the SFC has authorized multiple tokenized funds and plans to work with the SAR government to advance legislation.

Foresight News reports that the Central Bank of Malaysia stated that testing will enable the central bank to assess the impact of (stablecoins and tokenized deposits) on monetary and financial stability, and to provide a basis for policy directions in these specific areas. Clearer guidelines are expected to be provided by the end of 2026 regarding the use of Ringgit stablecoins and tokenized deposits.

On February 11, U.S. cryptocurrency and banking industry executives held a meeting at the White House to discuss the stablecoin yield and related market structure legislation. Both parties described the talks as "productive," but no agreement was reached on key issues. Participants included Ripple, the Cryptocurrency Innovation Committee, the Blockchain Association, as well as major banks such as Goldman Sachs, Citigroup, JPMorgan Chase, and representatives from the American Bankers Association. During the meeting, banks took a hard stance on stablecoin yields. According to leaked documents, the banks proposed a set of "prohibition principles," advocating for a complete ban on any financial or non-financial benefits related to holding or using payment stablecoins, and strict enforcement of anti-avoidance measures to prevent any form of yield or interest promotion beyond the limits. This position goes beyond the latest draft of the Market Structure Bill, which only prohibits passive holding of stablecoin-generated yields but allows limited active reward activities. The banks emphasized that any yield exemptions should be strictly restricted.

Russia is restricting access to Telegram to enhance digital control, citing legal issues. This move favors state-backed app Max and threatens the crypto sector that relies on Telegram, potentially shifting users and reshaping the digital economy.

The European Union proposes a comprehensive ban on cryptocurrency transactions with Russia, covering all Russian service providers and digital rubles. Kyrgyzstan's imports from the EU have increased by 800%, and exports to Russia have surged by 1,200%. The proposal is part of the 20th round of sanctions, expected to be agreed upon before the four-week mark of the Russia-Ukraine war on February 24, requiring unanimous approval from 27 member countries.

Google's security team Mandiant has released a report stating that North Korea-linked hacker group UNC1069 is using AI-generated fake videos and fake Zoom meetings to carry out targeted attacks on cryptocurrency and fintech companies, hijacking Telegram accounts, tricking victims into executing malicious commands, and stealing sensitive data.

Google Mandiant Security Team Report States that North Korean hacker group UNC1069 uses AI-generated fake videos and fake Zoom meetings to launch cyberattacks on cryptocurrency and fintech companies, trick victims into running malicious software, and steal important data.

FTX co-founder Sam Bankman-Fried has officially filed a motion requesting a retrial of his 25-year prison sentence, claiming that two former executives can serve as new witnesses to counter the fraud allegations against him, and requesting a change of trial judge to avoid bias.

ChainCatcher News, 84-year-old Nancy Guthrie was kidnapped. The kidnappers sent ransom letters to TMZ and two local TV stations, demanding a $6 million Bitcoin ransom.

February 11 News, Hong Kong continues to strengthen its position as an Asian hub for digital assets and Web3 innovation. Hong Kong SAR Chief Executive John Lee delivered a video speech at the CoinDesk Consensus Hong Kong Conference, stating that the SAR government will support the development of the local digital asset ecosystem in the long term and provide a predictable business environment for global crypto companies through a clear and robust regulatory framework. John Lee pointed out that over the past few years, Hong Kong has systematically established a regulatory system for digital assets, aiming to promote the expansion of the Web3 industry on a compliant, transparent, and sustainable basis. He emphasized that Hong Kong also connects Mainland China and international financial markets, possessing dual advantages under the "One Country, Two Systems" framework that are difficult for other cities to replicate. This gives it a unique competitive edge in virtual asset innovation, capital flow, and institutional stability.

Pi Network has fallen from a high of $3 to around $0.14. X users accuse the team of years of promises with no mainnet, only a mobile mining show, calling it the longest-running scam disguised as Web3. The project team is about to unlock 250 million tokens, with an average of 8.3 million per day, releasing 23.6 million on February 13. The RSI is at 35, approaching oversold levels, suggesting a possible rebound.

The Russian State Duma has passed a law establishing procedures for the confiscation and freezing of cryptocurrencies in criminal cases, confirming their legal status as property and requiring detailed record-keeping. The bill must be approved by the Federation Council and signed by the President. Once enacted, it will allow confiscated cryptocurrencies to be transferred to the national wallet.

Bitcoin (BTC) remains in a downturn, temporarily trading around $69,160 on February 11. Federal Reserve Board member Waller warned that the cryptocurrency boom is fading as it remains closely linked to traditional finance (TradFi). The former SafeMoon CEO was sentenced to 8 years in prison for a cryptocurrency scam and ordered to forfeit approximately $7.5 million and two residential properties.