According to the US Treasury, PM2BTC provided direct crypto-to-ruble exchange services using US-sanctioned financial institutions and has failed to maintain a credible and effective anti-money laundering and know your customer (KYC) program. FinCEN found that nearly half of PM2BTC’s exchange activity had links to illicit activity. Cryptex, too, has received over $51.2 million in funds derived from ransomware attacks and is associated with over $720 million in transactions to services frequently used by Russia-based ransomware actors and cybercriminals.

The Treasury also announced that other US and Dutch law enforcement agencies have taken coordinated actions against the exchanges, including seizure of web domains and/or infrastructure associated with PM2BTC and Cryptex.

The SEC lawsuit targets three defendants involved in the development and operation of Mango Markets: Mango Labs, a Wyoming corporation; Blockworks Foundation, an entity incorporated and domiciled in Panama; and Mango DAO, the platform’s governing body.

According to the charges, in August 2021, Mango DAO and Blockworks Foundation held an ICO of MNGO, raising over $70 million by offering 500 million tokens to global investors, including US investors. Blockworks Foundation managed the sale website and promoted it across various channels, including social media.

The SEC alleged that Mango DAO and Blockworks Foundation did not require KYC verification, allowing US investors to buy MNGO tokens. Discussions on social media suggested using VPNs to bypass restrictions, and the sale website received significant traffic from US users. The SEC argues these factors indicated that the geographical restrictions were ineffective in preventing US participation.

Additionally, the SEC contends that, alongside the ICO, Blockworks Foundation and Mango Labs acted as securities brokers for tokens on the Mango Markets platform. They provided significant managerial efforts to develop the platform before and after the Token Sale, including coding, creating website content, managing social media channels, and participating in governance proposals.

Without admitting the allegations, the three entities agreed to settle, paying nearly $700,000 in civil penalties, destroying their MNGO tokens, and refraining from future solicitation of trading MNGO.

The SEC’s order noted that Flyfish engaged in extensive marketing, promoting the NFTs as investment opportunities. Investors were informed they could potentially profit by reselling their NFTs or leasing them for passive income. Notably, 42% of investors purchased multiple NFTs, despite only needing one for membership.

Without admitting the allegations, Flyfish agreed to a cease-and-desist order, pay a $750,000 civil penalty, and comply with specific undertakings. These included destroying all unsold Flyfish NFTs still in the company’s possession by a specified deadline and ceasing the collection of any royalties from secondary market trades involving the NFTs.

The lawsuit further alleges that the SEC has overreached its authority by using enforcement actions to introduce new regulatory standards without following proper procedures, such as formal rulemaking under the Administrative Procedure Act (APA). Crypto.com is seeking declaratory and injunctive relief, asking the court to rule that the targeted network tokens are not securities, that Crypto.com does not act as an unregistered securities broker-dealer, and to prevent the SEC from enforcing its “Crypto Asset Security” rules against the company.

As part of the settlement, Uniswap Labs agreed to pay a $175,000 fine and cease violating the CEA. The CFTC also acknowledged that Uniswap cooperated with the investigation, which resulted in a reduced penalty.

As part of the settlement, eToro agreed to significantly restrict its cryptocurrency offerings for US customers. Following the case, eToro announced that only Bitcoin, Bitcoin Cash, and Ethereum will remain available for trading on its US platform. Customers have a 180-day window to sell any other crypto assets currently held on the platform, after which these assets will be liquidated, and proceeds returned to the customers’ accounts.

Among the key players were firms like Gotbit, ZM Quant, CLS Global, and MyTrade, which offered “market manipulation-as-a-service”. These firms used tactics like wash trading – where tokens are traded back and forth between accounts they controlled — to create the illusion of high trading activity. This tactic is illegal in traditional financial markets and was used here to inflate token prices, leading to so-called “pump and dump” schemes.

The DOJ announced that over $25 million in assets were seized in the crackdown, and several defendants, including Gotbit executives, have pleaded guilty or agreed to plead guilty. Some individuals were arrested outside the United States and facing extradition. The DOJ’s investigation was bolstered by cooperation from the FBI, IRS, and international law enforcement.

Cumberland conducted these transactions through its proprietary trading platform and other exchanges, marketing itself as a key liquidity provider in the crypto space. The complaint further alleges that Cumberland is engaging in trading crypto assets that are offered and sold as investment contracts on third-party crypto asset exchanges as part of its regular business.

Cumberland issued a defiant statement on its X account, criticizing the SEC’s approach as stifling innovation and asserting that it had engaged in good-faith discussions with the SEC for five years regarding the classification of its transactions.

Cumberland claims the SEC’s complaint is the first instance where specific transactions were outlined. They noted having acquired a registered broker-dealer in 2019 but were allegedly informed by the SEC that it could only facilitate trades in Bitcoin (BTC) or Ethereum (ETH), which Cumberland argues are commodities outside the SEC’s jurisdiction. Cumberland emphasized it would not alter its business operations or the assets it trades, expressing confidence in its compliance framework.

In its summary judgment, the court ruled that the RvT tokens were indeed securities under the Howey test, rejecting defendants’ argument that they were merely software products. The judge asserted that Rivetz encouraged potential purchasers to view the purchase of RvT tokens as an opportunity to invest in the security solution that Rivetz was developing and reap a financial reward as Rivetz’s technology increased demand for RvT tokens, thus meeting the Howey test second and third prong. Although the RvT tokens were functional as ERC-20 tokens on the Ethereum blockchain, the judge noted they had no inherent value at the time of the ICO because Rivetz had not yet developed the promised security ecosystem. Importantly, the ruling established that investors expected profits from Rivetz’s entrepreneurial efforts, Meeting a crucial criterion of the Howey test fourth prong. The court also considered the marketing materials used during the ICO, which emphasized the potential for profit and the company’s plans to increase the tokens’ value through its business efforts. Sprague, who represented himself in the case, did not dispute the key facts presented, which likely contributed to the SEC’s favorable outcome. As a result of this ruling, the SEC was instructed to work with Sprague to submit a proposal for injunctive and monetary relief, potentially including disgorgement of ill-gotten gains and civil penalties.

Under the new agreement, VASPs operating in or from Dubai or wishing to service the emirate of Dubai will need to obtain a license from VARA. Once licensed by VARA, licensees can be registered by default with the SCA to service the wider UAE. In contrast, VASPs wishing to operate out of any other Emirate, must be licensed by the SCA to do so. The agreement also covers the mechanism for mutual supervision of VASPs, penalty and fine imposition, the exchange of information and statistics, as well as cooperation in employee training and qualification.

The letter emphasizes the need for firms participating in Faster Payments (FPS) and CHAPS to reimburse customers swiftly when they fall victim to APP fraud, in line with new regulations under the Payment Systems Regulator (PSR). Additionally, the letter stresses that institutions must maintain adequate resources to meet these obligations and take fraud prevention seriously. The letter outlines expectations on how firms should handle the financial and operational impacts of the APP reimbursement scheme, including ensuring proper capital reserves and compliance with consumer protection duties.