SEC closes investigation into Immutable nearly 5 months after Wells notice  

A South Korean court temporarily lifted the partial business suspension on crypto exchange Upbit that had prohibited the trading platform from servicing new clients for three months. On Feb. 25, South Korea’s Financial Intelligence Unit (FIU) sanctioned the exchange, imposing a three-month ban on deposits and withdrawals for new clients. The FIU previously said the suspension was in response to Upbit’s violations of policies that prohibit exchanges from transacting with unregistered virtual asset service providers (VASPs). In response to the FIU’s sanction, Upbit’s parent company, Dunamu, filed a lawsuit against the FIU, seeking to overturn the partial suspension order. In addition, Dunamu requested an injunction to temporarily lift the suspension order. On March 27, local media Newsis reported that the court granted the injunction, moving the suspension order 30 days after a court judgment is reached. This allows Upbit to service new clients while the legal battle continues. Upbit investigations led to a 3-month suspension orderFounded in 2017, Upbit is South Korea’s largest crypto exchange. On Oct. 10, the country’s Financial Services Commission (FSC) initiated an investigation into Upbit for potential breaches of the country’s anti-monopoly laws. In addition to anti-monopoly breaches, the exchange is suspected of violating Know Your Customer (KYC) rules. On Nov. 15, the FIU identified up at least 500,000 to 600,000 potential KYC violations of the exchange. The regulator spotted alleged breaches while reviewing the exchange’s business license renewal. In 2018, South Korean regulators ended anonymous crypto trading for its citizens. With the new development, users must pass KYC procedures before being allowed to trade digital assets on crypto trading platforms like Upbit. Apart from these allegations, the FIU accused Upbit of facilitating 45,000 transactions with unregistered foreign crypto exchanges. This violates the country’s Act on Reporting and Using Specified Financial Transaction Information.Related: South Korea plans to regulate cross-border stablecoin transactionsSouth Korea cracks down on overseas exchangesOn Oct. 25, 2024, South Korea strengthened its oversight of cross-border crypto asset transactions. The country’s finance minister, Choi Sang-Mok, said the government will introduce a reporting mandate for businesses that handle cross-border transactions with digital assets. This aims to promote preemptive monitoring of crypto transactions “used for tax evasion and currency manipulation.”In line with the rules, South Korea’s Google Play blocked the applications of 17 crypto exchanges at the request of the FIU. The FIU said it’s also working to restrict exchange access using the internet and Apple’s App Store. Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express

A coalition of crypto firms has urged Congress to press the Department of Justice to amend an “unprecedented and overly expansive” interpretation of laws that were used to charge the developers of the crypto mixer Tornado Cash.A March 26 letter signed by 34 crypto companies and advocate groups sent to the Senate Banking Committee, House Financial Services Committee and the House and Senate judiciary committees said the DOJ’s take on unlicensed money-transmitting business means “essentially every blockchain developer could be prosecuted as a criminal.”The letter — led by the DeFi Education Fund and signed by the likes of Kraken and Coinbase — added that the Justice Department’s interpretation “creates confusion and ambiguity” and “threatens the viability of U.S.-based software development in the digital asset industry.”The group said the DOJ debuted its position “in August 2023 via criminal indictment” — the same time it charged Tornado Cash developers Roman Storm and Roman Semenov with money laundering.Storm has been released on bail, has pleaded not guilty and wants the charges dropped. Semenov, a Russian national, is at large.Source: DeFi Education FundThe DOJ has filed similar charges against Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill, who have both pleaded not guilty.The crypto group’s letter argued that two sections of the US Code define a “money transmitting business” — Title 31 section 5330, defining who must be licensed and Title 18 section 1960, which criminalizes operating unlicensed.It added that 2019 guidance from the Treasury’s Financial Crimes Enforcement Network (FinCEN) gave examples of what money-transmitting activities and said that “if a software developer never obtains possession or control over customer funds, that developer is not operating a ‘money transmitting business.’”The letter argued that the DOJ had taken a position that the definition of a money transmitting business under section 5330 “is not relevant to determining whether someone is operating an unlicensed ‘money transmitting business’ under Section 1960” despite the “intentional similarity” in both sections and FinCEN’s guidance.Related: Hester Peirce calls for SEC rulemaking to ‘bake in’ crypto regulation The group accused the DOJ of ignoring both FinCEN’s guidance and parts of the law to pursue its own interpretation of a money-transmitting business when it charged Storm and Semenov.They said the result had seen “two separate US government agencies with conflicting interpretations of ‘money transmission’ — an unclear, unfair position for law-abiding industry participants and innovators.”The letter said that if not addressed, the Justice Department’s interpretation would expose non-custodial software developers “within the reach of the U.S. to criminal liability.”“The resulting, and very rational, fear among developers would effectively end the development of these technologies in the United States.”In January, Michael Lewellen, a fellow of the crypto advocacy group Coin Center, sued Attorney General Merrick Garland to have his planned release of non-custodial software declared legal and to block the DOJ from using money transmitting laws to prosecute him.Lewellen said the DOJ “has begun criminally prosecuting people for publishing similar cryptocurrency software,” which he claims extended the interpretation of money-transmitting laws “beyond what the Constitution allows.”Magazine: Meet lawyer Max Burwick — ‘The ambulance chaser of crypto’  

The US Senate has passed a resolution to kill a Biden administration-era rule to require decentralized finance (DeFi) protocols to report to the Internal Revenue Service, which will now head to US President Donald Trump’s desk.On March 26, the Senate voted 70-28 to pass a motion repealing the so-called IRS DeFi broker rule that aimed to expand existing IRS reporting requirements to crypto.The Senate had voted to pass the resolution earlier in March, which also passed the House, but it was sent back to the Senate for a final vote before it could be sent to Trump.The White House’s AI and crypto czar, David Sacks, has said Trump supports killing the rule.This is a developing story, and further information will be added as it becomes available.