This article mainly focuses on the anti-money laundering (AML) landscape and data in the blockchain ecosystem. As the crypto ecosystem has been developing rapidly, the importance of AML regulations and compliance policies has become increasingly prominent. In 2024, a series of key measures were introduced by various countries and regions in areas such as stablecoin regulations, law enforcement actions, AML sanctions, and global regulatory policies, to address the challenges of the digital asset market. These initiatives not only aim to curb money laundering and fraud, but also explore the balance between innovation and risk control. This article will analyze the latest developments in stablecoin regulations, the enforcement dynamics of the U.S. Securities and Exchange Commission (SEC), AML sanctions targeting cryptocurrencies, and regulatory policies across the globe, to help readers gain a deeper understanding of the core trends and future directions of the current AML landscape.
AML Landscape
Stablecoin Regulations
As global financial authorities have become increasingly aware of the growing influence and risks of digital assets, stablecoin regulations have become a focus in 2024. The collapse of in 2022 clearly reminded people of the vulnerabilities in the market, prompting stricter and more explicit global regulations on stablecoins. This year has been a turning point, with regions enacting legislation and policies to address the unique challenges posed by stablecoins, while also promoting innovation in the digital economy.
China: The People's Bank of China, in its 2024 report[1], discussed the global dynamics of cryptocurrency regulations, particularly mentioning the progress of crypto compliance in Hong Kong, and emphasized the need to strengthen the regulation of crypto assets.
Hong Kong, China: On December 6, 2024, the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau issued the Ordinance Bill[2], aiming to introduce a regulatory regime for fiat-backed stablecoin issuers and enhance the regulatory framework for virtual asset activities in Hong Kong.
European Union: The EU has approved the Markets in Crypto-Assets (MiCA) regulation[3], establishing the world's first comprehensive and clear virtual asset regulatory framework, which is planned to be implemented by the end of 2024. The requirements include that stablecoin issuers must obtain an electronic money license, maintain sufficient reserves, and comply with strict transaction monitoring standards. Limited, the issuer of the most widely used stablecoin , failed to meet these requirements, leading to the withdrawal of from the EU compliance platform as of December 30, 2024.
Brazil: The Central Bank of Brazil (BCB) plans[4] to regulate stablecoins and asset tokenization by 2025. In November 2024, BCB proposed a regulatory framework that would prohibit users from withdrawing stablecoins from centralized exchanges to self-custody wallets, but in December, it indicated that the ban might be revoked if key issues such as transaction transparency could be improved.
United States: Stablecoin issuers are now required to maintain a 1:1 reserve, a provision[5] that has received support from ongoing legislative discussions.
Middle East: The United Arab Emirates introduced a dedicated stablecoin license under its Virtual Assets Regulatory Authority (VARA)[6], indicating the region's intention to take a leading role in regulatory transparency. Qatar has also included stablecoins in its first digital asset framework, marking progress in crypto regulations.
SEC Enforcement
The U.S. Securities and Exchange Commission (SEC) released its enforcement results for the 2024 fiscal year in November[7]. The report shows that the SEC initiated 583 enforcement actions, a 26% decrease from 2023. The enforcement actions resulted in $8.2 billion in penalties, the highest amount ever.
Among these cases, the SEC filed 431 "standalone" actions, a 14% decrease from 2023; 93 "follow-on" administrative proceedings, aimed at barring or suspending individuals from certain securities industry roles based on criminal convictions, civil injunctions, or other orders, a 43% decrease from 2023; and 59 actions against issuers for alleged failures to file required documents with the SEC, a 51% decrease from 2023. The $8.2 billion in financial remedies included $6.1 billion in disgorgement and pre-judgment interest, the highest amount ever, as well as $2.1 billion in civil penalties, the second-highest amount ever. Approximately 56% of the $8.2 billion in financial remedies was attributed to the SEC's victory in its case against Labs and Do Kwon, one of the largest securities fraud cases in U.S. history. Additionally, in 2024, the SEC obtained orders barring 124 individuals from serving as officers and directors of public companies, the second-highest number of such bars in a decade.
In the 2024 fiscal year, the SEC distributed $345 million to harmed investors, and has returned over $2.7 billion to investors since the 2021 fiscal year. The SEC also received 45,130 tips, complaints, and referrals in the 2024 fiscal year, the highest number ever, including over 24,000 whistleblower tips, more than 14,000 of which were submitted by two individuals. The SEC awarded a total of $255 million in whistleblower awards.
The SEC stated that the diverse enforcement actions taken in 2024 demonstrate its efforts to keep pace with emerging threats, such as AI-driven misrepresentations and social media-enabled relationship scams, while continuing to focus on perennial investor risks, such as material misstatements, internal control deficiencies, and significant gatekeeper failures.
Terraform Labs Settlement: Labs agreed to a $4.5 billion settlement with the SEC over the collapse of its and cryptocurrencies. The settlement includes $3.5 billion in disgorgement, $460 million in interest, $420 million in civil penalties, and a $200 million personal contribution from former CEO Do Kwon.
Jump Trading Penalty: Jump Trading Group agreed to pay the SEC $123 million to settle charges that its subsidiary, Tai Mo Shan, misled investors about the stability of , the stablecoin that collapsed in 2022.
Cumberland DRW Charged: The SEC charged the cryptocurrency division of DRW Holdings, Cumberland DRW, for operating as an unregistered securities broker-dealer. The lawsuit alleges that Cumberland profited by millions of dollars through trading with hedge funds and large market participants without proper registration.
AML Sanctions
May 2024, Hong Kong Order against Worldcoin: The Office of the Privacy Commissioner for Personal Data in Hong Kong issued an enforcement notice to the Worldcoin Foundation, directing it to cease all operations in the region due to privacy and personal data issues. Worldcoin was instructed to stop scanning and collecting the public's iris and facial images, reflecting Hong Kong's commitment to protecting personal data in the crypto domain.
May 2024, Two Chinese Nationals Arrested: The U.S. Department of Justice arrested two Chinese nationals, Daren Li and Yicheng Zhang, for orchestrating a large-scale cryptocurrency "pig butchering" scam that resulted in at least $73 million in money laundering.
May 2024, U.S. Treasury Sanctions Iranian Crypto Mining Activities: The U.S. Treasury Department, through its Office of Foreign Assets Control (OFAC), expanded sanctions on Iranian virtual currency mining, particularly targeting entities and individuals using mining to evade international sanctions.
In September 2024, over $6 million in cryptocurrency Ponzi scheme seized: The U.S. Department of Justice announced the seizure of over $6 million in cryptocurrency from Southeast Asian criminals. They had targeted U.S. residents through a fraudulent "pig butchering" scam. The FBI tracked the victims' funds on the chain and identified multiple cryptocurrency wallet addresses holding the illicit funds.
In September 2024, the U.S. sanctions Russian cybercriminals: The U.S. Treasury Department sanctioned Sergey Ivanov and Cryptex for allegedly laundering money for cybercriminals and vendors. The U.S. Treasury Department's Financial Crimes Enforcement Network also designated the Russian cryptocurrency exchange PM2BTC as a significant money laundering threat.
In December 2024, the U.S. sanctions North Korean virtual currency money laundering network: The U.S. imposed sanctions on two individuals and one entity under Executive Order 13382 to disrupt the Democratic People's Republic of Korea's funding of its illicit weapons of mass destruction and ballistic missile programs through virtual currency money laundering.
In December 2024, the U.S. charges LockBit ransomware developers: The U.S. charged Rostislav Panev, a dual Russian-Israeli national, for developing and maintaining the LockBit ransomware code and earning over $230,000 in cryptocurrency for his work. Panev was arrested in Israel and is awaiting extradition to the U.S.
Regulatory Policies
1. Asia-Pacific
China: In December 2024, the People's Bank of China released the China Financial Stability Report (2024) [1], which discussed global cryptocurrency regulatory dynamics in detail and highlighted Hong Kong's progress in cryptocurrency compliance. Given the potential spillover risks of crypto assets to financial system stability, regulators worldwide have been increasing their oversight of crypto assets. The report noted that 51 countries and regions have introduced bans on crypto assets, and some economies have adjusted their existing laws or enacted new legislation to regulate them. Additionally, Hong Kong is actively exploring crypto asset licensing management, dividing virtual assets into securitized financial assets and non-securitized financial assets, and implementing a "dual license" system for virtual asset trading platform operators.
Hong Kong, China: In April 2024, Hong Kong approved [8] spot Bitcoin and Ethereum exchange-traded funds (ETFs), providing investors with new investment channels; the Hong Kong Securities and Futures Commission (SFC) added 4 new virtual asset exchange license holders, strengthening its oversight of trading platforms; Hong Kong launched a stablecoin sandbox and related legislation, aiming to establish a clear regulatory framework for the issuance and use of stablecoins.
Japan: Advanced cryptocurrency tax reforms [9] reduced trading profit tax to 20% and emphasized strengthening exchange and issuer compliance with anti-money laundering and KYC requirements.
South Korea: Enacted the Virtual Asset User Protection Act [10] to strengthen investor safety and regulate cross-border cryptocurrency transactions.
Vietnam: The Vietnamese government issued the National Blockchain Development Strategy [11], aiming to position itself as a regional leader by 2030. However, virtual currencies remain unclassified and prohibited as legal tender, prompting efforts to balance innovation and crime prevention.
Singapore: The Monetary Authority of Singapore (MAS) revised the Payment Services Act [12], expanding the scope of regulated payment activities to include digital payment token services and requiring relevant service providers to apply for the corresponding licenses. MAS has approved at least 19 cryptocurrency service providers for major payment institution licenses, allowing them to provide digital payment token services.
Malaysia: The Securities Commission of Malaysia published a list of 6 approved cryptocurrency exchanges [13], requiring unauthorized entities to immediately cease operations and refund investors' funds.
2. North America
United States: The approval of Bitcoin and Ethereum ETFs marked a milestone in the mainstream adoption of cryptocurrencies. The SEC approved a spot Bitcoin ETF on January 10, 2024 [14] and an Ethereum ETF on May 23, 2024 [15], with the Ethereum spot ETF officially trading on July 23, 2024. As of 2024, the net asset value of the U.S. Bitcoin spot ETF was $105.08 billion (5.7% of the Bitcoin market cap), and the net asset value of the Ethereum spot ETF totaled $12.05 billion (2.94% of the Ethereum market cap). In terms of legislation, the 21st Century Financial Innovation and Technology Act (FIT21) [16] clarified the classification of cryptocurrencies and retained the current cryptocurrency custody accounting standards despite the rejection of SAB 121. The innovation-friendly policies of the Trump administration, including the appointment of cryptocurrency advocates like Paul Atkins as SEC chair, demonstrated strong support for the industry.
Canada: Canada continued to refine its cryptocurrency regulatory framework [17], emphasizing the regulation of cryptocurrency exchanges and service providers to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) requirements. The Canadian Securities Administrators (CSA) strengthened the oversight of crypto asset investment products, requiring higher transparency and investor protection measures.
3. Europe
Russia: In 2024, Russia accelerated cryptocurrency regulation to mitigate the impact of Western sanctions, focusing [18] on the use of digital assets for international trade. President Vladimir Putin legalized cryptocurrency mining and allowed the use of mined assets for cross-border transactions, enabling Russia to bypass the traditional financial system. The authorities also considered using stablecoins (particularly those pegged to the renminbi or BRICS currencies) for cross-border payments and established two cryptocurrency exchanges under central bank supervision to facilitate foreign trade.
European Union: The Markets in Crypto-Assets (MiCA) regulation [19] fully came into effect across the EU on December 30, 2024, making Europe the first region to implement a unified cryptocurrency regulatory framework. It set strict requirements for stablecoin issuers, including reserve backing and rigorous operational standards, while also strengthening consumer protection.
United Kingdom: The UK Financial Conduct Authority (FCA) will develop [20] a comprehensive cryptocurrency regulatory regime by 2026, building on the EU's MiCA framework.
4. Middle East and Africa
United Arab Emirates: The UAE consolidated [21] its global leadership in cryptocurrency regulation through its Virtual Assets Regulatory Authority (VARA) and issued 13 new licenses in 2024. It also introduced stablecoin licensing to adapt to evolving market demands.
Saudi Arabia: Emerged as the fastest-growing crypto economy in the region, leveraging blockchain innovation and piloting a central bank digital currency (CBDC) program [22].
Qatar: Launched [23] its first digital asset regulatory framework, marking a significant step towards the acceptance of digital assets and stablecoins.
5. Latin America
Argentina: Adopted a compliance framework for virtual asset service providers (VASPs) [24] and plans to achieve currency-free circulation, including Bitcoin.
