Google Play Store introduced licensing requirements for cryptocurrency wallet applications across 15 jurisdictions, including the US and the EU.

According to a report by the Rage, developers must obtain regulatory approvals before publishing apps on the platform.

Furthermore, the policy requires software wallet developers to comply with local financial regulations “to ensure a safe and compliant ecosystem for users.” 

The requirements apply to both custodial and non-custodial wallets, creating compliance burdens that many developers cannot meet.

In the US, developers must register with FinCEN as a Money Services Business (MSB) and obtain state money transmitter licenses, or operate as federally or state-chartered banking entities.

MSB registration requires adherence to strict Anti-Money Laundering, Counter Terrorist Financing, and Know Your Customer frameworks.

Policy exceeds legal requirements

The report noted that Google’s requirements extend beyond current legal obligations for non-custodial wallets. 

FinCEN’s 2019 guidance on Convertible Virtual Currencies distinguishes between “hosted” custodial and “unhosted” non-custodial wallets, explicitly stating that non-custodial wallets do not qualify as money transmitters under existing regulations.

The compliance programs required of MSBs represent the highest cost burden for financial institutions and would effectively exclude most non-custodial wallet developers from the Play Store. 

The policy forces AML and KYC requirements on all non-custodial wallets available through standard Google devices.

Industry criticism mounts

Consensys lawyer Bill Hughes highlighted the policy inconsistencies on August 1, noting that Google announced the updated policy on July 10 without clearly defining “software wallet” terminology. 

Hughes observed that registering as an MSB is “something FinCEN has specifically and clearly not required” for non-custodial wallets.

He added:

“They don’t define the term and do not acknowledge that registering as an MSB is something FinCEN has specifically and clearly not required.”

He noted Google’s broader statement that cryptocurrency activities “should be conducted through certified services in regulated jurisdictions,” despite certification not being legally required.

Hughes characterized the situation as “a bit of a mess” and warned that “the final boss for crypto is now more likely to be the Big Tech platforms that still dictate the major crypto app distribution channels.”

Justin Slaughter, vice president of regulatory affairs at Paradigm, criticized the policy as particularly problematic given Google’s ongoing antitrust litigation. 

He said:

“Surprising move here by Google, especially amid their antitrust litigation, to suddenly place draconian restrictions on persons making non-custodial wallets available on the App Store.”

Slaughter referenced pending congressional legislation, noting that “pure coding should not require a federal license” as outlined in draft bills addressing cryptocurrency regulation.

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Web3 MMORPG MapleStory N has faced a surge in cheating, automated bots, and game exploitation since launching in May, and is now banning thousands of abusers every day to address the issue.

The game, which allows players to earn cryptocurrency through in-game activity, has become a target for users looking to extract value through dishonest means including using bots to farm items and exploiting game mechanics to gain an unfair advantage.

Nexpace has implemented multiple security and economic measures in response, including improved cheat detection, delays on withdrawals, and mechanisms to contain and potentially reclaim compromised assets.

Key Insights

• Thousands of accounts are being banned daily in response to botting, cheating, and abuse
• A clawback mechanism is in place to recover digital assets from banned accounts
• Nexpace says abusers are spending more than they’re able to extract

How is MapleStory N fighting against abusers?

Nexpace has adopted several layered approaches to respond to the scale and speed of abuse targeting MapleStory N such as a 30-hour delay before users can withdraw in-game assets to external wallets. This matches the average detection window for accounts engaged in abnormal activity and by delaying withdrawals, the team aims to prevent dishonest players from profiting before they are banned.

The team has also restricted how assets move out of Henesys, MapleStory N’s dedicated Layer 1 blockchain, to help contain any damage from exploited assets and limits their reach beyond the game environment.

Cheat detection and monitoring systems have also been upgraded to track irregular gameplay patterns, including automated farming or use of exploits. Reports from players have helped highlight cases such as defeating endgame bosses with insufficient equipment—suggesting manipulation of game systems.

If a significant amount of the game’s economy is tied up in banned accounts, Nexpace says it can initiate a controlled “clawback” of assets. This function is secured through a multi-signature process and would only be used under exceptional circumstances, with community input.

What’s next for MapleStory N?

Nexpace acknowledges that MapleStory N’s open and low-friction onboarding system makes it easy for banned users to return with new wallets. The team is currently exploring options to introduce minimal barriers or verification methods that would deter repeated abuse without discouraging legitimate players.

Although the volume of abuse has been high, Nexpace says that most exploiters are spending more in the system than they are withdrawing. This reduces the long-term financial impact on the game’s ecosystem, but security measures will remain in place.

Future decisions, such as invoking the asset clawback mechanism, would involve the player community and depend on the scale of disruption. For now, Nexpace says the value of compromised assets is not high enough to warrant such action.

As MapleStory N continues to operate, the developers have stated they will maintain a strong focus on enforcement and monitoring to support fair play and stability within the blockchain-enabled game environment.

The state of Connecticut is barring itself and its local governments from being able to invest in digital assets.

Connecticut has passed House Bill 7082, which bans state and local governments from being able to invest in crypto assets as well as accept them as payments starting October.

“(Effective October 1, 2025) Neither the state nor any political subdivision of the state shall (1) accept or require payment in the form of virtual currency for an amount due to the state or the political subdivision, or (2) purchase, hold, invest in or establish a reserve of virtual currency.”

The bill also prohibits the state from establishing a crypto strategic reserve, a concept already signed off on by President Donald Trump at the federal level.

Though the number of bills attempting to follow the Federal government’s footsteps to establish a strategic Bitcoin (BTC) reserve has risen to 31, Connecticut joins a handful of states that have rejected the idea in one way or another, including Montana, Wyoming, South Dakota, North Dakota, Oklahoma, Arizona, Utah, Florida and Pennsylvania.

House Bill 7082 – which received bipartisan support – was voted on by the State’s Congress on May 30th and received 148 votes in favor and zero votes against it from the House of Representatives and 36 votes in favor and zero votes against it from the Senate, according to state records.

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Crypto casinos reportedly raked in tens of billions of dollars last year from gamblers despite regulatory prohibitions.

According to a new report by the Financial Times, gamblers are increasingly placing bets using cryptocurrencies on unregulated offshore platforms by circumventing bans in their home countries.

In 2024, crypto casinos generated $81.4 billion in gross gaming revenue (GGR), the difference between bets taken in and winnings paid out, says The Financial Times, citing research by the anti-online-crime platform Yield Sec.

The gross gaming revenue last year was five times more than it was in 2022.

Says Yield Sec founder Ismail Vali,

“It’s explosive growth everywhere.”

Crypto gambling sites are blocked in many countries, including the US, China, the EU and the UK. But gamblers are getting around the ban by using a VPN, mirror links or URL redirection, reports the Financial Times, citing experts and former users.

Crypto gaming sites, including Stake, Rollbit and Roobet, are based in jurisdictions where digital asset gambling is legal, including Curaçao, Malta, the Isle of Man and Gibraltar.

Stake, operated by Curaçao-incorporated Medium Rare, pulled in $4.7 billion in GGR last year, up 80% from 2022, according to the company. Stake says its operations “are conducted in full compliance with applicable laws and regulations, are legitimate and are fully licensed,” and that “stringent know your customer procedures and anti-money-laundering processes” are in effect for creating accounts on Stake.

However, Financial Times says it was able to create a Stake crypto gambling account from London using a VPN and was not asked for proof of address until after starting to play.

YieldSec estimates there are tens of thousands of crypto casinos worldwide, serving tens of millions of users.

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BaFin, Germany’s financial regulator, banned all public sales of Ethena GmbH’s USDe token this week, citing flaws in the approval process and violations of the European Union’s Markets in Crypto-Assets Regulation (MiCAR).

The regulator outlined several immediate actions against Ethena GmbH to enforce the ban.

According to BaFin, the synthetic dollar token had been offered as an unregistered security in Germany, prompting the authority to restrict its operations without delay.

BaFin Orders Asset Freeze and Website Shutdown for USDe Token

In its announcement, BaFin instructed Ethena GmbH to freeze the reserve assets backing the USDe token and halt all new customer registrations.

The company must also shut down its website, and a special representative has been appointed to oversee compliance with these directives.

“The BaFin also has reasonable grounds to suspect that Ethena GmbH in Germany sells securities in the form of sUSDe tokens from Ethena OpCo. Ltd. without the required prospectus,” the regulator said.

“The USDe and sUSDe tokens are interconnected in such a way that investors can receive a sUSDe token in exchange for a USDe token,” it added.

Despite the prohibition on primary sales and issuance, secondary market trading of USDe remains unaffected by the ban.

BaFin identified “serious deficiencies” in Ethena GmbH’s approval process, including noncompliance with MiCAR’s capital and asset reserve requirements.

Ethena GmbH had been operating under a transitional provision that allows issuers of asset-referenced tokens to continue business while awaiting regulatory approval.

The company applied for authorization on July 29, 2024, a day before the deadline, and has been issuing USDe in Germany since June 28, 2024.

Currently, approximately 5.4 billion USDe tokens are in circulation, with a substantial portion issued outside Germany before MiCAR took effect.

To safeguard customer interests, BaFin has ordered the company’s asset reserves to block and restrict the authority of its managing directors over those funds.

Holders of USDe tokens cannot redeem them directly with Ethena GmbH, though trading on secondary markets continues as normal.

BaFin’s statement also raised concerns about the company issuing sUSDe tokens, suggesting they could constitute unregistered securities.

The tokens are linked to USDe, allowing investors to exchange them while receiving additional returns.

The regulator is now considering further enforcement actions, which could include a complete ban on the public offering of these securities.

BaFin is overseeing the authorization process in collaboration with the European Central Bank (ECB), the European Banking Authority (EBA), and the European Securities and Markets Authority (ESMA).

Further details will be provided upon completion of the licensing process.

Ethena Defends USDe Token Amid BaFin Ban

Following BaFin’s ban on USDe in Germany, Ethena Labs reassured users that redemptions remain unaffected through its British Virgin Islands-based entity, Ethena BVI Limited.

The company, addressing the situation on X, stated that while its German subsidiary’s MiCAR application was denied, USDe remains fully backed.

“We are disappointed by this decision but will continue evaluating alternative regulatory frameworks,” Ethena wrote.

The firm also dismissed claims that its assets were frozen, clarifying that all funds remain accessible.

It plans to update its terms in the coming week to reflect the regulatory developments.

Ethena’s regulatory challenges come as institutional interest grows.

Recent investments include a $20 million backing from MEXC and a 500,000 ENA token purchase by World Liberty Financial.

BaFin Tightens Oversight on Synthetic Assets Across Europe

BaFin’s decision reflects the regulator’s cautious approach towards crypto assets operating within Germany’s jurisdiction.

Its ban on Ethena’s USDe token highlights the tightening regulatory grip on stablecoins and synthetic dollar tokens in Germany and across Europe.

With MiCAR enforcement ramping up, stablecoin and synthetic asset issuers will face increased scrutiny over compliance with capital, reserve, and disclosure requirements.

The outcome of BaFin’s assessment of Ethena GmbH could set a precedent for how synthetic dollar tokens are regulated under MiCAR across the EU.

Frequently Asked Questions (FAQs)

The post BaFin Bans Ethena’s USDe Token in Germany Over Approval Process Flaws appeared first on Cryptonews.

OpenAI says it blocked several North Korean hacking groups from using its ChatGPT platform to research future targets and find ways to hack into their networks.

“We banned accounts demonstrating activity potentially associated with publicly reported Democratic People’s Republic of Korea (DPRK)-affiliated threat actors,” the company said in its February 2025 threat intelligence report.

“Some of these accounts engaged in activity involving TTPs consistent with a threat group known as VELVET CHOLLIMA (AKA Kimsuky, Emerald Sleet), while other accounts were potentially related to an actor that was assessed by a credible source to be linked to STARDUST CHOLLIMA (AKA APT38, Sapphire Sleet).”

The now-banned accounts were detected using information from an industry partner. In addition to researching what tools to use during cyberattacks, the threat actors used ChatGPT to find information on cryptocurrency-related topics, which are common interests linked to North Korean state-sponsored threat groups.

The malicious actors also used ChatGPT for coding assistance, including help on how to use open-source Remote Administration Tools (RAT), as well as debugging, researching, and development assistance for open-source and publicly available security tools and code that could be used in Remote Desktop Protocol (RDP) brute force attacks.

OpenAI threat analysts also found that the North Korean actors revealed staging URLs for malicious binaries unknown to security vendors at the time while debugging auto-start extensibility point (ASEP) locations and macOS attack techniques.

These staging URLs and the associated compiled executable files were submitted to an online scanning service to facilitate sharing with the broader security community. As a result, some vendors now reliably detect these binaries, protecting potential victims from future attacks.

Other malicious activity uncovered by OpenAI while researching in what ways the North Korean threat actors used the banned accounts includes but is not limited to:

• Asking about vulnerabilities in various applications,
• Developing and troubleshooting a C#-based RDP client to enable,
• Requesting code to bypass security warnings for unauthorized RDP,
• Requested numerous PowerShell scripts for RDP connections, file upload/download, executing code from memory, and obfuscating HTML content,
• Discusses creating and deploying obfuscated payloads for execution,
• Seeking methods to conduct targeted phishing and social engineering against cryptocurrency investors and traders, as well as more generic phishing content,
• Crafting phishing emails and notifications to manipulate users into revealing sensitive information.

The company also banned accounts linked to a potential North Korean IT worker scheme, described as having all the characteristics of efforts to obtain income for the Pyongyang regime by tricking Western companies into hiring North Koreans.

“After appearing to gain employment they used our models to perform job-related tasks like writing code, troubleshooting and messaging with coworkers,” OpenAI explained. “They also used our models to devise cover stories to explain unusual behaviors such as avoiding video calls, accessing corporate systems from unauthorized countries or working irregular hours.”

Since October 2024, when it published its previous report, OpenAI has also detected and disrupted two campaigns originating from China, “Peer Review” and “Sponsored Discontent.” These campaigns used the ChatGPT models to research and develop tools linked to a surveillance operation and generate anti-American, Spanish-language articles.

In the October report, OpenAI revealed that since the beginning of 2024, it disrupted over twenty campaigns linked to cyber operations and covert influence operations associated with Iranian and Chinese state-sponsored hackers.