Authorities in Beijing’s Haidian District have reportedly uncovered a Bitcoin laundering operation involving approximately 140 million yuan (around $20 million) allegedly stolen by employees of Kuaishou, a leading Chinese short-form video platform.

The investigation revealed that several Kuaishou employees conspired with external parties to embezzle company funds for business development incentives. Under the platform’s subsidy policies, these incentives were designed to reward operators and service providers.

However, one employee in a position of authority manipulated the process for personal gain.

How the Bitcoin scam unfolded

According to the report, the employee, identified by local media as Feng, was responsible for approving new participants and formulating incentive policies.

During the rollout of a new bonus program, Feng created policy gaps and leaked internal data to outside collaborators. These partners then submitted falsified applications that appeared to meet eligibility requirements, allowing them to fraudulently claim reward funds.

The conspirators set up shell companies to receive the stolen funds and conceal the theft. They then transferred the money through eight offshore crypto exchanges, converting it into Bitcoin in multiple batches.

The group also used crypto mixing services to obscure the origin and destination of the assets, making the flow harder to trace.

After converting the Bitcoin into Chinese yuan through underground channels, the funds ended up in accounts controlled by Feng and the accomplices.

Despite this significant laundering process, law enforcement agencies were eventually able to track and seize more than 90 BTC tied to the scheme.

The authorities also prosecuted the individuals involved, handing out prison sentences ranging from six months to 14 years for financial misconduct and embezzlement.

This case highlights China’s firm approach toward cryptocurrency-related crimes. Although the country banned crypto trading in 2017 and declared all digital asset transactions illegal in 2021, authorities remain active in policing the space.

Notably, China still holds a significant amount of Bitcoin, over 190,000 BTC, seized during past investigations into illicit crypto activities

The Lumma infostealer malware operation is gradually resuming activities following a massive law enforcement operation in May, which resulted in the seizure of 2,300 domains and parts of its infrastructure.

Although the Lumma malware-as-a-service (MaaS) platform suffered significant disruption from the law enforcement action, as confirmed by early June reports on infostealer activity, it didn’t shut down.

The operators immediately acknowledged the situation on XSS forums, but claimed that their central server had not been seized (although it had been remotely wiped), and restoration efforts were already underway.

Gradually, the MaaS built up again and regained trust within the cybercrime community, and is now facilitating infostealing operations on multiple platforms again.

According to Trend Micro analysts, Lumma has almost returned to pre-takedown activity levels, with the cybersecurity firm’s telemetry indicating a rapid rebuilding of infrastructure.

“Following the law enforcement action against Lumma Stealer and its associated infrastructure, our team has observed clear signs of a resurgence in Lumma’s operations,” reads the Trend Micro report.

“Network telemetry indicates that Lumma’s infrastructure began ramping up again within weeks of the takedown.”

Trend Micro reports that Lumma still uses legitimate cloud infrastructure to mask malicious traffic, but has now shifted from Cloudflare to alternative providers, most notably the Russian-based Selectel, to avoid takedowns.

The researchers have highlighted four distribution channels that Lumma currently uses to achieve new infections, indicating a full-on return to multifaceted targeting.

1. Fake cracks/keygens: Fake software cracks and keygens are promoted via malvertising and manipulated search results. Victims are directed to deceptive websites that fingerprint their system using Traffic Detection Systems (TDS) before serving the Lumma Downloader.
2. ClickFix: Compromised websites display fake CAPTCHA pages that trick users into running PowerShell commands. These commands load Lumma directly into memory, helping it evade file-based detection mechanisms.
3. GitHub: Attackers are actively creating GitHub repositories with AI-generated content advertising fake game cheats. These repos host Lumma payloads, like “TempSpoofer.exe,” either as executables or in ZIP files.
4. YouTube/Facebook: Current Lumma distribution also involves YouTube videos and Facebook posts promoting cracked software. These links lead to external sites hosting Lumma malware, which sometimes abuses trusted services like sites.google.com to appear credible.

The re-emergence of Lumma as a significant threat demonstrates that law enforcement action, devoid of arrests or at least indictments, is ineffective in stopping these determined threat actors.

MaaS operations, such as Lumma, are incredibly profitable, and the leading operators behind them likely view law enforcement action as routine obstacles they merely have to navigate.

African Crypto News under review: ROQQU expands to Kenya as South Africa cracks down on fraud. Ghana will clarify its VASP registration.

Nigerian exchange Roquu has acquired a Kenyan startup with an eye on the East African market. Meanwhile, South African regulators are stepping up efforts to combat fraud in the online crypto sector.

In Ghana, central banks are ultimately set up to issue directives regarding the registration of virtual asset service providers (VASPs). Clarity allows users to gain exposure, just encourage more businesses to set up their shop Next 1000X Cryptos.

Let’s take a quick look at these continent headings below.

Kenya Crypto News: Nigerian Exchange acquires Kenyan startup

Nigerian Crypto Exchange Roqqu has I’ve got it Kenyan startup Flitaa sees growth in the East African market.

Flitaa was launched in 2019 and is open in Kenya, Tanzania, Uganda and Ghana. ROQQU has acquired a startup and become a true Pan Africa platform, increasing the number of people investing in some The best cipher to buy.

https://www.youtube.com/watch?v=-_itcg5msee

The East African market is a fertile ground for Nigerian organizations. Kenya and Uganda are also British countries, supporting regulatory frameworks for outside investors.

Kenya’s move to enact a bill for virtual asset providers will clarify the market for external investors looking to enter.

Roquu has put his early bet on this growth, hoping to become a prominent player in these markets.

Discover: 20+ Next Cryptocurrency to Explode in 2025

South African Crypto News: Regulators crack down on online fraud

South Africa’s financial market regulator, Financial Sector Action Authority (FSCA) announcement Spending R200 million over the next 18 months to combat online scams.

This movement occurs in the general calculations of South Africa and requires modernization of financial sector regulations.

Unfortunately, Crypto is a component of the scam blueprint. South Africa has had several infamous cases, including the disappearance of about 70,000 BTC from a platform called Africapt in 2021.

Warnings for Financial Influencers

The South African Financial Sector Action Authority (FSCA) is facing the rise of unregulated financial influencers, or “Finfluencers,” providing advice on popular social media platforms.

As of April 2025, FSCA is currently under investigation… pic.twitter.com/npcjfqiywu

– Business Axplainer (@buzinessx) April 7, 2025

Investing in online fraud crackdowns can be a positive for the crypto sector, which is suffering from a surge in such entities.

Ghana Crypto News: Central Bank Issues Directive on Registration

A few months after suggesting new regulations, the Central Bank of Ghana has issued An order that all virtual asset service providers will register by August 15th.

Central banks are issuing directives to comply with international trends regarding disclosure and regulation of crypto exchanges.

https://www.youtube.com/watch?v=Br50EOC6O-C

For years, Ghana had little regulation in the crypto sector. However, increased use in local markets and pressure from international entities has led to this update.

Crypto stakeholders aim to follow this deadline to continue operating in this market.

Discover: 16 Next Cryptocurrency Explosions in 2025: Experts’ Cryptocurrency Prediction and Analysis

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Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

About Author

Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated: 

June 26, 2025

The Financial Action Task Force has called on governments worldwide to step up enforcement of anti-money laundering standards in the crypto industry, warning that unchecked gaps in regulation could undermine global financial security.

In a report released Thursday from Paris, the global watchdog said jurisdictions have made progress since 2024 on implementing anti-money laundering and counter-terrorism financing frameworks for virtual assets and related service providers.

However, it noted that critical challenges remain, particularly around licensing, offshore oversight, and identifying entities involved in virtual asset services.

The FATF’s latest targeted update focused on Recommendation 15, which was expanded in 2019 to cover crypto markets.

Watchdog Flags Rising Stablecoin Abuse by Illicit Networks, Urges Regulatory Action

According to the report, 99 jurisdictions have either enacted or are preparing legislation aligned with the “Travel Rule,” a key mechanism to ensure transparency in cross-border crypto transfers. The FATF also released a new guide outlining best practices for supervising compliance with the rule.

The report flags mounting threats associated with the rise of stablecoins. It said their use by illicit actors, including North Korea-linked hackers, terror financiers and drug traffickers, has grown significantly. It warned that mass stablecoin adoption without coordinated regulation could increase global exposure to illicit finance.

North Korea’s Record Crypto Theft Exposes Weak Links in Global Enforcement

The update follows a series of alarming trends. So far this year, North Korea executed what the FATF described as the largest virtual asset theft in history, stealing $1.46b from exchange platform ByBit.

Only about 3.8% of the stolen funds has been recovered. This shows serious gaps in international asset tracing and recovery efforts.

Meanwhile, fraud and scams continue to trouble the crypto sector. The FATF cited industry estimates that around $51b in on-chain transactions last year were linked to such illicit activity. These cases point to increasingly sophisticated tactics by bad actors. As a result, governments are under growing pressure to enhance cooperation and improve asset seizure mechanisms.

In one example, the UK’s Operation Destabilise demonstrated how coordinated law enforcement can disrupt crypto-fueled criminal networks. The FATF said such efforts must be replicated globally and backed by more robust supervision and enforcement.

The watchdog acknowledged support from analytics firms including Chainalysis, Lukka, Merkle Science and TRM Labs in compiling the update. It also stressed that nearly 98% of the global virtual asset market is concentrated in jurisdictions within the FATF’s Global Network. Bringing these players into full compliance, it said, will be key to reducing worldwide risk.

Earlier this month, the Department of Justice disbanded its National Cryptocurrency Enforcement Team and said it would no longer pursue what Deputy Attorney General Todd Blanche described as “regulation by prosecution.”

You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.

The narrative

The U.S. Department of Justice “will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets” in lieu of regulatory agencies putting together their own frameworks for overseeing the sector, a 4-page memo signed by Deputy Attorney General Todd Blanche on April 7 said. In other words, the DOJ will no longer pursue “regulation by prosecution,” the memo said.

Why it matters

The DOJ’s memo raised concerns that it may mean criminal activities in the crypto sector would not be prosecuted, or at least prosecuted as heavily as it was under the past several years — both by disbanding the National Cryptocurrency Enforcement Team (NCET) and by shifting the entity’s priorities.

Breaking it down

At a practical level, the memo itself is internal guidance but may not be a binding document. Multiple attorneys told CoinDesk they interpreted the guidance to indicate that the DOJ would still bring fraud or other criminal cases involving crypto, but would try to avoid any cases where the DOJ itself had to determine if a digital asset was a security or a commodity.

“Fraud is still fraud,” said Josh Naftalis, a partner at Pallas Partners LLP and a former prosecutor with the U.S. Attorney’s office for the Southern District of New York. “This memo does not seem to say the DOJ is not going to prosecute fraud in the crypto space.”

Still, the memo raised alarms for prominent Democrats who questioned whether the DOJ was suggesting it would let criminal conduct occur. Senators Elizabeth Warren, Mazie Hirono, Richard Durbin, Sheldon Whitehouse, Christopher Coons and Richard Blumenthal wrote a letter to Blanche, saying his “decision to give a free pass to cryptocurrency money launderers” and shut down the NCET were “grave mistakes that will support sanctions evasion, drug trafficking, scams and child sexual exploitation.”

“Specifically, the Department will no longer target virtual currency exchanges, mixing and tumbling services and offline wallets for the acts of their end users or unwitting violations of regulations — except to the extent the investigation is consistent with the priorities articulated in the following paragraphs,” the DOJ memo said, a passage the Senators’ letter referenced.

New York Attorney General Letitia James wrote an open letter to Senate leaders in the same week asking them to advance legislation to address cryptocurrency risks. She did not specifically reference Blanche’s memo but detailed possible ways to better police the sector through legislation.

Katherine Reilly, a partner at Pryor Cashman and a former prosecutor with the U.S. Attorney’s Office for the Southern District of New York, told CoinDesk that most of the major crypto cases brought by the DOJ in recent years would not have been affected had this guidance been in effect.

The BitMEX case in 2020, when the DOJ and Commodity Futures Trading Commission brought unregistered trading and other charges against the platform, is “probably closest to the line” of being a case that may not have been brought under this guidance, she said.

Trump pardoned BitMEX, its founders and a senior employee in late March, barely two weeks before the DOJ memo was shared.

“I think that it’s clear that the Justice Department wants to limit the DOJ’s role in regulating the crypto industry … looking beyond its role in other crimes, fraud, laundering proceeds from narcotics trafficking, things like that, and sort of take a step back from the role of trying to bring order and fairness to the crypto industry as a whole,” Reilly said.

That’s “probably the intent behind the BitMEX pardons too,” she said.

Naftalis said the DOJ will continue to pursue drug, terrorism or other illicit financing charges even under the memo.

“I think that the headline for the industry is to the extent that there are legal uses of crypto, they’re not going to set the guard rail by criminal enforcement,” he said. “That’s for Congress.”

One section of the memo tells prosecutors not to charge Bank Secrecy Act violations, unregistered securities offering violations, unregistered broker-dealer violations or other Commodity Exchange Act registration violations “unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully.”

Carla Reyes, an Associate Professor of Law at SMU Dedman School of Law, told CoinDesk that this may be referencing recent cases where developers build tools under the impression that they were not committing unlicensed money transmitting activities under existing guidance but may get charged anyway.

“Most criminal statutes require some level of knowledge to define your intention, and knowledge that you’re committing a crime when you do it,” she said. “The further away you get from that, the lesser the charge, but the more willful [and] intentional it is, the higher the charge.”

What the memo seems to want to explicitly move away from is any suggestion that federal prosecutors would interpret how securities or commodities laws might apply to digital assets.

“Prosecutors should not charge violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, or the regulations promulgated pursuant to these Acts, in cases where (a) the charge would require the Justice Department to litigate whether a digital asset is a ‘security’ or ‘commodity,’ and (b) there is an adequate alternative criminal charge available, such as mail or wire fraud,” the memo said.

A popular critique leveled against former SEC Chair Gary Gensler by the crypto industry was that he was “regulating by enforcement,” rather than focusing on developing guidance for the industry to know what was or wasn’t acceptable. Blanche seems to be referring to a similar critique in the memo, Naftalis said, in that one-off enforcement decisions by the SEC or DOJ should not define the guardrails for the industry.

Steve Segal, a shareholder at Buchalter, said that some of the DOJ’s past cases would charge trading venues for failing to police their own customers. The memo now seems to suggest that if a crypto exchange’s executives were running a clean platform, and customers were laundering funds derived from criminal activities, the executives would not be charged. This is in contrast with, for example, FTX, where the executives were charged and convicted of (or pled guilty to) fraud charges.

“Of course, a lot of the big crypto cases we’ve seen over the last few years are sort of pure investor fraud, things like FTX. And one of the more interesting things about this memo is it talks about crypto investors and really prioritizing cases where crypto investors are being victimized,” Reilly said. “And so I don’t think we should conclude that this memo means we’re going to see a lot fewer cases in the crypto space, or that crypto companies can sort of breathe a sigh of relief that the DOJ is out of the picture for a few years.”

The DOJ’s future cases may appear a bit different in terms of the specific allegations made, but “it’s much too soon to say that everybody can assume the DOJ is out of the crypto business,” she said.

Many of the attorneys speaking to CoinDesk agreed that the memo itself did not clarify all of the different issues that may come up with a criminal case, nor was it an end-all/be-all document.

The memo announced prosecutorial discretion but it isn’t itself a law, Reyes said, adding that it may guide internal decision-making about which cases to pursue the most heavily, as well as the strategies that guide those prosecutions.

A lot of details about how this memo ties together with Trump’s executive order on the strategic bitcoin reserve still need to be spelled out, Segal said. Sections on victim compensation and how seized funds should be handled in the memo do not explain how the DOJ might handle situations where seized funds are turned over to bankruptcy estates, such as what happened with FTX or other similar scenarios.

“I think we’ll really have to see how it plays out, because this guidance, I do think, leaves prosecutors a lot of room to bring cases even of these kinds of violations that are being cast as more regulatory,” Reilly said. “So even if that’s the intent, I think the devil is in the details on what cases we see going forward.”

Monday

• The Securities and Exchange Commission and Binance were set to file a joint status report on their discussions after a judge paused the regulator’s case against the exchange and its affiliated entities and executives in February. Last Friday, the parties asked for an extension of this deadline, and the judge overseeing the case signed off on Monday, giving the parties until mid-June to file a follow-up.

• (The Wall Street Journal) Binance executives met with U.S. Treasury Department officials in March about potentially “loosening U.S. government oversight” of the exchange following Binance’s November 2023 guilty plea, the Journal reported. Binance agreed to a court-appointed monitor as part of the plea. At the same time as last month’s discussions, Binance was in talks with the Trump-backed World Liberty Financial to develop a dollar-pegged stablecoin.
• (Fortune) Fortune spoke to and profiled Bo Hines, the executive director of U.S. President Donald Trump’s digital assets advisory council.
• (CNBC) U.S. importers are seeing more “canceled sailings” due to a drop in demand as a result of tariffs, CNBC reports.
• (The Verge) ICERAID claims to be a protocol on Solana where people can crowdsource images of “criminal illegal alien activity” in exchange for tokens, but it does not appear to have any connection to Immigration and Customs Enforcement (ICE), The Verge reports.
• (NPR) The Department of Homeland Security is revoking parole for a number of migrants, telling them to self-deport from the U.S. U.S. citizens, born within the U.S., are also receiving these emails.
• (The New York Times) Acting IRS Commissioner Gary Shapley has been replaced after just three days on the job, after Treasury Secretary Scott Bessent reportedly complained to President Donald Trump that he was not consulted on Shapley’s promotion, which was pushed by Elon Musk.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social.

You can also join the group conversation on Telegram.

See ya’ll next week!

DOJ says that is the focus of the shift. Instead of chasing Crypto significantly, they aim to narrower people using their digital assets for “serious” crimes, such as drug trafficking, terrorist financing, and hacking.

Destruction: US Department of Justice will disband “immediately effective” crypto enforcement unit to comply with Trump orders

war #bitcoin It’s finished pic.twitter.com/4las937nms

– Bitcoin Historian (@pete_rizzo_) April 8, 2025

Deputy Attorney General Todd Blanche has made it clear that this is not softening, but rather strategic. He criticized past tactics as overly offensive, and said the DOJ wouldn’t continue what he called “restrictions by prosecution.” From now on, if someone gets caught up in a crypto-related case with no clear criminal intent, the department’s attitude is:

DOJ Crypto Enforcement Team Cancellation: Impact on Crypto Platform

The change could be a breath of fresh air for crypto platforms and developers who have been nervously checking their subpoena inboxes for the past few years. Under the new approach, tools like crypto mixers, cold wallets, or debt platforms are not punished just because bad actors used them.

That’s a pretty big change. The government ultimately suggests that it draws a clear line between high-tech infrastructure and criminal intent.

However, it is not without risk. Critics argue that this opens doors for suspicious operators to exploit space, and enforcement is dialed. For now, it is a balanced act of promoting innovation and maintaining basic accountability.

Exploration: XRP Price Jumps 11% after SEC Crypto Unit XRP ETF Progress

Politics behind the DOJ’s move to disband cryptocurrency enforcement teams

Zoom out easily. This is not happening in a vacuum.

The policy changes are in a clean line with President Trump’s broader agenda to loosen regulations around code. And yes, it’s worth noting: Trump’s family has skin to the game. Family cryptographic involvement has attracted the attention of lawmakers through ventures such as the World Liberty Financial and the launch of its own tokens ($Trump and $Melania).

Congressional Democrats have asked the SEC to keep records related to these ventures, suggesting potential conflicts of interest. Whether these concerns are everywhere or not, they encourage already politically charged debates about cryptography surveillance.

Meanwhile, the SEC also relaxes petrol pedals, acting chairman Mark Ueda. They have filed lawsuits against famous exchanges such as Coinbase and Kraken. The message from Washington is clear. The atmosphere of regulations has changed.

How the crypto industry is responding to DOJ closing its cryptocurrency enforcement team

Naturally, the reactions are mixed. Part of the Crypto world is celebrating its shift as a long-term breathing patio for builders and innovators. But others worry that too much generosity can make the space more vulnerable, scam, money laundering, or even worse.

One case stands out in particular. Roman Storm, developer of CryptoMixerTornado Cash. Storm is accused of allegedly making money laundering possible, but under his defense, the new lens of DOJ, he built a tool rather than a crime ring.

The DOJ shift presents a new chapter on how the US handles crypto crime. Whether this leads to a more balanced and effective framework or just confusion remains to be seen. For now, the crypto world knows that the rules of engagement have changed.

Discover: 20+ Next Cryptographs to Explode in 2025

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The cryptocurrency enforcement team was disbanded as the DOJ Alters strategy first appeared in 99 Bitcoins.