Cryptocurrencies Archives | Digital Watch Observatory

Russian draft laws introduce licensing and limits on digital assets

The Russian government has approved a package of draft laws aimed at regulating digital currencies and digital rights, forming part of a broader effort to formalise and ‘de-shadow’ sections of the economy.

The legislation establishes a structured framework for crypto operations, including rules on trading, intermediaries, and market access.

Under the proposed system, transactions with digital currencies must be conducted through regulated intermediaries, while residents are permitted to buy crypto abroad and transfer funds under defined conditions.

Authorities also require taxpayers to report foreign crypto-related operations to the Federal Tax Service.

Access to digital assets will vary by investor type, with non-qualified investors limited to lower-risk assets and annual caps of up to 300,000 roubles per intermediary, subject to testing requirements. Qualified investors will face no such limits.

The framework also introduces licensing requirements for exchanges, custodians, and other market participants.

The reforms further expand the regulation of digital financial assets and rights, allowing issuance and circulation in public blockchain networks. Administrative penalties will apply for violations, reinforcing compliance standards across the emerging digital asset sector.

The move signals a broader effort to bring Russia’s large and highly active digital asset market into a formal regulatory perimeter, potentially increasing state oversight, investor protection, and fiscal transparency in a strategically important sector.

At the same time, it reflects the ongoing challenge of balancing effective market regulation with the risk of overregulation that could limit innovation, reduce market participation, or push activity into less regulated channels.

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New quantum threat could weaken cryptocurrency encryption systems

A new warning from Google says advances in quantum computing could weaken widely used cryptographic systems protecting cryptocurrencies and digital infrastructure. A new whitepaper suggests future quantum machines may need fewer resources than previously estimated to break elliptic curve cryptography.

The research focuses on the elliptic curve discrete logarithm problem, which underpins much of today’s blockchain security. Findings suggest quantum algorithms like Shor’s could run with fewer qubits and gates, increasing concerns about cryptographic resilience.

To address the risk, the paper recommends a transition to post-quantum cryptography, which is designed to resist quantum attacks. It also outlines short-term blockchain measures, including avoiding reuse of vulnerable wallet addresses and preparing digital asset migration strategies.

Google also introduced a responsible disclosure approach using zero-knowledge proofs to communicate vulnerabilities without exposing exploitable details.

The company says this balances transparency and security, supporting coordinated efforts across crypto and research communities to prepare for quantum threats.

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Cryptocurrency political donations banned under new Canada bill

Canada’s Liberal government has introduced Bill C-25 to prohibit cryptocurrency and other non-cash instruments from being used as political donations. The measure covers all registered parties, candidates, leadership, and nomination contests, and third-party advertisers, tightening campaign finance rules.

The proposal reverses a 2019 framework that had allowed limited crypto contributions under strict conditions, though uptake remained minimal and no major party reported receiving such donations in recent federal elections.

Authorities argue that pseudo-anonymous blockchain transactions make it difficult to verify the true source of funds, raising concerns about traceability and foreign interference risks.

Under the new rules, any prohibited donation must be returned, destroyed, or converted and forwarded to the Receiver General within 30 days. Enforcement includes fines of up to twice the illegal contribution’s value, reaching CA$25,000 for individuals and CA$100,000 for corporations.

Bill C-25 also revives provisions from the earlier Bill C-65, which collapsed in 2025 after Parliament was prorogued. The updated law aligns with UK restrictions and expands election oversight powers, including measures against deepfakes and foreign interference.

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UK tightens sanctions on crypto-linked scam networks

The UK has stepped up its crackdown by sanctioning a crypto marketplace tied to major scam centres in Southeast Asia. Measures aim to disrupt the sale of stolen personal data and limit the financial infrastructure enabling online fraud targeting British victims.

Authorities also targeted operators behind ‘#8 Park’, Cambodia’s largest scam compound, believed to house up to 20,000 trafficked workers. Many individuals forced to run scams were lured with false job offers before being coerced into fraudulent activity under severe threats.

Sanctions extend to key entities and individuals connected to the wider network, including those facilitating crypto laundering and cross-border financial flows. Earlier UK action froze over £1 billion in assets and helped shut down platforms used for laundering illicit funds.

Officials said the measures will isolate these operations from the crypto ecosystem and freeze UK-based assets. The measures come ahead of an international summit in June aimed at strengthening global coordination against illicit finance and digital fraud.

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CFTC launches AI and crypto innovation task force

The Commodity Futures Trading Commission (CFTC), an independent agency of the United States federal government, announced the creation of an Innovation Task Force to support the development of new technologies in US derivatives markets. Chairman Michael S. Selig leads the initiative and focuses on establishing clear regulatory approaches.

The task force will work with the Innovation Advisory Committee to develop frameworks covering crypto assets, blockchain technologies, AI and autonomous systems, and prediction markets. Authorities said the aim is to provide clarity for innovators building new financial products.

According to Selig, clearer rules are intended to support responsible innovation and ensure market participants remain competitive. The task force is also expected to help implement the Commission’s broader innovation agenda.

Coordination with other federal bodies is planned, including collaboration with the US Securities and Exchange Commission and its Crypto Task Force. Michael J. Passalacqua, senior advisor to the Chairman, has been appointed to lead the initiative.

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New UK rules target foreign influence and crypto donations

The UK government has announced sweeping reforms to political donations, introducing a £100,000 annual cap on contributions from overseas electors. The move targets concerns that individuals living abroad could exert disproportionate financial influence on domestic politics.

Cryptocurrency donations have also been banned with immediate effect, reflecting fears over anonymity and the difficulty of tracing funds. Authorities warn that digital assets risk enabling untraceable political funding until stronger regulation is in place.

Both measures will apply retrospectively, requiring political parties and candidates to return any unlawful donations within 30 days once the legislation takes effect. Enforcement action may follow for non-compliance, signalling a stricter approach to financial oversight.

Reforms stem from the Rycroft Review, which highlighted vulnerabilities in the UK’s electoral system linked to foreign interference. Further changes, including stronger Electoral Commission powers and tighter donor checks, are expected.

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Binance Ai Pro brings advanced AI to trading

Binance has launched the Beta version of Binance Ai Pro, an advanced AI trading assistant built on the OpenClaw ecosystem. Available from 25 March 2026 at 07:00 UTC, the service can be activated via the Binance App on Android or through the Binance web homepage, with iOS support coming soon.

The platform offers one-click activation, automatic cloud setup, and integration with multiple AI models, including ChatGPT, Claude, Qwen, MiniMax, and Kimi. Users receive a dedicated Binance Ai Pro Account, isolated from their main account to minimise operational risks.

Funds can be manually transferred to the AI account for trading, asset monitoring, and strategy execution, covering spot and perpetual contracts, leveraged borrowing, market analysis, token distribution queries, and custom strategies.

Beta users will pay $9.99 per month, with a 7-day free trial. Activation grants 5 million usage credits each month for accessing advanced AI models, with automatic fallback to basic models once credits are exhausted.

Security measures ensure that AI API keys have no withdrawal permissions and operate within strict, authorised scopes.

Binance plans to expand the platform with additional credits, enriched Binance Skills, and user-customisable third-party AI tools. The company warns that AI trading carries risks and urges users to trade responsibly while giving feedback to enhance the platform.

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EU Market Integration Package prompts feedback from Circle

Circle has submitted feedback to the European Commission on its proposed Market Integration Package, aiming to strengthen capital markets integration and supervision across the EU.

The response praises digital finance reforms while recommending refinements to support institutional adoption and liquidity growth. Key recommendations include reforming the DLT Pilot Regime with adaptive thresholds, a clear path to permanent legislation, and accelerated updates.

Circle also calls for broader use of MiCA-compliant e-money tokens (EMTs) in securities settlement, ensuring alignment with the CSD Regulation and considering non-EU-issued stablecoins for cross-border interoperability.

The company urges careful calibration of centralised supervision under the European Securities and Markets Authority, focusing on systemic crypto firms and reducing administrative complexity for smaller providers.

Legal certainty regarding the use of EMTs as collateral is also highlighted, enabling the EU markets to remain competitive globally.

Circle emphasises the potential of clear and proportionate regulation to bridge traditional finance with on-chain infrastructure. The company positions regulated stablecoins like USDC and EURC as key tools for modernising Europe’s capital markets and unlocking new efficiency and liquidity.

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Licence revocations hit unregistered crypto firms in Canada

Canada has increased crypto oversight, revoking registrations for nearly three dozen firms due to compliance failures. The move follows investigative reporting that uncovered widespread irregularities in the sector.

The Financial Transactions and Reports Analysis Centre of Canada removed 23 companies in one week, adding to previous actions against about a dozen other crypto firms.

Officials described the shift as part of a broader effort to address risks tied to virtual currencies, including fraud and money laundering.

Findings from the International Consortium of Investigative Journalists’ investigation highlighted clusters of crypto businesses operating without proper registration, particularly in Toronto.

Many of these services reportedly focused on converting digital assets into cash, raising concerns about gaps in oversight and compliance with anti-money laundering rules.

Authorities also flagged suspicious transaction patterns, including activity linked to wallets allegedly associated with Iran-backed groups. While regulators have promised further action, analysts warn that delayed enforcement and structural weaknesses may continue to expose the system to illicit financial flows.

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Tokenised assets set to transform European capital markets

Piero Cipollone, Member of the Executive Board of the ECB, at an event on ‘Building Europe’s integrated digital asset ecosystem: from vision to implementation,’ highlighted Europe’s progress in tokenised financial markets.

Since 2021, European issuers have placed nearly €4 billion in DLT-based fixed-income instruments, including the first digital sovereign debt by EU Member States. Eurosystem trials in 2024 processed €1.6 billion in transactions, showing strong demand for central bank money settlement in digital markets.

Tokenisation enables the full lifecycle of transactions on distributed ledgers, often automated through smart contracts.

Fragmentation across DLT platforms and the absence of a widely accepted on-chain settlement asset are holding back market expansion. Private assets, including stablecoins, carry volatility and credit risks, making a central bank money anchor crucial.

The Pontes platform, launching in Q3 2026, is expected to provide secure settlement across DLT platforms and TARGET services, supporting features like smart contracts and 24/7 operation.

The Appia roadmap outlines a longer-term vision for an integrated European tokenised ecosystem by 2028, covering technical standards, interoperability, collateral management, and cross-border connectivity.

Collaboration between the public and private sectors is critical. Feedback from 64 industry participants shaped Pontes, while Appia engages stakeholders to establish standards and ensure interoperability.

Harmonised legal frameworks are equally important to reduce post-trade fragmentation and support seamless asset transfers across EU Member States. Without coordinated laws, tokenised markets risk inefficiency despite advanced technology.

Europe is building momentum but faces intense global competition. Secure settlement, stakeholder collaboration, and legal harmonisation could make the EU a leader in digital finance with a single tokenised market.

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