2024 Blockchain Security and Anti-Money Laundering Annual Report Anti-Money Laundering Trends and Data

This article focuses on the anti-money laundering situation and data of blockchain. With the rapid development of the cryptocurrency ecosystem, the importance of anti-money laundering supervision and compliance policies has become increasingly prominent. In 2024, countries and regions have introduced a series of key measures in terms of stablecoin supervision, law enforcement actions, anti-money laundering sanctions and global regulatory policies to meet the challenges of the digital asset market. These measures are not only aimed at curbing money laundering and fraud, but also exploring the balance between innovation and risk control. This article will analyze the latest developments in stablecoin supervision, the enforcement dynamics of the U.S. Securities and Exchange Commission (SEC), anti-money laundering sanctions against cryptocurrencies, and regulatory policies around the world to help readers deeply understand the core trends and future directions of the current anti-money laundering situation.

Anti-Money Laundering Situation

Stablecoin Supervision

Stablecoin supervision has become a focus in 2024 as global financial authorities recognize the growing influence and risks of digital assets. The collapse of TerraUSD in 2022 was a stark reminder of the fragility of the market, prompting increasingly strict and clear regulation of stablecoins around the world. This year marks a turning point, with regions responding to the unique challenges posed by stablecoins through legislation and policymaking while promoting innovation in the digital economy.

• China: The People's Bank of China discussed in detail the global cryptocurrency regulatory dynamics in its 2024 China Financial Stability Report [1], with special mention of Hong Kong's cryptocurrency compliance progress, emphasizing the need to strengthen 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 Stablecoin Bill[2], which aims to introduce a regulatory regime for issuers of fiat stablecoins in Hong Kong and improve the regulatory framework for virtual asset activities.

• EU:The EU approved the Markets in Crypto-Assets Act (MiCA)[3], establishing the world's first complete and clear regulatory framework for virtual assets, which is scheduled to be officially implemented by the end of 2024. Its requirements include that stablecoin issuers must obtain an e-money license, maintain sufficient reserves and comply with strict trading regulatory standards. Tether Limited, the issuer of the world’s most widely used stablecoin, USDT, failed to meet these requirements, resulting in USDT being removed from EU-compliant platforms on December 30, 2024.

• Brazil: The Central Bank of Brazil (BCB) plans to regulate stablecoins and asset tokenization in 2025[4]. In November 2024, the BCB proposed a regulation that would ban users from withdrawing stablecoins from centralized exchanges to self-custodial wallets, but in December said it might reverse the ban if key issues such as transaction transparency were improved.

• United States: Stablecoin issuers are now required to maintain 1:1 reserves, a requirement[5] that is supported by ongoing legislative discussions.

• Middle East: The UAE introduced a dedicated stablecoin license under its Virtual Asset Regulatory Authority (VARA)[6], signaling the region’s intention to lead the way in regulatory transparency. Qatar also included stablecoins in its first digital asset framework, marking a progressive step in cryptocurrency regulation.

SEC Enforcement

The U.S. Securities and Exchange Commission (SEC) announced its enforcement results for fiscal year 2024 in November[7]. The report showed that the SEC filed a total of 583 enforcement actions, a 26% decrease from 2023. The enforcement actions resulted in a total of $8.2 billion in fines, the highest amount in history.

Of these cases, the SEC filed 431 “standalone” actions, 14% fewer than in 2023; 93 “follow-up” administrative actions, which seek to enjoin or suspend individuals from certain positions in the securities markets based on criminal convictions, civil injunctions, or other orders, 43% fewer than in 2023; and 59 actions against issuers alleged to have defaulted on filing required documents with the SEC, 51% fewer than in 2023. The $8.2 billion in financial damages included $6.1 billion in disgorgement and prejudgment interest, also the largest amount ever, and $2.1 billion in civil penalties, the second-largest amount ever. Approximately 56% of the $8.2 billion in financial damages was attributable to monetary judgments obtained following the SEC’s victory in Terraform 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 prohibitions in a decade.

In FY 2024, the SEC issued $345 million to harmed investors, returning more than $2.7 billion to investors since the start of FY 2021. The SEC also received 45,130 tips, complaints, and referrals in FY 2024, the most ever, including more than 24,000 tips, more than 14,000 of which were filed by two individuals. The SEC issued whistleblower awards totaling $255 million.

The SEC said that the various enforcement actions taken in 2024 show that it keeps pace with emerging threats such as artificial intelligence misrepresentations and relationship scams using social media, while continuing to focus on evergreen investor risks such as material misrepresentations, insufficient internal controls and significant gatekeeper failures.

Here are examples of enforcement actions taken by the SEC in the crypto ecosystem:

• Terraform Labs Settlement:Terraform Labs agreed to a $4.5 billion settlement with the SEC over the collapse of its TerraUSD and Luna cryptocurrencies. The settlement includes $3.5 billion in disgorgement, $460 million in interest, a $420 million civil penalty and a $200 million personal contribution from former CEO Do Kwon.

• Jump Trading Penalty:Jump Trading Group agreed to pay a $123 million settlement to the SEC for misleading investors about the stability of TerraUSD, a stablecoin that collapsed in 2022. The SEC alleged that Jump subsidiary Tai Mo Shan falsely assured investors of TerraUSD’s stability.

• Cumberland DRW Sued:The SEC sued Cumberland DRW, the cryptocurrency unit of DRW Holdings, for failing to register as a securities dealer. The lawsuit alleges that Cumberland made millions of dollars in profits by trading with hedge funds and large market participants without proper registration.

Anti-Money Laundering Sanctions

• May 2024, Hong Kong Directive to Worldcoin: The Privacy Commissioner for Personal Data in Hong Kong issued an enforcement notice to the Worldcoin Foundation, instructing it to cease all operations in the region due to privacy and personal data issues. Worldcoin was instructed to stop scanning and collecting iris and facial images of the public, which reflects Hong Kong's commitment to protecting personal data in the crypto space.

• May 2024, Two Chinese Citizens Arrested: The U.S. Department of Justice arrested two Chinese citizens, Daren Li and Yicheng Zhang, on charges of orchestrating a large-scale cryptocurrency scam called "Killing Pigs" that resulted in money laundering of at least $73 million.

• In May 2024, the U.S. Treasury Department sanctioned Iran's virtual currency mining activities: The U.S. Treasury Department, through its Office of Foreign Assets Control (OFAC), expanded the scope of sanctions on Iran's virtual currency mining, especially targeting those companies and individuals who circumvented international sanctions through mining.

• In September 2024, more than $6 million in cryptocurrency trust programs were seized: The U.S. Department of Justice announced the seizure of more than $6 million in cryptocurrency held by Southeast Asian criminals. These people targeted U.S. residents through a fraudulent "pig killing" scam. The FBI tracked victim funds on the blockchain and identified multiple cryptocurrency wallet addresses holding illegal funds.

• September 2024, U.S. Sanctions Russian Cybercriminals: The U.S. Treasury Department sanctioned alleged Russian hackers Sergey Ivanov and Cryptex for laundering money for cybercriminals and darknet vendors. The U.S. Treasury Department’s Financial Crimes Enforcement Network also listed Russian cryptocurrency exchange PM2BTC as a significant money laundering threat.

• December 2024, U.S. Sanctions North Korean Virtual Currency Money Laundering Network: The United States imposed sanctions on two individuals and one entity pursuant to Executive Order 13382, which is intended to prevent the Democratic People’s Republic of Korea from laundering virtual currency to fund its illegal weapons of mass destruction and ballistic missile programs.

• In December 2024, the United States charged LockBit ransomware developers: The United States charged Russian and Israeli dual national Rostislav Panev with developing and maintaining the LockBit ransomware code and earning more than $230,000 in cryptocurrency for his work. Panev was arrested in Israel and awaits extradition to the United States.

Regulatory policy

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 trends in detail and highlighted Hong Kong’s progress in cryptocurrency compliance. In view of the possible spillover risks that crypto assets may have on the stability of the financial system, regulatory authorities in various countries have continuously increased their supervision of crypto assets. The report pointed out that 51 countries and regions around the world have issued prohibition regulations on crypto assets, and some economies have adjusted their original laws or re-legislated regulations. In addition, Hong Kong has actively explored the management of crypto asset licenses, 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 exchange-traded funds (ETFs) for Bitcoin and Ethereum, providing investors with new investment channels; the Securities and Futures Commission (SFC) of Hong Kong added 4 new license holders of virtual asset exchanges and strengthened the supervision of trading platforms; Hong Kong launched a stablecoin sandbox and related bills to establish a clear regulatory framework for the issuance and use of stablecoins.  

• Japan:Advanced crypto tax reforms[9]Reducing transaction profit tax to 20% and emphasizing strengthening anti-money laundering and KYC compliance for exchanges and issuers.

• South Korea:Enacted the Virtual Asset User Protection Act[10] to strengthen investor security and regulate cross-border crypto transactions.

• Vietnam:The Vietnamese government released the National Blockchain Development Strategy[11], positioning itself as a regional leader by 2030. However, virtual currencies remain unclassified and banned as legal tender, prompting efforts to strike a balance between innovation and crime prevention.

• Singapore:The Monetary Authority of Singapore (MAS) has amended the Payment Services Act[12] to expand the scope of regulated payment activities to include digital payment token services, requiring relevant service providers to apply for corresponding licenses. MAS has approved major payment institution licenses for at least 19 crypto service providers, allowing them to provide digital payment token services.

• Malaysia:The Securities Commission of Malaysia has published a list of six approved cryptocurrency exchanges[13], requiring unapproved entities to immediately cease activities and return investor funds.

2. North America

• United States: The approval of Bitcoin and Ethereum ETFs marks a milestone in the mainstream adoption of cryptocurrencies. The SEC approved the spot Bitcoin ETF on January 10, 2024[14] and the Ethereum ETF on May 23[15], and the Ethereum spot ETF officially started trading on July 23. As of 2024, the net asset value of the US Bitcoin spot ETF is US$105.08 billion (5.7% of Bitcoin's market value), while the net asset value of the Ethereum spot ETF totals US$12.05 billion (2.94% of Ethereum's market value). On the legislative front, the Financial Innovation and Technology Act of the 21st Century (FIT21)[16] clarified the classification of cryptocurrencies and the rejection of SAB 121 retained current crypto custody accounting standards. The Trump administration’s innovation-friendly policies include the appointment of cryptocurrency advocates such as Paul Atkins as SEC Chairman, demonstrating strong support for the industry.

• Canada:Canada continues to refine its cryptocurrency regulatory framework[17], emphasizing the regulation of cryptocurrency exchanges and service providers to ensure their compliance with anti-money laundering (AML) and know your customer (KYC) regulations. The Canadian Securities Administrators (CSA) has strengthened its regulation of crypto asset investment products, requiring greater transparency and investor protection measures.

3. Europe

• Russia: In 2024, Russia accelerated cryptocurrency regulation to mitigate the impact of Western sanctions, with a focus on using digital assets for international trade[18]. President Vladimir Putin legalized cryptocurrency mining and allowed the use of mined assets for cross-border transactions, allowing Russia to bypass the traditional financial system. 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 promote foreign trade.

• EU: The Markets in Crypto-Assets (MiCA) Act[19] will come into full effect across the EU on December 30, 2024, marking Europe as the first region in the world to implement a unified cryptocurrency regulatory framework. It sets strict requirements for stablecoin issuers, including reserve backing and strict operating standards, while strengthening consumer protection.

• UK: The UK Financial Conduct Authority (FCA) will develop[20] a comprehensive crypto regulatory regime in 2026 based on the EU MiCA framework.

4. Middle East and Africa

• United Arab Emirates:The UAE has consolidated its global leadership in cryptocurrency regulation through its Virtual Asset Regulatory Authority (VARA)[21] and issued 13 new licenses by 2024. It has also launched a license for stablecoins to adapt to changing market needs.

• Saudi Arabia:It has become 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 regulatory framework for digital assets, marking a major 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 enable the free circulation of currencies including Bitcoin.

• Brazil: advanced the pilot phase of its CBDC (DREX)[25], focusing on the development of real world assets (RWA) to enhance financial inclusion.

• El Salvador: Expanded[26] its Bitcoin fiat currency policy and worked with Argentina to develop cross-border crypto solutions.

Anti-Money Laundering Data

Fund Freezing Data

1. SlowMist Assisted Freezing

With the strong support of InMist Intelligence Network partners, in 2024, SlowMist assisted customers, partners and public hacking incidents in freezing funds totaling more than $112 million.

2. USDT and USDC frozen 

(https://dune.com/misttrack/2024)

In 2024, Tether froze approximately US$540 million in USDT; in 2024, Circle froze approximately US$13.36 million in USDC.

Funds Return Data

In 2024, 410 security incidents occurred, and there were 24 incidents in which the lost funds were fully or partially recovered after the attack. According to the disclosed data, a total of approximately US$166 million was returned, accounting for 8.25% of the total security losses (approximately US$2.013 billion).

Summary

As the cryptocurrency field continues to develop, countries and regions have shown their determination to strengthen compliance management in terms of stablecoin supervision, law enforcement actions and anti-money laundering sanctions, while also continuously promoting policy innovation to adapt to the needs of the digital economy. Although there are differences in policy details and implementation methods, the common goal is to improve market transparency and protect the interests of investors through a more complete regulatory framework.

The advancement of global regulatory policies shows a dual focus on innovation and risk control. Whether it is the compliance management of stablecoins or the continuous upgrading of anti-money laundering measures, they will lay a more solid foundation for the development of the digital economy. In the future, the healthy development of the crypto industry will rely on the close cooperation between regulators and market participants to promote technological progress while ensuring the transparency and security of the financial system. In this process, global collaboration and information sharing will become the key to dealing with cross-border risks and help build a more robust and fair digital financial ecosystem.

The link to the full report is as follows, or you can click to read the original text directly. Welcome to read and share :)

Chinese: https://www.slowmist.com/report/2024-Blockchain-Security-and-AML-Annual-Report(CN).pdf

English: https://www.slowmist.com/report/2024-Blockchain-Security-and-AML-Annual-Report(EN).pdf

References

[1] http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5547040/2024122719254984750.pdf

[2] https://www.info.gov.hk/gia/general/202412/06/P2024120500422.htm

[3] https://www.esma.europa.eu/press-news/esma-news/esma-releases-last-policy-documents-get-ready-mica

[4] https://www.reuters.com/technology/brazil-regulate-stablecoins-2025-says-central-bank-chief-2024-10-15/

[5] https://www.americanbar.org/groups/business_law/resources/business-law-today/2024-september/state-stablecoin-regulation-emergence-global-principles/

[6] https://thefintechtimes.com/stabilising-the-crypto-frontier-uaes-groundbreaking-stablecoin-regulations/

[7] https://www.sec.gov/newsroom/press-releases/2024-186

[8] https://www.reuters.com/markets/currencies/hong-kong-gives-initial-approval-first-bitcoin-ether-spot-etfs-say-funds-2024-04-15/

[9] https://dig.watch/updates/japan-moves-forward-with-tax-and-stimulus-reforms

[10] https://reports.tiger-research.com/p/one-month-after-the-korean-new-crypto-law-eng

[11] https://www.usasean.org/article/vietnam-launches-national-blockchain-strategy-lead-regional-innovation-2030

[12] https://www.mas.gov.sg/news/media-releases/2024/mas-expands-scope-of-regulated-payment-services

[13] https://www.sc.com.my/regulation/guidelines/recognizedmarkets/list-of-registered-digital-asset-exchanges

[14] https://www.sec.gov/newsroom/speeches-statements/gensler-statement-spot-bitcoin-011023

[15] https://www.investopedia.com/sec-approves-spot-ether-etfs-8678873

[16] https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409277

[17] https://finestel.com/blog/crypto-regulations-in-canada

[18] https://www.reuters.com/markets/currencies/russia-is-using-bitcoin-foreign-trade-finance-minister-says-2024-12-25

[19] https://finbold.com/eus-mica-regulation-takes-full-effect-today-heres-what-you-need-to-know

[20] https://beincrypto.com/fca-crypto-regulation-uk-2026-roadmap

[21] https://www.bitget.com/news/detail/12560604457143

[22] https://www.sama.gov.sa/en-us/news/pages/news-812.aspx

[23] https://www.qfc.qa/en/media-centre/news/list/qatar-financial-centre-issues-qfc-digital-assets-framework-2024

[24] https://www.dlapiper.com/en-us/insights/publications/blockchain-and-digital-assets-news-and-trends/2024/argentina-begins-establishing-a-comprehensive-framework-for-crypto-assets

[25] https://www.ledgerinsights.com/santander-visa-mastercard-selected-for-brazils-drex-cbdc-pilot/

[26] https://www.mitrade.com/insights/news/live-news/article-3-520264-2024121