Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.
DOJ’s Blanche Says Scrutiny Is on Crypto Crimes, Not Coders
On April 27, Acting U.S. Attorney General Todd Blanche, speaking at the Bitcoin 2026 conference in Las Vegas, reiterated his commitment to his April 2025 memorandum titled “Ending Regulation by Prosecution,” which directed Department of Justice (DOJ) staff to focus resources on bad actors rather than the creators of the crypto tools they use. Blanche told attendees that lawyers representing crypto software developers “should feel very comfortable communicating” with his office to ensure prosecutors comply with the memo. The April 2025 memo announced the disbandment of the National Cryptocurrency Enforcement Team; committed the DOJ to no longer pursuing regulatory violation cases against crypto exchanges, mixing services, and wallets for the actions of end users; and instructed prosecutors not to pursue charges for regulatory violations under federal banking, securities, or commodities laws absent evidence of willful intent. The April 2025 memo is available here.
SDNY Tosses Securities Fraud Claims Against Coinbase
On April 22, U.S. District Judge Jed S. Rakoff of the Southern District of New York (SDNY) dismissed securities fraud claims brought against cryptocurrency exchange Coinbase Global Inc. by investors in wLUNA, a Coinbase-listed digital asset that tracked the native token of the now-failed Terraform blockchain ecosystem. The ruling is significant because Judge Rakoff has previously taken a relatively expansive view of when digital-asset transactions qualify as securities. In July 2023, denying Terraform Labs’ motion to dismiss the Securities and Exchange Commission’s (SEC) complaint, he rejected the distinction drawn by a fellow SDNY judge in SEC v. Ripple Labs between “programmatic” sales on secondary-market trading platforms and direct sales to institutional investors for purposes of the Howey test, holding instead that the manner of sale does not control whether a digital asset is offered and sold as a security. In December 2023, on summary judgment, he applied that reasoning to find that Terraform’s UST, LUNA, wLUNA, and MIR tokens were unregistered securities. Against that backdrop, Judge Rakoff’s willingness to throw out private secondary-market securities claims against a listing exchange signals meaningful pleading and causation limits on investor suits targeting exchanges for losses tied to third-party tokens, even before a judge who has generally been receptive to the SEC’s position on digital-asset securities. The Order is available here.
NY AG James Secures Over $5M From Uphold for Promoting Fraudulent CredEarn Scheme
On April 29, New York Attorney General (NY AG) Letitia James announced a settlement of more than $5 million with cryptocurrency platform Uphold HQ Inc. for misleadingly promoting Cred LLC’s investment product to Uphold’s customers. An investigation by the office of the attorney general (OAG) found that from January 2019 through October 2020, Uphold advertised CredEarn as a safe, reliable savings product, when in reality, Cred was generating interest through risky microloans to video game players in China with low monthly incomes and no credit histories. The OAG also found that Uphold represented that Cred was covered by “comprehensive insurance” when no insurance protecting retail investors from digital-asset investment losses existed in the industry, and that Uphold illegally promoted CredEarn without registering as a broker or commodity broker-dealer. When Cred declared bankruptcy in November 2020, thousands of Uphold customers lost millions of dollars. Under the Assurance of Discontinuance, Uphold will pay $5 million to harmed investors, amounting to more than five times the fees it collected; improve its third-party due diligence policies; and register as a broker with the OAG. The press release is available here.
French National Sentenced to Eight Years for Laundering Hundreds of Millions Through Shell Companies and Crypto Accounts
On April 28, the U.S. Attorney’s Office for the SDNY announced that Maximilien de Hoop Cartier, a French national who purports to be a direct descendant of the Cartier jewelry family, was sentenced to eight years in prison for operating an unlicensed cryptocurrency exchange that laundered more than $470 million in illicit proceeds, including drug trafficking proceeds, through the United States. Cartier was sentenced after pleading guilty on Oct. 23, 2025, to one count of operating an unlicensed money transmitting business and one count of conspiracy to commit bank fraud. U.S. Attorney Jay Clayton stated that Cartier “exploited his knowledge of U.S. and international financial systems to launder drug money and other crime proceeds” by “creat[ing] a network of shell companies and crypto accounts to wash and conceal criminal proceeds.” Prosecutors said Cartier opened multiple U.S. bank accounts, described his businesses as software firms, and used fake contracts and invoices to disguise the source of funds before routing proceeds to Colombia. The SDNY press release is available here.
California Money Launderer Sentenced in DC to 70 Months for Role in $263 Million Crypto Theft Scheme
On April 24, Evan Tangeman of Newport Beach, California, was sentenced by U.S. District Judge Colleen Kollar-Kotelly to 70 months in prison for his role in a RICO conspiracy to steal more than $263 million in cryptocurrency through an elaborate social engineering scheme. Tangeman pleaded guilty on December 8, 2025, and admitted that he helped launder at least $3.5 million for members of a multistate criminal enterprise that grew out of friendships developed on online gaming platforms. According to prosecutors, the enterprise—active from at least October 2023 through May 2025—included database hackers, organizers, target identifiers, callers, and residential burglars who targeted hardware virtual currency wallets, and used proceeds to purchase exotic automobiles, luxury watches valued up to $500,000, nightclub services costing up to $500,000 per evening, and rental mansions. U.S. Attorney Jeanine Ferris Pirro stated that after co-defendants Malone Lam and Jeandiel Serrano were arrested, Tangeman directed co-defendant Tucker Desmond to destroy digital devices belonging to enterprise members, which the court treated as “consciousness of guilt.” The press release is available here.
Scam Center Strike Force Takes Major Actions Against Southeast Asian Scam Center
On April 23, the DOJ, the Treasury’s Office of Foreign Assets Control, and the Department of State announced sweeping coordinated actions against transnational criminal organizations operating cryptocurrency “pig butchering” scam centers in Southeast Asia. The DOJ’s Scam Center Strike Force unsealed criminal complaints charging two Chinese nationals with wire fraud conspiracy for managing the Shunda compound in Min Let Pan, Burma, where trafficked workers were allegedly forced to defraud Americans using fake cryptocurrency investment platforms. Authorities also seized a Telegram channel with more than 6,000 followers used to recruit English-speaking trafficking victims, seized 503 fraudulent cryptocurrency investment web domains, and restrained more than $701.9 million in cryptocurrency tied to victim-funds laundering. The DOJ press release is available here, and the Treasury press release is available here.
New Hampshire House Advances Senate Bill 482 to Curb Crypto Kiosk Scams
On April 24, the New Hampshire House voted 214-140 to pass Senate Bill 482, which establishes consumer protections for “digital access transaction kiosks” to combat a surge in scams targeting older residents. The bill (i) imposes daily aggregate transaction limits of $5,000 for first-time customers and $15,000 for existing customers across kiosks under common control, (ii) requires on-screen fraud-screening prompts and warnings that no government agency or bank will demand payment by crypto ATM, (iii) mandates use of commercially reasonable blockchain analytics to block transfers to wallet addresses flagged for illicit activity, and (iv) requires conspicuous disclosure of all fees, the spread versus a reference price, and the quantity of digital assets to be delivered. The bill text is available here.
Canada Proposes Nationwide Ban on Crypto ATMs Amid Rising Fraud
On April 28, Canada’s Liberal government proposed a nationwide ban on cryptocurrency ATMs as part of its Spring Economic Update 2026, citing growing evidence that the machines have become a “primary method” for scammers to defraud victims and for criminals to place cash proceeds of crime. The update states that Canadians lost more than $704 million to fraud in the prior year, with total reported losses since 2022 exceeding $2.4 billion, and notes that only an estimated 5 percent to 10 percent of consumer-targeted fraud incidents are reported. Canada currently hosts nearly 4,000 crypto ATMs, the second-highest per-capita concentration in the world, though the sector has operated without industry-specific regulation and has been treated simply as a “money services business.” The proposal is available here.
Japan Warns Unregistered Crypto Use in Property Deals May Breach Law
On April 28, Japan’s Financial Services Agency; Ministry of Land, Infrastructure, Transport and Tourism; National Police Agency; and Ministry of Finance issued joint guidance warning that crypto payments in real estate transactions pose high anti-money laundering (AML) risk and that real estate agents and crypto firms must tighten AML checks on property transactions. The guidance targets the use of digital assets in the luxury property market and warns that unregistered crypto use in property deals may breach Japanese law. The guidance is available here.
HKMA Warns Public of Fraudulent Tokens Purported to Be Associated With Licensed Stablecoin Issuers
On April 28, the Hong Kong Monetary Authority (HKMA) issued an alert warning members of the public about tokens with the tickers “HKDAP” and “HSBC” that have been launched in the market but are not issued by, or otherwise associated with, licensed stablecoin issuers in Hong Kong. The HKMA’s notice highlights press releases issued separately by Anchorpoint Financial Ltd. and the Hongkong and Shanghai Banking Corp. Ltd., both of which confirmed that as of the date of the alert, neither licensee had issued any regulated stablecoins in the market. The HKMA alert is available here.
Israel’s Regulatory Authority Approves Shekel-Pegged Stablecoin After Solana Pilot
On April 28, Israel’s Capital Market, Insurance and Savings Authority approved the launch of a shekel-pegged stablecoin, BILS, issued by the licensed virtual exchange Bits of Gold, following an approximately two-year regulatory pilot on the Solana blockchain. The token is pegged 1:1 to the Israeli shekel, with reserve assets held in designated and segregated accounts in Israel. Bits of Gold founder and CEO Youval Rouach stated that “BILS creates a direct bridge between the Israeli shekel and the global digital assets economy, enabling real-time payments, on-chain trading, and programmable financial applications based on a regulated local currency.” The announcement is available here.
