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The Joint Chiefs of Global Tax Enforcement (J5) published two advisories on February 12, 2026 identifying over-the-counter crypto desks and crypto payment processors as channels for laundering and tax evasion. The J5 membership includes the Australian Taxation Office, Canada Revenue Agency, Dutch FIOD, HM Revenue and Customs, and IRS Criminal Investigation. The advisories reported average daily OTC turnover at about $1.44 billion versus about $74.5 million on exchanges, nearly $236 billion in suspicious activity linked to OTC platforms reported to FinCEN, and a roughly 1,000% increase in suspicious activity reports tied to crypto payment processors between 2020 and 2024 reaching around $5 billion. The advisories described mechanisms used to obscure flows, including private settlement windows, custodial addresses, cross-venue flows, routing or conversion by processors that bypass exchange-level KYC and monitoring, and attribution gaps created by unlabeled house wallets, third-party fiat receivers, and nested merchant accounts. The advisories listed red flags for OTC desks such as large block trades settled outside exchange order books, repeated bespoke settlement terms, cross-chain hops or partial cash components, advertising guaranteed quotes or low documentation, failures to file suspicious activity reports, and poor wallet labeling; and red flags for processors such as merchant mismatches between declared business category and transaction patterns, nested accounts funneling flows across settlement rails, rapid splitting and reaggregation of payments, and weak onboarding or sanctions screening tied to IP and device gaps. The J5 cited prior operations including the September 2024 Cyber Challenge that combined chain analytics, SAR data, and investigative mapping to link wallets to fiat endpoints, dealers and shell entities. The advisories recommend adopting common SAR keyword libraries that include named OTC venues and processor typologies, tagging counterparties and house wallets consistently, training investigators to identify described signal patterns, mapping exposure to OTC counterparties and documenting verified identities and sources of funds for large or repeat trades, updating SAR programs with recommended typologies and keyword lists, increasing merchant-level monitoring by tracking velocity, clustering, and merchant-category inconsistencies, and strengthening Travel Rule compliance and analytics labeling by incorporating IP, device, and geolocation context. Agencies signaled oversight expectations that could include registration and licensing for OTC intermediaries, fit-and-proper checks, and enhanced record keeping; processors could face stronger KYC, merchant category monitoring, sanctions screening informed by IP and device data, and stricter Travel Rule enforcement; banks and acquirers may de-risk relationships with insufficient labeling and reporting, and service providers may face exam findings, account terminations, and cross-border referrals. The advisories indicate potential market effects including migration of liquidity from OTC venues toward regulated platforms, wider spreads and increased slippage on large block trades, loss of acquirers for processors that cannot demonstrate merchant controls, continued access to fiat rails for institutions that invest in provenance analytics and accurate labeling, and increased enforcement and termination risk for lagging service providers. The J5 advised that agencies will pursue joint operations, intelligence sharing, and referrals tying on-chain patterns to off-chain fiat endpoints, card programs, and dealers, and urged industry leaders to prioritize controls that make transactions auditable and documented. Source: https://web3businessnews.com/policy/j5-warns-otc-crypto-processors/

On February 16, 2026, X announced Smart Cashtags that make $TICKER tags interactive by surfacing real-time quotes, sparklines, and reference information in the timeline and by opening a compact trading panel that routes users to integrated partner brokerages and crypto exchanges for execution. X will provide market data, routing links, and the UX surface while partner brokerages and exchanges remain responsible for execution, KYC, custody, and settlement. X targets a phased rollout of Smart Cashtags in the coming weeks with initial coverage focused on Bitcoin and Ether, plans to expand to liquid equities and other crypto pairs as partner support and liquidity allow, and will initially support spot trading only. X is testing X Money in internal beta with peer-to-peer transfers, in-app wallets, and Visa-enabled instant settlement mechanics, and it targets an external beta in one to two months subject to partner readiness and compliance approvals. X holds money transmitter licenses in seven U.S. states from 2023 and intends broader regional availability to depend on additional licenses and local partnerships. Regulators, compliance, fraud, user protection, data latency, and outages are identified as risk areas that require controls such as disclosures, default limits, funding checks, fraud prevention, and routing audits. X advised exchange, brokerage, and payments partners to prepare APIs and onboarding flows for rapid account openings and identity checks, optimize mobile funding paths, harden anti-abuse controls for feed-driven flows, and design visible safeguards for new traders. Early operational metrics to monitor include weekly active cashtag traders, conversion rates from views to orders, time to first trade after a cashtag interaction, funding success rates, latency and routing reliability, and retention of wallet balances. X and partners will publish public milestones such as partner lists, regional availability, asset coverage, uptime, error rates, and compliance updates; teams are advised to validate exchange readiness, align on API contracts and error handling, and track Visa settlement behavior and interchange economics while expecting phased rollouts and a limited initial asset set. Source: https://web3businessnews.com/crypto/x-smart-cashtags-money-launch/

Harvard Management Company reduced its iShares Bitcoin Trust (IBIT) position by about 1.48–1.50 million shares, a roughly 21% decline, in Q4 2025 and initiated a position in the iShares Ethereum Trust (ETHA). At quarter-end it held approximately 5.35–5.40 million IBIT shares valued at $265–266 million and approximately 3.87–4.00 million ETHA shares valued at $86.8–87 million, for combined ETF positions of about $352.6 million, near 1% of Harvard’s $56.9 billion endowment. IBIT was the largest disclosed public equity holding by reported market value, ahead of Alphabet, Microsoft and Amazon. Bitcoin moved from a near-record of about $126,000 in October 2025 to a Dec. 31 close of $88,429, and Ethereum finished the year about 28% lower. Harvard used ETF wrappers to adjust exposure without on-chain custody, to access standard settlement through prime brokers, and to integrate crypto exposure into existing compliance and reporting workflows. Harvard’s Bitcoin ETF exposure had peaked near $442.8 million earlier in 2025, and its total crypto sleeve remained in a satellite allocation of roughly 1% of assets. The same 13F filing showed a new position in Union Pacific and rebalancing across technology and industrial sectors. The filing and commentary identified valuation debates, policy developments and tax rules as factors that could influence future committee decisions, and upcoming 13F filings will show whether Harvard increases its ETHA stake, holds steady, or further pares IBIT. Source: https://web3businessnews.com/crypto/harvard-crypto-rebalance-q4-2025/

On February 11, 2026, Canton, North Carolina voted unanimously to enact a 12-month townwide moratorium on new data centers, server farms, and cryptocurrency mining, explicitly covering the roughly 185-acre former Pactiv Evergreen paper mill site. The moratorium begins before any formal permit applications were submitted and suspends permit intake and processing while staff draft zoning and performance ordinance updates. Town staff were directed to begin drafting ordinance updates immediately and to schedule public workshops and planning board reviews over the coming year. A public hearing that preceded the vote drew roughly fifty attendees who raised concerns about water supply, noise, grid impacts, environmental cleanup, and job quality. During the moratorium, staff and the planning board will evaluate zoning options and operational requirements, including restricting high-density compute to specific industrial zones, requiring conditional permits with case-specific protections, and introducing performance-based standards for water use, noise at the property line, and real-time energy reporting. Officials directed staff to add reporting, monitoring, and enforcement tools to enable tracking of ongoing operations if projects are approved later. Guidance for project teams and applicants includes prioritizing low-water cooling strategies and heat reuse, coordinating early with the local utility on interconnection studies and grid-impact modeling, preparing acoustic modeling and construction logistics plans that specify truck routes and hours, planning on-site water reuse and stormwater controls sized for extreme events, implementing commissioning plans to validate promised metrics, and pairing technical commitments with workforce development measures such as local hiring targets and apprenticeships. Entitlement schedules should include scoping, public workshops, at least one full planning and board hearing cycle, and contingency for outside peer reviews on noise, water, and grid impacts; teams should monitor draft ordinance text, staff reports, public workshop calendars, planning board materials, and the final vote, and the town may extend the moratorium if additional time is needed. Source: https://web3businessnews.com/policy/canton-pauses-data-centers-crypto/

Federal prosecutors indicted 24-year-old Elmin Redzepagic of Wolcott, Connecticut, on 21 counts alleging a cryptocurrency investment scheme that operated from May 2021 through March 2025. The indictment alleges he solicited funds by representing himself as a skilled crypto trader and diverted large portions of investor deposits into an online gambling venue, with investigators and local reporting tracing about $950,000 lost at that gambling site. Charges include wire fraud and identity-related offenses, and the indictment identifies transactions that prosecutors state could support money laundering counts if concealment or layering is proven. The U.S. Attorney’s Office in Connecticut and IRS Criminal Investigation announced the indictment and named U.S. Attorney David X. Sullivan and IRS CI Special Agent in Charge Thomas Demeo in the announcement. Proceedings are pending in federal court in New Haven and the defendant is presumed innocent. Investigators report that funds moved through exchanges, wallets, and payment accounts before arriving at the gambling platform and in personal spending, and the indictment and accompanying announcements reference tracing affidavits, subpoenas to exchanges and payment firms, asset restraints, forfeiture motions, and potential restitution efforts. Separately, an indictment charged two Glastonbury residents with using stolen identities to claim signup bonuses and withdraw roughly $3 million, and prosecutors referenced other recent multi-million dollar wire fraud resolutions in Connecticut as part of related enforcement activity. Source: https://web3businessnews.com/crypto/ct-crypto-fraud-indictment-gambling/

Revenues for Europe’s cryptocurrency exchanges are projected to increase from USD 19.38 billion in 2025 to USD 164.30 billion by 2034, implying a 26.8 percent compound annual growth rate between 2025 and 2034. MiCA establishes licensing and passporting across the European Union and sets regulatory expectations for custody, asset segregation, disclosures, and reporting. Regulatory alignment under MiCA is drawing traditional banks and asset managers to regulated exchanges because it aligns with institutional mandates for verifiable controls and standardized reporting. Layer 2 networks now process millions of transactions per day and hold tens of billions in value, providing settlement rails for transfers, collateral movements, and tokenized listings. Improvements in wallet security, account abstraction, hardware custody, richer APIs, smarter order routing, and cross-region infrastructure reduce latency, lower slippage, and support derivatives markets and higher open interest. Germany accounts for about 23 percent of the market; the United Kingdom remains a hub for talent and capital markets integration; certain Russian market segments continue activity under cross-border constraints. Bitcoin represents approximately 38 percent of exchange volumes and serves as core collateral and the principal liquidity anchor for spot and derivatives trading. Operators should obtain MiCA authorizations and national registrations, secure diversified banking relationships for fiat rails, deploy market surveillance and reference data pipelines, integrate with Layer 2 settlement rails, and localize fiat ramps in priority markets. Investors should monitor active verified users, net fiat inflows, derivatives open interest, on-chain settlement share tied to Layer 2s, and logged compliance milestones as indicators of custody quality and revenue diversification. Key risks include price volatility that can widen spreads and stress collateral systems; evolving supervision and disclosure rules; fragmented liquidity across centralized exchanges, regional brokers, and on-chain automated market makers; technical constraints such as fee spikes, bridge risk, and settlement bottlenecks; and limited banking relationships and fiat connectivity in several jurisdictions. Growth is expected to concentrate in derivatives and prime brokerage products, expanded custody and structured exposures, collateral transformation and cross-margin services, and tighter integration of tokenized real-world assets with exchange liquidity. Platforms that support on-chain settlement, direct Layer 2 connectivity, and provide transparent, auditable data will attract institutional usage. Execution discipline in converting regulatory clarity and scaling technology into improved market quality, deeper liquidity, and institutionally acceptable products will determine who captures share toward the 2034 revenue projection. Source: https://web3businessnews.com/crypto/europe-crypto-exchanges-2034/

Show description: BlockFills paused client deposits and withdrawals and is returning attempted inbound transfers while coordinating with investors and counterparties to stabilize liquidity. Trading to open or close positions in spot and derivatives remains allowed under tighter limits, heightened risk checks, and faster liquidation triggers. Accounts that fall below required margin can face forced closures and loans with deteriorating collateral may be called or unwound. BlockFills serves about 2,000 institutional clients and reported roughly $60 to $61 billion in trading volume in 2025, and lists Susquehanna Private Equity Investments and CME Group among its backers. There is no public evidence the firm is insolvent and the company framed the suspension as a precaution while it seeks additional support. The action followed an approximately 24 percent fall in Bitcoin from about $78,995 to near $60,000, which tightened collateral haircuts and funding lines across the market and increased margin demands. Market data showed about $395.8 million in liquidations in a 24-hour stretch during the drawdown and sessions recorded volatility and a compressed derivatives basis. Operational implications for counterparties and trading desks include suspended deposits and withdrawals, continued but restricted trading, and the potential for under-margined positions or loans to be closed without prior notice. Monitoring items for institutions include official BlockFills communications and client notices, reopening timelines, evidence of forced position closures or widening OTC spreads, peer behavior on restrictions and haircut changes, and daily modeling of funding and collateral scenarios; institutions should also confirm margin policies with counterparties, diversify execution and lending venues, and prepare operational playbooks for short-notice policy changes. Source: https://web3businessnews.com/crypto/blockfills-suspends-withdrawals/

The European Commission has drafted a measure to prohibit transactions with exchanges and crypto asset service providers registered in Russia. The draft shifts from targeted listings to an activity-based approach that bars dealing with Russian-registered crypto venues and service providers. Named targets include Garantex, the A7 payment platform and its A7A5 ruble stablecoin. The package also includes expanded banking blacklists, restrictions on shadow-fleet tankers used for oil and LNG shipments, and limits on exports of metals and chemicals, coordinated with G7 partners. Enforcement would rely on leverage over EU-licensed exchanges, licensed crypto asset service providers, payment processors and banks to implement and monitor the ban. Stablecoin issuers that seek access to EU markets could be required to add blacklists, tighten redemption controls, and implement enhanced screening. The draft contemplates selective secondary measures to restrict non-EU platforms' access to EU markets and banking services if they do not align with the prohibition. Officials and analysts report earlier actions reduced flows into sanctioned entities via centralized exchanges by roughly 30 percent. The proposal calls for firms to map exposure to Russian-registered services, update counterparty due diligence and sanctions clauses, harden wallet screening and geofencing, enhance OTC and P2P monitoring, and reassess stablecoin redemption mechanics and counterparty onboarding. The draft calls for firms to establish internal ownership for enforcement tasks, test kill switches for counterparties and liquidity bridges, prepare customer communications for rapid offboarding, and integrate monitoring tools for tokenized ruble exposure and high-risk liquidity bridges. Next steps include publication of final legal text, national implementation schedules, and any secondary measures to compel compliance by non-EU actors. Source: https://web3businessnews.com/crypto/eu-ban-russia-linked-crypto/