U.S. regulators and the United Kingdom announced several notable developments affecting crypto businesses and investors.
CFTC Sues Utah Over Prediction‑Market Regulation
On October 27, the Commodity Futures Trading Commission filed a lawsuit against the state of Utah, seeking to block Utah’s use of its gambling laws to restrict CFTC‑registered prediction‑market platforms. The CFTC argues that the Commodity Exchange Act gives it exclusive jurisdiction over derivatives traded on federally registered markets, preempting conflicting state rules. Utah responded by filing criminal charges on October 28 against Kalshi and its co‑founders for alleged gambling violations. No convictions have been reported.
FCA Secures Settlement Limiting HTX’s UK Activities
The U.K. Financial Conduct Authority announced a settlement on October 29 that bars the crypto exchange HTX (formerly Huobi) from knowingly communicating unlawful crypto‑asset financial promotions to U.K. consumers. The settlement, reached in the High Court, restricts the exchange’s website, app, and social‑media outreach to U.K. users. New U.K. registrations and deposits are no longer permitted, though the agreement does not constitute an admission of liability.
U.K. Proposes Tax Treatment for Stablecoins and Crypto Lending
In the October 28 Budget, the U.K. government outlined two tax proposals slated for the Finance Bill 2026‑27, expected to take effect in April 2027 if enacted. The first would treat eligible stablecoins—those pegged to fiat, backed by assets, widely available, and designed for payment—as money for tax purposes, exempting disposals from Capital Gains Tax and treating lending returns as savings income. The second proposal would defer Capital Gains Tax on transfers into qualifying crypto‑lending or liquidity‑pool arrangements until an economic disposal occurs, applying a “no gain, no loss” basis for individuals and trustees.
DOJ Charges Six in Alleged NFT Investment Scam
The U.S. Department of Justice announced on October 27 that six individuals were charged in connection with an alleged NFT investment‑fraud scheme operating from Madagascar and involving actors in Southeast Asia and China. Prosecutors allege that the scheme used dating platforms and fake personas to lure victims, who were then directed to fraudulent NFT investment sites and persuaded to fund cryptocurrency wallets. Approximately 74 wallets linked to about 800 victims were identified, and the DOJ’s Scam Center Strike Force has previously restrained more than $1 billion related to cryptocurrency fraud.
Implications for Crypto Businesses
These actions highlight the importance of jurisdictional analysis for prediction‑market operators, rigorous compliance with financial‑promotion rules for exchanges, and careful tax planning for stablecoin issuers and crypto‑lending platforms. Entities should maintain detailed records of customer locations, promotional activities, and transaction flows to address evolving regulatory expectations.
