This report summarizes key global crypto industry tax and regulatory developments from the first half of February 2026.
On the tax front, Hong Kong disclosed background documents related to amendments to the Inland Revenue Ordinance, reviewing the current state and future plans for its digital asset market, and revealing key opinions and concerns raised by lawmakers regarding the implementation of the CARF.
On the regulatory front, the UK formally enacted The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, establishing a comprehensive regulatory framework slated to take effect in 2027. And the UK government appointed HSBC as the platform provider for the pilot issuance of its "Digital Gilt Instrument," advancing the DIGIT pilot. The US CFTC updated its interpretation concerning stablecoin payment tools, expanding the scope of eligible issuers. The SEC Chairman testified before the House, announcing efforts to reduce corporate disclosure burdens and supporting Congress's advancement of the CLARITY Act. The US Department of Justice imposed a $4 million criminal fine on Virtual Asset Trading platform Paxful for failing to comply with Bank Secrecy Act requirements.
The Panel on Financial Affairs of the Hong Kong Legislative Council published paper CB(1)56/2026(07), titled "Background brief on amendments to the Inland Revenue Ordinance to implement the Crypto-Asset Reporting Framework and the latest arrangements for the Common Reporting Standard". The paper reviews the current
state and future plans for Hong Kong's digital asset market development and discloses lawmakers' key opinions and concerns regarding the implementation of the CARF. The Hong Kong government initiated a public consultation on the proposals for implementing the CARF on December 9, 2025, and plans to submit legislative proposals to the Legislative Council in 2026.Click here to read the original text
The UK government formally enacted The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, establishing a comprehensive regulatory framework for digital assets. The new rules clearly define regulated assets (such as qualifying stablecoins and tokenized investment products) and require all companies operating in the UK or serving UK consumers, including overseas platforms and staking service providers, to obtain authorization from the Financial Conduct Authority. The new regulations are scheduled to come into effect on October 25, 2027. Click here to read the original text
The Market Participants Division of the US Commodity Futures Trading Commission reissued staff letter 25-40, making a limited amendment to the definition of "payment stablecoin" to explicitly clarify that national trust banks can also qualify as compliant issuers under the letter's no-action position. The Office of the Comptroller of the Currency had authorized the establishment of the first national trust banks with the authority to custody and issue payment stablecoins during the first Trump administration. This revision aims to prevent a definitional gap in the regulatory framework and extend the no-action relief to cover compliant issuers that may emerge within the banking system. Click here to read the original text
SEC Chairman Paul S. Atkins testified before the House Financial Services Committee at a hearing titled "Oversight of the SEC." He stated his intention to refocus the agency's efforts on its three statutory missions: investor protection, fair and orderly markets, and capital formation. He also aims to push corporate disclosures back to the "materiality" principle and streamline compliance burdens like annual reports to improve the environment for companies going public and raising capital. Atkins expressed support for Congress advancing the CLARITY Act and announced the launch of "Project Crypto" in collaboration with the CFTC to advance token classification and potential exemption arrangements. Click here to read the original text
The US Department of Justice announced a criminal sentence against virtual asset trading platform Paxful, ordering it to pay a $4 million criminal fine after pleading guilty to three counts of conspiracy. The DOJ stated that the platform, for an extended period, was allegedly marketed with features like "no KYC" and "weak AML controls," failed to implement an effective anti-money laundering program required by the Bank Secrecy Act, and did not file required suspicious activity reports, allowing transactions linked to criminal fund flows to persist. Click here to read the original text
The Securities and Futures Commission of Hong Kong introduced the "High-level framework for licensed virtual asset trading platforms offering virtual asset perpetual contracts," expanding the scope of services for licensed intermediaries involved in virtual asset trading to include margin financing arrangements. The SFC clarified that perpetual contracts should in principle only be offered to professional investors and requires platforms to assess clients' derivatives knowledge before providing trading services. The framework also mandates requirements for transparency in pricing and funding rate methodologies, margin and liquidation mechanisms, insurance fund disclosure, cross-market surveillance, and other risk control measures. Click here to read the original text
HM Treasury announced that the government has appointed HSBC as the platform supplier for the pilot issuance of the "Digital Gilt Instrument" following a competitive procurement process. DIGIT is positioned as a "digitally native, short-dated" instrument issued on platforms within the Digital Securities Sandbox, enabling on-chain settlement. It operates independently of the government's main debt management program and represents a key pillar of the UK's wholesale financial market digitalization strategy. The UK government committed to collaborating with more suppliers subsequently to refine the DIGIT design. Click here to read the original text
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