This week’s developments focused on how crypto businesses communicate with customers, protect systems and recover stolen assets. New York issued detailed advertising standards for licensed virtual-currency firms, federal authorities announced a major recovery connected to the Binance hack, and prosecutors sought forfeiture of USDT traced to alleged romance-investment fraud. In the United Kingdom, targeted stablecoin amendments advanced through Parliament, while the federal-state conflict over prediction markets expanded to Arkansas.

New York Sets Advertising Standards for Licensed Crypto Firms

On November 12, the New York Department of Financial Services issued guidance on virtual-currency advertising and marketing for BitLicensees and limited-purpose trust companies engaged in virtual-currency business. Covered entities must develop, maintain and enforce policies proportionate to their size, customer base and business model. A board or designated board committee must review and approve those policies annually.

DFS expects marketing claims to be evidence-based and verifiable. Its examples of problematic conduct include promoting “no-fee trading” while omitting spreads or markups, presenting performance without relevant time periods, and misrepresenting regulatory or licensing status. Disclosures must be clear and conspicuous, benefits must be presented alongside material risks, and compensated testimonials must identify the nature and amount of compensation.

The guidance reaches content distributed by or on behalf of a regulated entity, regardless of whether it is labeled “education” and regardless of channel. It also calls for secondary review, recordkeeping, monitoring for impersonation accounts, and diligence and oversight of third-party promoters. Policies consistent with the guidance must be available for DFS review beginning May 12, 2027.

For regulated firms, this is not simply a copy-editing exercise. Marketing, compliance and business teams should create an approval trail linking each factual claim to supporting evidence and review affiliate, influencer, podcast, social-media and institutional materials under the same governance framework.

DOJ Announces $1.2 Billion Recovery Action After Binance Hack

On November 12, the Justice Department announced court-authorized seizure or restraint of more than $1.2 billion in cryptocurrency stolen from Binance. DOJ attributed the October 29 theft of more than $6 billion in virtual assets to North Korean military actors known as TraderTraitor. Government and private-sector efforts have reportedly frozen more than $2.7 billion, while tracing and forfeiture proceedings continue.

This materially advances the Binance hack previously covered by Kelman PLLC. The earlier article addressed the breach, attribution and Binance’s proposed response; this week’s development is the government’s confirmation that courts have authorized seizure or restraint of more than $1.2 billion of the stolen assets. Court-authorized restraint or seizure does not itself resolve final ownership, and forfeiture proceedings may allow competing claims to be heard.

The same announcement disclosed the seizure of cloud infrastructure used in “FaceStealer,” an alleged North Korean campaign involving compromised video-meeting accounts, recorded webcam footage, deepfake videos and malware disguised as a fix for technical problems. DOJ says the campaign caused more than $400 million in crypto losses over 18 months and increasingly targeted open-source maintainers.

Exchanges and Web3 businesses should treat video identity as untrusted, require out-of-band verification for access changes and transfers, separate developer credentials from treasury authority, and maintain an incident plan capable of quickly supplying wallet addresses and transaction data to counterparties and investigators.

Federal Prosecutors Seek Forfeiture of 456,602 USDT

On November 9, the U.S. Attorney’s Office in Massachusetts filed a civil forfeiture action involving 456,602 USDT allegedly traceable to romance and investment fraud. The complaint alleges that scammers cultivated trust through dating sites and Facebook, directed victims to fake investment platforms, and demanded additional “fees” and “taxes” when victims attempted to withdraw. Authorities traced the proceeds to two unhosted wallets and seized the tokens.

The allegations have not been adjudicated. Civil forfeiture permits third parties to file claims before the property is forfeited and potentially returned to victims. That distinction matters: seizure preserves assets, but it does not automatically establish the government’s ownership or guarantee restitution to every person who suffered a loss.

For victims, early evidence preservation can materially improve both tracing and claim preparation. Relevant records include wallet addresses, transaction hashes, exchange statements, bank transfers, platform screenshots, communications, device data and any demand for additional payments. Anyone asserting an innocent ownership interest in seized crypto should also monitor filing deadlines, because failing to submit a properly supported claim can forfeit the opportunity to contest the government’s case.

UK Stablecoin Perimeter Changes Advance Through Parliament

On November 11, the House of Lords approved the draft Cryptoassets (Miscellaneous Amendments) Regulations 2026, following committee consideration in both Houses. The instrument still must be formally made before it becomes law; it should not yet be described as an effective regulation.

The amendments are designed to keep qualifying UK-issued stablecoins used in payment chains from being regulated as though each payment participant were dealing or arranging in cryptoassets. They also exclude temporary holding connected with a payment transaction from the crypto safeguarding activity. Issuance remains regulated, while lending and borrowing and overseas-issued stablecoins remain within the relevant crypto activities.

The draft instrument’s commencement provision states that its dealing and financial-promotion amendments will take effect on October 25, 2027, with other provisions generally commencing after the instrument is made. Payments firms should therefore distinguish this week’s parliamentary progress from present authorization requirements. They should also map whether a proposed service involves issuance, payments, temporary custody, lending or an overseas-issued token, because the exclusions do not apply uniformly.

Federal Government Expands Its Prediction-Market Fight to Arkansas

On November 12, the United States and CFTC filed a federal complaint seeking to stop Arkansas’s enforcement action against Kalshi. Arkansas alleges that Kalshi’s event contracts constitute illegal gambling and seeks restitution, penalties, taxes and injunctive relief. The federal plaintiffs contend that the contracts are swaps traded on a CFTC-regulated designated contract market and that the Commodity Exchange Act preempts Arkansas from regulating or prohibiting them.

This is a material new development in the federal-state dispute discussed in recent roundups. The earlier Utah litigation and the CFTC’s November 5 access interpretation concerned the same preemption conflict; the Arkansas complaint shows the federal government adopting that position in another jurisdiction and seeking relief against both the pending state case and future enforcement affecting CFTC-regulated markets.

No court has resolved the Arkansas dispute. Prediction-market operators and intermediaries should continue preserving geolocation, product-review, self-certification and customer-protection records rather than assuming that federal registration has eliminated state risk. The growing number of cases may eventually produce clearer appellate rules, but current exposure remains jurisdiction-specific.

Businesses and individuals evaluating advertising compliance, stablecoin regulation, prediction-market exposure, cyber incidents or digital-asset recovery can contact Kelman PLLC to discuss their circumstances and available legal options.

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