Global Crypto Regulation Roundup

February 15th, 2026 – February 28th, 2026

The second half of February has illustrated the fragmented reality of global crypto compliance, revealing a landscape where jurisdictions are moving at vastly different speeds. In the United States, state-level progress is focusing in different areas: while New York prepares to crack down against unlicensed operators, Indiana is passing legislation that could see digital assets used in state investments. In Asia, Pakistan is executing a pivot from prohibition to full legalization, whereas India’s judiciary has firmly placed the burden of regulatory clarity back onto the legislature. Meanwhile, in South Korea, a dramatic $40 billion operational error has served as a reminder that without institutional-grade internal controls, the industry cannot achieve true mainstream integration. As we close out February, regulatory frameworks continue to develop and effective enforcement of controls and standards seem paramount.

• US State-Level Regulation

New York Proposes Criminal Penalties for Unlicensed Crypto Firms

New York is signaling an escalation in its oversight of the digital asset space. State Senator Zellnor Myrie, alongside Manhattan District Attorney Alvin Bragg, has introduced the Cryptocurrency Regulation Yields Protections, Trust, and Oversight Act (CRYPTO Act). Senate Bill S. 8901 proposes a fundamental shift: elevating the operation of a virtual currency business without a proper BitLicense or state banking charter from a civil compliance issue to a criminal offense. Depending on the volume of illicit activity, unlicensed operators could face severe felony charges - up to a Class C felony for transaction volumes exceeding $1 million in a year.

Indiana Passes Crypto Rights and Retirement Bill

In contrast to New York’s crypto focus, Indiana’s move positions it as a pro-innovation sanctuary. The state legislature has overwhelmingly passed House Bill 1042, sending a comprehensive crypto rights bill to Governor Mike Braun. The legislation explicitly bans discriminatory taxes on digital assets and protects the rights of residents to self-custody and mine cryptocurrencies. Perhaps more importantly though, this bill promotes integration with traditional finance; by July 1st, 2027, specified state retirement and savings plans will be required to offer a self-directed brokerage option that includes at least one cryptocurrency investment choice.

• Emerging Markets and Sovereign Adoption

Pakistan Senate Committee Clears Path for Legal Crypto Trade

Pakistan is officially closing the door on its 2018 crypto prohibition era. The Senate’s Standing Committee on Cabinet has approved the draft Virtual Asset Act 2026, laying the statutory groundwork for a fully regulated digital asset market. Under this new framework, the Pakistan Virtual Assets Regulatory Authority (PVARA) is granted the explicit mandate to issue licenses for crypto exchanges, mining operations, and token issuances. With PVARA having already issued ‘No Objection Certificates’ to major platforms like Binance and HTX, the infrastructure for institutional compliance is taking shape. Senator Dr. Afnan Ullah Khan has indicated that major assets like Bitcoin and Ethereum could be traded legally within weeks of final parliamentary and presidential approval, signaling the start of a significant new crypto market in South Asia.

India’s Delhi High Court Refuses to Legislate from the Bench

The legal vacuum surrounding India’s crypto sector was highlighted this week as the Delhi High Court dismissed a plea seeking judicial intervention against the crypto exchange Bitbns. After an investor faced severe withdrawal limits and inaccurate asset valuations, they petitioned the court for a Central Bureau of Investigation (CBI) probe and the introduction of strict crypto regulations. However, Justice Purushaindrakumar Kaurav rejected the plea, ruling that cryptocurrency exchanges are private entities and do not qualify as ‘the State’ under constitutional law. The court's message reinforced that regulatory frameworks are the exclusive domain of Parliament, not the judiciary. For investors and VASPs operating in India, the market remains heavily reliant on existing general civil and criminal law frameworks.

• Consumer Protection and Compliance

South Korea Demands Stricter Rules Following $40 Billion Exchange Error

South Korea’s Financial Supervisory Service (FSS) has called for drastically tougher regulations following an operational error at the local exchange Bithumb. During a promotional event, the exchange mistakenly credited nearly 700 users with approximately 620,000 BTC, accidentally creating a $40 billion giveaway that triggered immediate market volatility. While Bithumb managed to retrieve 99% of the funds and absorb the resulting $9 million loss using company funds, FSS Governor Lee Chan-jin stated that this only emphasized the danger that severe weaknesses in operational safeguards represented, and called for improved regulatory mechanisms to be implemented before virtual assets were brought into the legacy financial system.