Bybit Adjusts EEA Services to Align with MiCA Regulations
The second largest crypto exchange by trading volume, Bybit, announced that it will be implementing some temporary changes to its operations in the European Economic Area (EEA) to try and comply with changing regulatory frameworks. Bybit’s main motivation for this move is to comply with the Markets in Crypto-Assets Regulation (MiCA).
Focus on MiCA Licensing in Austria
Bybit is actively pursuing a MiCA license in Austria, which is a key step in its compliance-first approach. The license will allow Bybit to operate under the strict European regulatory requirements.
Ben Zhou, co-founder and CEO of Bybit, believes that obtaining the MiCA license will be a major strategic milestone for Bybit, and will also allow the exchange to exceed the expectations of both regulators and its users before compliance becomes a problem.
Temporary Adjustments to EEA Operations
To ensure full compliance with the MiCA regulations, particularly the reverse solicitation principle, Bybit temporarily stopped all general communications with EEA users. While this adjustment limits certain activities, existing customers still have uninterrupted access to their crypto assets. The company also assured its users that this measure is only temporary and to avoid any regulatory breaches. Bybit stated that it will re-engage with the EEA market once it secures the MiCA license.
Additionally, the company is actively collaborating with regulatory authorities to make the licensing process as quick and painless as possible. For now, Bybit plans on becoming one of the first fully compliant platforms serving the EEA crypto community.
Other European Exchanges Adjust to MiCA Rules
Bybit is not the only exchange making big changes to comply with MiCA. Coinbase Europe, Coinbase Germany, and Coinbase Custody International announced plans to delist several stablecoins, including Tether’s USDT, PAX, PYUSD, GUSD, GYEN, and DAI, starting Dec. 13 to ensure compliance with MiCA’s regulations and requirements.
Despite these changes, Coinbase will still support USD Coin (USDC) and the euro-pegged EURC, which already meet MiCA’s regulatory standards. The European Union's very strict stablecoin regulations were introduced in June of 2024. The full enforcement of the framework for crypto asset service providers (CASPs) is slated for Dec. 30.
Early Bitcoin Investor Sentenced to Prison for Tax Evasion on $3.7 Million BTC Sale
An Austin, Texas man, Frank Richard Ahlgren III, has been sentenced to two years in prison for filing false tax returns that underreported the capital gains from selling $3.7 million worth of bitcoin, the United States Department of Justice (DOJ) announced today.
According to the DOJ, Ahlgren was an early Bitcoin investor who began purchasing bitcoin in 2011. In 2015, he acquired 1,366 bitcoins through his Coinbase account, a year in which the price of bitcoin peaked at approximately $495 per coin. By October 2017, Bitcoin’s value had surged, and Ahlgren sold 640 bitcoins for $5,807 each, totaling a gain of $3.7 million. He then used the proceeds to purchase a home in Park City, Utah.
However, when filing his 2017 tax return, Ahlgren misrepresented the gains by inflating the cost basis of his bitcoin purchases, claiming he had acquired the coins at prices higher than market rates. This misreporting significantly reduced the reported capital gains.
Between 2018 and 2019, Ahlgren sold additional bitcoins worth over $650,000 but failed to report these transactions on his tax returns entirely. In an attempt to conceal his gains, he transferred funds through multiple wallets, exchanged bitcoin for cash in person, and using mixers to anonymize his bitcoin transactions.
In total, the DOJ stated that Ahlgren’s actions resulted in a tax loss exceeding $1 million.
“Frank Ahlgren III earned millions buying and selling bitcoins,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division “But instead of paying the taxes he knew were due, he lied to his accountant about the extent of a large portion of his gains, and sought to conceal another chunk of his profits through sophisticated techniques designed to obscure his transactions on the bitcoin blockchain. That conduct today earned him a two-year sentence.”
The U.S. District Court Judge Robert Pitman sentenced Ahlgren to two years in prison, followed by one year of supervised release. Additionally, Ahlgren was ordered to pay $1,095,031 in restitution to the U.S. government.
“Ahlgren will serve time because he believed his cryptocurrency transactions were untraceable. This case demonstrates that no one is above the law. My team at IRS Criminal Investigation has the expertise and tools to track financial activity, whether it involves dollars, pesos, or cryptocurrency,” said Acting Special Agent in Charge Lucy Tan of IRS-Criminal Investigation (IRS-CI)’s Houston Field Office. “This case marks the first criminal tax evasion prosecution centered solely on cryptocurrency. As the prices for cryptocurrency are high, so is the temptation to not pay taxes on its sale. Avoid the temptation and avoid federal prison.”
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