Monoup News Digest: Main Updates from Fintech Industry
Today we uncover this week most prominent industry developments. And the spotlight is once again on Tether, issuer of USDT, which finds itself caught between two fires. On one side, company consistently cooperates with authorities by freezing massive volumes of tokens even before official court rulings are issued — a practice that undermines its credibility among business partners. On the other hand, it falls short of full regulatory compliance, occasionally delaying these very freezes and failing to establish a clear, firm stance. This stark contrast with Circle keeps Tether squarely in the crosshairs, and today we dive into what transpired.
In parallel, a noticeable shift toward strict compliance is taking hold in traditional e-commerce — a sector long considered low-risk. However, the rise of subscription-based products has sparked a wave of questionable customer retention tactics as companies attempt to stand out in a crowded market. To avoid churn, businesses have devised convoluted cancellation flows packed with multi-step confirmations and embedded upsells. While this approach has drawn regulatory scrutiny for years, discussions have finally turned into enforceable action.
Let's break it all down step by step.
Brazil’s iGaming Ban Triggers a Drop in PIX Payment Volume
The regulatory U-turn by Brazilian authorities against the online gambling and betting industry sent immediate shockwaves through the national payment landscape. Strict prohibition triggered an instant drop of nearly 10% in transaction volumes across PIX payment network, while major global operators like Flutter, Entain, and Allwyn publicly declared full compliance with the mandate and halted new deposits. This rapid decline unfolded in just the first few days following the policy shift announcement.
Regulators are stepping up enforcement, issuing blocking orders for over 5,200 betting-related domain names and formally requesting the removal of 186 mobile apps from major app stores.
Meanwhile, the legislative framework surrounding the ban remains fluid and could take an even harsher turn. Amendments currently being drafted in parliament introduce direct criminal liability: illegal gambling operators face between 4 and 6 years of imprisonment, while payment intermediaries and acquirers processing those transactions risk 2 to 4 years behind bars. Brazil’s sharp pivot — from issuing licenses and fostering market growth to imposing an outright ban — unfolded so fast that some operators who purchased licenses never got the chance to fully utilize them. With refunds highly unlikely, the episode underscores the political volatility of the sector: what is permitted today could easily be outlawed tomorrow.
New York Regulates Subscriptions: Click-to-Cancel Goes Mandatory
As of October 1, 2026, stringent rules for subscription services took effect in New York City: Click-to-Cancel mandate requires businesses to make canceling a recurring charge just as simple as signing up for one. The requirement applies universally to all merchants serving NYC residents, regardless of where the business is physically or legally incorporated — be it a local service or an international digital platform. All variations of “dark patterns” are banned, including hiding cancellation buttons, dragging users through survey chains, or requiring phone calls to customer support.
Violations carry fines starting at $525 and escalating up to $3,500 per incident, with the city empowered to launch direct litigation against non-compliant entities on behalf of its residents. A dedicated online portal now allows consumers to lodge complaints directly against non-compliant merchants. Companies can no longer rely on the classic defense of “not knowing the user's exact location,” making location verification essential. Technically, merchants can implement this via ZIP code validation or simply standardize their cancellation flows to Click-to-Cancel for all U.S. customers.
Similar initiatives have long been advocated by the FTC at the federal level, though nationwide rollout remains pending. However, based on the experience of Monoup and our clients, many payment service providers aren't waiting for federal mandates — they are acting proactively to establish Click-to-Cancel as the default industry standard for subscription acquiring.
Tether in the Crosshairs of the U.S. Senate
Tether, the world’s largest stablecoin issuer, faces mounting scrutiny from U.S. regulators. A recently published investigation by a U.S. Senate subcommittee revealed that out of 846 cryptocurrency wallets linked to Iranian entities, approximately 84% exclusively used USDT to settle transactions. These findings fueled intense accusations of inadequate AML controls and systemic non-compliance with U.S. sanction regimes.
In response to public backlash, Tether reiterated its willingness to cooperate with law enforcement, highlighting its practice of freezing addresses upon initial request without waiting for formal court orders. However, the Senate report specifically highlighted several instances where the company's response was delayed and asset freezes were incomplete.
This predicament creates a strong incentive for Tether to adopt an even more aggressive policy of preemptive asset freezes. The Tron network — serving as the primary settlement pipeline for Asian and Middle Eastern USDT traffic — remains under heightened scrutiny, posing direct infrastructure risks for businesses relying on the chain. While immediate drastic measures aren't guaranteed, diversifying payment flows is a prudent step in light of these developments.
Lawsuits Mount Against Tether Over Asset Freezes
Tether’s tendency to freeze assets without judicial oversight has simultaneously sparked another high-stakes legal battle. International payment platform Conduit filed a lawsuit in the U.S. District Court for the Southern District of New York, accusing the stablecoin issuer of unlawfully freezing 2.76 million USDT in its operational wallet. The freeze has dragged on for over a year, stemming from a Brazilian police investigation into a former Conduit client, Onix Intermediações.
Conduit asserts that Brazilian law enforcement officially confirmed no claims exist against Conduit and that the company holds no target status in the investigation. Furthermore, the business relationship with the client in question was terminated before the frozen wallet was created. Nonetheless, Tether refuses to release the funds, holding them within its reserves and potentially generating yield on the capital. Consequently, Conduit is suing not only for the release of its liquidity but also for full compensation of all accrued interest income.
This is far from an isolated case: Thai investors previously filed a similar suit against Tether over $42,4 million in frozen funds. The trend brings to light the core structural flaw of centralized stablecoins: the unchecked power of issuers to freeze assets to safeguard their own compliance standing poses a direct threat to the legal security and operational stability of legitimate businesses. No formal evidence has confirmed these funds were illicit, nor is it clear whether an official investigation into the wallet occurred. Instead, Tether chose to act preemptively based on its internal risk assessment — a decision now left for the courts to validate or strike down.
Ultimately, regulatory clarity remains elusive. Freezing assets without court orders is widely criticized, as it risks collateral damage through errors and insufficient investigation. Yet, while litigation drags on for years, crypto assets can vanish from the wallet in minutes. Effectively thwarting bad actors requires speed, but the existing legal paradigm doesn't accommodate rapid unilateral action. This dilemma highlights an urgent need for dedicated fast-response frameworks and modernized legal procedures. Until those exist, this fundamental conflict of interest will persist.
These are the news from Monoup editorial team for this week. Follow us in Telegram and get notified about all events immediately and watch out for next digests if you prefer to read all news together within analytical lenses.
