Report: Terra Co-Founder Do Kwon Plans to Appeal Detention Extension After Arrest in Montenegro

March 26, 2023 Bitcoin.com

Google Trends Data Reveals Searches for ‘Banking Crisis,’ ‘Bank Runs,’ Skyrocket

March 19, 2023 Bitcoin.com

FBI, NY authorities probes collapse of TerraUSD stablecoin: Report

March 14, 2023 Coin Telegraph

The controversial founder of Terraform Labs, Do Kwon is at the center of the investigation, despite believed to be hiding out in Serbia.

The United States Justice Department is reportedly investigating the collapse of the TerraClassicUSD (USTC) stablecoin which contributed to a $40 billion wipe out in the Terra ecosystem last May.

Two agencies within the department — the Federal Bureau of Investigation (FBI) and Southern District of New York (SDNY) have interrogated former staff at Terraform Labs in recent weeks, according to a Mar. 13 report by the Wall Street Journal (WSJ).

The probe covers similar ground to a lawsuit filed against Terraform Labs and its founder Do Kwon by the U.S. Securities Exchange Commission on Feb. 16, according to people familiar with the matter.

Among topics that investigators have asked about was the relationship between Chai, a South Korean-based payment platform and the Terra blockchain on which USTC operated.

The SEC alleged in its filing alleged that Kwon misled investors into believing that Chai transactions were processed on the Terra blockchain.

*Do Kwon speaking at a conference about Terra before the LUNC and USTC collapsed. Source:* *Terra.*

The SEC in its lawsuitalso accused Kwon of misleading investors about the risks of the algorithmic-based stablecoin, which is designed to be pegged 1:1 to the U.S. dollar.

It is unclear what specific charges the Justice Department is potentially pursuing. The investigation does not necessarily mean that charges will be filed.

Since the collapse, Kwon reportedly left South Korea for Singapore, Dubai, and now Serbia, where he is now believed to be, according to South Korean officials. Two South Korean authorities were recently sent to Serbia to find Kwon but were unsuccessful in their search attempts.

Kwon however claims he is not “on the run” despite the South Korean prosecutors issuing Kwon an arrest warrant on Sept. 14 and a red notice filed by Interpol, a global law enforcement agency on Sept. 26.

However, Kwon claims that he hasn’t seen a copy of the South Korean arrest warrant, according to an October interview on the Unchained Podcast with Laura Shin, and he continues to deny fraud allegations on social media.

I am not “on the run” or anything similar - for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide
— Do Kwon (@stablekwon) September 17, 2022

Meanwhile, New York prosecutors are understood to be investigating a series of chat-group investigations from former members at Jump Trading, Jane Street and Alameda Research, which filed for bankruptcy alongside FTX, according to a Mar. 13 report by Bloomberg.

The investigation is reportedly looking into whether market manipulation tactics were involved in the TerraUSD stablecoin project.

Cointelegraph reached out to Terraform Labs but did not receive an immediate response.

Terraform Labs co-founder Do Kwon gets probed by Singaporean authorities

March 6, 2023 Coin Telegraph

Coin Telegraph

Local police in Singapore sent an email on Monday saying that they have begun a probe connected to Do Kwon’s Terraform Labs.

Local authorities in Singapore announced they had begun a probe that is connected to Do Kwon’s Terraform Labs.

According to a Bloomberg report, Singaporean police sent an email on March 6, which said, “investigations have commenced in relation to Terraform Labs.” The email also added that the inquiries are “ongoing,” and Do Kwon is not currently in the city-state.

Last month, on Feb. 16, the United States Securities and Exchange Commission (SEC) accused Do Kwon and Terraform Labs of fraud in a new lawsuit.

Some voices in the crypto space have criticized this lawsuit as a way for the SEC to go after stablecoins with future lawsuits. Lawyers in the industry have even called the SEC’s comparisons of assets “wild."

Meanwhile, the SEC probe uncovered that Kwon removed around 10,000 Bitcoin (BTC) from the Terra platform and the Luna Foundation Guard, which he eventually changed into fiat. In total SEC allegations claim Kwon has laundered over $100 million worth of Bitcoin since the initial collapse of the platform.

At the time of writing, Do Kwon has made no comment. The Terraform Labs co-founder has been active on social media throughout the entire scandal. However, he has not tweeted since the beginning of February.

This entire saga has its roots back in May 2022 when the stablecoin UST dropped from its peg to the U.S. dollar. This caused the price to collapse to zero, which subsequently caused a major implosion in the digital asset market with a loss of nearly $40 billion.

Terraform Labs has also been under investigation by authorities in South Korea, where a warrant was out for Kwon’s arrest. South Korean police traveled to Serbia in their efforts to locate Kwon.

On Feb. 15, South Korean prosecutors requested a warrant for the arrest of a local e-commerce executive who they accused of accepting LUNA for promoting Terra Labs.

Binance custody partner clarifies Singapore licensing plans

March 2, 2023 Coin Telegraph

Binance

Binance recently rebranded its custody arm, now called Ceffu, which launched in Singapore in November 2022.

Amid various reports about Binance trying to revive its crypto licensing plans in Singapore, the crypto exchange has come out to set the record straight. Binance told Cointelegraph that Ceffu, its "independent institutional custody partner," is the one looking to apply for an institutional crypto custody license when Singapore’s central bank opens up applications.

Singapore has established itself as a hub for crypto businesses owing to its flexible tax policies, access to diverse tech talent, and its convenient location that allows companies to operate smoothly within the region in Asian time zones.

The Monetary Authority of Singapore (MAS) is expected to open up the crypto custody licenses for institutions after relevant amendments to their Payment Services Act. Cointelegraph reached out to Ceffu to get their insights on the Singaporean crypto market and their upcoming plans of offering crypto custody services to institutional clients.

Athena Yu, vice president of Ceffu, told Cointelegraph that Singapore has a reputation for innovation, good corporate governance and a strong regulatory framework. It's no surprise that institutional investors are attracted to setting up shop here. She explained:

“Ceffu launched its Singapore business specifically to provide custody services to institutional investors. Once the relevant amendments to the Payment Services Act go live and the application for a custody license opens, Ceffu will make its official application with the MAS."

According to a report published in Nekki, the world's leading cryptocurrency exchange recently rebranded its custodial arm to "Ceffu", which launched its institutional custody services in Singapore in November. The crypto exchange didn't reveal their financial relationship with the rebranded crypto custodian.

Binance Custody is now Ceffu.

After more than a year of operation, we've rebranded to better reflect the breadth of our institutional custody and liquidity solutions.

Learn more ➡️ https://t.co/PVrygNZ8ZV pic.twitter.com/CWTpoS85Z1
— Ceffu (@CeffuGlobal) February 9, 2023

Binance withdrew its crypto license application before MAS in December 2021 and eventually closed down all operations in the country by February 2022. At the time, the crypto exchange had said that they withdrew their license because they had already invested in a regulated exchange in Singapore, and applying for a second license was “redundant.”

However, a report published in Bloomberg suggested that the crypto exchange couldn’t meet regulators' standard of anti-money laundering measures.

Hodlnaut founders propose selling the firm instead of liquidation

March 1, 2023 Coin Telegraph

Coin Telegraph

Despite Hodlnaut creditors insisting on the firm’s liquidation, the founders keep trying to save the business and sell it to potential investors.

The founders of the troubled cryptocurrency lender Hodlnaut are trying to save the business despite creditors insisting on its liquidation.

On Feb. 28, Hodlnaut’s interim judicial managers released the sixth affidavit of Hodlnaut co-founder Simon Lee reportedly stating the company’s founders proposed selling the business as a better option for creditors than liquidating the firm.

According to a report by Bloomberg, Lee said that he and Hodlnaut’s other co-founder Zhu Juntao have reached out to a number of “potential white knight investors.”

Lee reportedly wrote that Hodlnaut co-founders are confident the company’s user base “can be acquired and on-boarded on digital-asset platforms owned or affiliated to such investors.” He declared that such a business transaction would “maximize” value for creditors.

The affidavit further reaffirms Hodlnaut’s willingness to to sell the firm as the company was working with several potential investors to sell its business and other assets. A number of potential buyers reportedly inquired about purchasing Hodlnaut and its claims against the collapsed crypto exchange FTX as of early February.

The news comes shortly after key Hodlnaut creditors, including Algorand Foundation, in January rejected a restructuring plan offer allowing the current directors to oversee the firm’s operations during the restructuring phase. The creditors argued that the restructuring would do no help and it was in their best interest to liquidate the firm’s remaining assets.

As of December 2022, Hodlnaut Group owed a total of $160.3 million — or 62% of outstanding debt — to companies and entities like Algorand, Samtrade Custodian, S.A.M. Fintech and Jean-Marc Tremeaux.

Once a major crypto lending platform, Hodlnaut was forced to suspend services in August 2022 due to a lack of liquidity triggered by the bear market in 2022. Hodlnaut’s operations were further breached by the firm’s significant exposure to the collapsed FTX exchange, with the firm having more than 500 Bitcoin (BTC) stuck on Sam Bankman-Fried’s crypto exchange.

The news comes amid another troubled crypto lender, Voyager, announcing on Feb. 28 that customers voted for a restructuring plan with Binance’s United States-based business, Binance.US. In December, Binance.US disclosed an agreement to buy Voyager’s assets for $1.02 billion.

Sony and Astar Network Launch Web3 Incubation Program for NFT and DAO-Focused Projects

February 19, 2023 Bitcoin.com

DBS Bank to offer cryptocurrency trading in Hong Kong

February 13, 2023 Coin Telegraph

Coin Telegraph

As Hong Kong has been opening up to crypto, major financial institutions like DBS Group are targeting new crypto services in the Chinese territory.

Singapore state-owned megabank DBS Group is planning to expand its cryptocurrency services to Hong Kong as the Chinese territory pushes to become a digital asset hub.

DBS Bank plans to apply for a license to allow it to offer crypto trading services to Hong Kong customers, Bloomberg reported on Feb. 13.

“We are planning to apply for a license in Hong Kong so that the bank could sell digital assets to our Hong Kong customers,” DBS Bank Hong Kong CEO Sebastian Paredes said.

Paredes noted that DBS welcomes new crypto-related policies in Hong Kong, and is also “very sensitive” to the risks associated with digital assets. The bank is willing to become one of the first lenders offering crypto in Hong Kong once the regulations are fully clear and DBS “understands exactly the framework,” he added.

DBS Bank made a massive move into the cryptocurrency industry a few years ago, launching its institutional crypto exchange in Singapore in late 2020. The company has also been working to expand its crypto platform to retail investors and applying decentralized finance technology to joint projects with Singapore’s central bank.

The news comes amid DBS announcing that its net profit rose 20% to record 8.19 billion Singaporean dollars (SGD), or $6.7 billion, in 2022. Total income increased 16% to 16.5 billion SGD ($12.4 billion), crossing 16 billion SGD for the first time in history.

DBS Bank's plans to expand to Hong Kong come amid China’s special administrative region continuing to reaffirm its pro-crypto stance. In January, Hong Kong’s financial secretary Paul Chan declared that the Hong Kong government is open to collaboration with crypto and fintech startups in 2023. The official also said that a lot of industry firms expressed willingness to expand operations in Hong Kong or to go public on local exchanges.

As previously reported, Hong Kong lawmakers passed legislation to set up a licensing system for virtual asset service providers in December 2022. The new regulatory framework is designed to provide the same degree of market recognition to crypto exchanges as the one that is currently applicable to traditional financial institutions.

While Hong Kong authorities have been opening up to crypto recently, Singapore has taken a more stringent approach to the crypto industry in the aftermath of major industry failures in 2022. In October, the Monetary Authority of Singapore proposed to ban all forms of cryptocurrency credit following the bankruptcy of the Singaporean crypto hedge fund Three Arrows Capital.

3AC founder has ‘chosen to ignore his duties’ by not responding to subpoena, say bankruptcy lawyers

February 8, 2023 Coin Telegraph

Bankruptcy

According to the filing, Kyle Davies was “without question” aware of the subpoena posted to Twitter, citing the 3AC founder's online activity and attempts to raise funds for GTX.

Three Arrows Capital founder Kyle Davies has not responded to a subpoena issued over Twitter aiming to gather information related to the firm’s assets.

In a Feb. 7 filing with United States Bankruptcy Court in the Southern District of New York, lawyers with the Latham & Watkins firm representing 3AC liquidators said Davies had “chosen to ignore his duties to Three Arrows” by failing to comply with the online subpoena. Courts in Singapore and the U.S. previously authorized the use of Twitter to issue subpoenas due to the whereabouts of 3AC founders Davies and Su Zhu being unconfirmed while their social media presence remained active.

The subpoena, which was tweeted to a newly created account on Jan. 5, ordered Davies to provide the 3AC liquidators with documents related to accessing account information, including seed phrases and private keys. In addition, the court told the 3AC founder to include details on accounts at centralized or decentralized exchanges and other assets.

“Under the terms of the Subpoena Order and the Subpoena, Mr. Davies was required to respond by electronic production to counsel for the Foreign Representatives by January 26, 2023,” said the filing. “He did not.”

@KyleLDavies jpg copies of the subpoena are attached to this tweet by way of service. An unredacted copy of the subpoena was served via email and can be provided upon request. pic.twitter.com/XAYzQ4Oveo
— 3ACLiquidation (@3ACLiq) January 5, 2023

According to the filing, Davies may have based in Indonesia, but was making himself available for interviews and was “without question” aware of the subpoena posted to Twitter:

“Mr. Davies has been active on social media, having ‘tweeted’ or ‘retweeted’ dozens of times on Twitter. Shamelessly, while ducking his obligations to his failed company, Mr. Davies has been recently active in an effort to raise tens of millions to start a new crypto exchange called ‘GTX.’”

Bankruptcy Judge Martin Glenn granted a motion aimed at compelling Davies to respond to the online subpoena. According to the judge, the 3AC founder will have until March 16 to respond by providing documents related to the bankruptcy case. In addition, the filing included an order from a British Virgin Islands court compelling Davies to provide documents and appear in a March 14 virtual hearing.

3AC declared bankruptcy in July 2022 shortly before Davies and Zhu largely disappeared from the public spotlight. The Singapore-based crypto hedge fund had at one point managed more than $10 billion worth of assets.

3AC Co-Founder Kyle Davies Fails to Respond to Liquidators’ Subpoena Despite Twitter Delivery

February 8, 2023 Bitcoin.com

Singapore

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