Investment Learning

March 25, 2024

SEC Labels Terra Labs as 'Fraudulent Empire' in Ongoing Civil Trial

According to Cointelegraph: The SEC has commenced its civil trial against Terraform Labs, portraying the company as a 'house of cards' that led to investors losing significantly. The trial kick-started on March 25, following a lawsuit filed by the SEC in February 2023 against Terra and its co-founder, Do Kwon, for allegedly orchestrating a multi-billion dollar crypto asset securities fraud. Do Kwon did not appear in the courtroom on trial day one. Source: Reuters The SEC's allegation revolves around the supposed misleading of investors about the stability of TerraUSD (UST), an algorithmic stablecoin. Following its depegging from the U.S. dollar, Terra and other tokens faced a major dip, contributing to a significant market downturn in 2022 that resulted in multiple company bankruptcies. Originally slated to begin in January, the trial was delayed to March, awaiting Do Kwon's defense in person. Judge Jed Rakoff previously ruled in favor of the SEC over Terra's handling of unregistered securities and in favor of Kwon and his platform for offering and selling security-based swaps in December 2023. The Terraform trial marks one of many anticipated legal confrontations in the crypto sphere in 2024. Sam Bankman-Fried, FTX's former CEO, is set to be sentenced following his conviction on seven felony charges on March 28.

March 25, 2024

EU Not Banning Self-Hosted Cryptocurrency Wallets, Says Circle Policy Director

According to Foresight News, Circle's EU Strategic Policy Director, Patrick Hansen, has confirmed that the European Union has not banned self-hosted cryptocurrency wallets or trading. There is no such prohibition in place. However, using non-KYC self-hosted wallets for encrypted payments, such as to merchants, will be more difficult, depending on the merchant's setup. Previously, comments made by a member of the European Parliament were misinterpreted when confirming the approval of new EU anti-money laundering regulations (AMLR).

March 25, 2024

EU Financial Markets Supervisor Publishes First Report on MiCA Regulation

According to CoinDesk, the European Securities and Markets Authority (ESMA) has published the first in a series of final reports on rules under the European Union's landmark Markets in Crypto Assets (MiCA) regulation. The report, which follows a consultation last year, includes proposals on information the regulator will require from firms for authorization under MiCA. It also outlines requirements for firms to establish intent to provide crypto services and intent to acquire crypto assets, as well as how service providers should address complaints. The ESMA submitted the report to the European Commission, the executive arm of the 27-member bloc, to be adopted and says it 'will provide further advice and technical guidance in this area if requested.' ESMA's third consultation package seeks public comment on proposed rules covering the detection and reporting of suspected market abuse in crypto assets, guidelines on policies and procedures for crypto-asset transfer services, and other measures until June 25. The European Banking Authority (EBA) has been consulting alongside ESMA on measures under MiCA since the package's finalization in 2023. MiCA rules for stablecoins are set to take effect in July, and the entire package will be implemented by all member states in December. MiCA regulates crypto issuers and service providers that want to operate in the EU, and allows for a single license that lets firms offer services in all member states.

March 25, 2024

US Regulators to Hear Terra and Co-founder Do Kwon Case

According to Foresight News, US regulators in Manhattan will hear the case against Terra and its co-founder Do Kwon on Monday. Do Kwon has been transferred to a foreigner 'reception center' in Montenegro since March 23, awaiting a final extradition decision, and will be absent from the trial. The US Securities and Exchange Commission (SEC) accuses Do Kwon of misleading investors about the stability of TerraUSD in 2021. Federal prosecutors in New York also charge Do Kwon with fraud and are seeking to extradite him to the United States.

March 25, 2024

Ripple vs. SEC Legal Battle Nears Trial Phase as Joint Letter Filed

According to CryptoPotato, the legal battle between Ripple and the US Securities and Exchange Commission (SEC) is nearing its trial phase, scheduled for April 23. Prior to the trial, both parties must comply with necessary court requirements. American lawyer James Filan revealed that the regulator filed its opening remedies-related brief and supporting documents under seal. The redacted version of the data will be presented no later than March 26. Initially, the SEC had to file its brief with respect to remedies by March 13, but it was granted an extension on the deadline. Ripple’s opposition letter should come no later than April 22, according to the magistrates’ latest ruling. Despite their differences, Ripple and the SEC recently filed a joint letter seeking the authorities’ approval to govern sealing issues relating to the upcoming remedies-related briefing. The document proposes a schedule for redactions soon after the reply briefs are filed, allowing sufficient time for the parties to meet and confer. The possible resolution of the case is one factor that could propel a price rally for XRP, in the event of a Ripple victory. The outcome of the trial will be closely watched by investors and the cryptocurrency community.

March 25, 2024

Binance and Taiwan’s High Prosecutors Office Discuss Expanding Cooperation in Combating Crime

Richard Teng, the CEO of Binance, led a delegation from Binance that met with Chief Prosecutor Chang, Tou-Hui of Taiwan's High Prosecutor's Office on March 22. The parties engaged in profound discussions, specifically centered around crime prevention in the digital assets space and potential expansion of collaboration in this area. A track record of successful cooperation already exists between Binance and Taiwan's law enforcement agencies. As part of its comprehensive global law enforcement training program, Binance has so far rolled out training courses to over 10 various units across Taiwan, having in excess of 1,000 law enforcement officers participate. During this meeting, both Binance representatives and Taiwanese officials considered methodologies to further deepen cooperation combating illegal activities to maintain the integrity of the financial environment. Binance CEO, Richard Teng, emphasized one of his top three commitments, endured since his appointment to the role, was to perpetually work alongside regulators. He showed appreciation towards Taiwan's law enforcement agencies for their substantial support and emphasized his fulfillment of that commitment. In response to the meeting, Chief Prosecutor Chang, Tou-Hui expressed gratitude towards Binance for their ongoing support and assistance towards Taiwan's law enforcement agencies. Damien Ho, a member of Binance's APAC regional team, underscored the primary role of collaboration between the public and private sectors in preventing and battling illicit activities in Web3. Ho expressed his optimistic outlook towards fortifying cooperation with Taiwan's law enforcement agencies in the future. Binance remains committed to not only continuing its contributions to secure user assets but also to establish a safer and more dependable virtual assets ecosystem.

March 22, 2024

LayerZero Labs CEO Accuses 3AC Co-founder of Deceptive Practices

According to Foresight News, LayerZero Labs CEO Bryan Pellegrino has accused 3AC co-founder Kyle Davies of offering higher interest rates to entice LayerZero to invest all its funds in 3AC, despite 3AC being insolvent at the time of the transaction. Pellegrino made these allegations in a tweet, raising concerns about the business practices of 3AC and its co-founder.

March 21, 2024

Estonian Government Approves Cryptocurrency Service Providers Regulation Bill

According to PANews, the Estonian government has approved a bill to regulate cryptocurrency service providers, which now requires a parliamentary vote. Under the proposed legislation, crypto service providers will be regulated by the Financial Supervisory Authority (FSA). Currently, these providers are registered with the Financial Intelligence Unit (FIU) and must comply with anti-money laundering (AML) rules. The FSA will begin issuing licenses in 2025, and FIU license holders must apply for an FSA license before the end of that year. The new bill will bring Estonia in line with the European Union's crypto asset market (MiCA) regulations.

March 21, 2024

Terra Co-Founder Do Kwon's Extradition to South Korea Halted by Montenegro's Top Prosecutor

According to CoinDesk, Terra co-founder Do Kwon's extradition to South Korea has been halted following a legal challenge from the top prosecutor of Montenegro. Kwon has been in Montenegrin custody since March 2023, when he was arrested and jailed for using fake Costa Rican documents in traveling to Dubai. Montenegrin authorities are weighing competing extradition requests for Kwon from his native South Korea and the U.S., where he also faces criminal charges. Kwon had allegedly been on the run for months following the $40 billion implosion of Terraform Labs and the Terra ecosystem in May 2022. Terraform Labs co-founder Do Kwon's pending extradition to South Korea has apparently been put on ice following a legal challenge issued Thursday by Montenegro's top prosecutor. Montenegro's Office of the Supreme State Prosecutor said that the High Court's decision to extradite Kwon to his native South Korea instead of to the U.S. – as well as the appellate court's subsequent confirmation – was done via 'abbreviated proceedings' that exceeded the limits of its powers, according to a translated statement published Thursday. A decision on permission for Kwon's extradition is to be made solely by the country's minister of justice, according to the statement. Kwon was not directly named in the statement, which simply refers to 'a citizen of the Republic of South Korea.' Montenegro was inadvertently placed at the center of a tug-of-war between the U.S. and South Korea a year ago, when Kwon and his colleague, Han Chang-joon, were arrested and jailed for attempting to use fake Costa Rican passports en route to Dubai. Kwon's arrest came six months after Interpol issued a 'red notice' for his arrest and 10 months after the $40 billion implosion of his company, Terraform Labs, and the Terra ecosystem. Kwon faces criminal charges in both the U.S. and South Korea, but he's fought extradition since his arrest, appealing several court decisions with varying degrees of success. Han was extradited to South Korea in February, and Kwon looked poised to follow. His Montenegrin lawyer, Goran Rodic, told CoinDesk Kwon was likely to be extradited to South Korea after March 23, but that timeline – as well as Kwon's ultimate destination – is once again hazy. This is a developing story and will be updated.

March 20, 2024

SEC Investigates Ethereum Classification as Security

According to PANews, the US Securities and Exchange Commission (SEC) is taking legal action to classify Ethereum as a security. This action involves issuing subpoenas to US companies, requiring them to provide all documents and financial records related to the Ethereum Foundation. The investigation began in September 2022 when the Ethereum blockchain transitioned to a new governance model called 'Proof of Stake'. Although the SEC has not commented on the matter, this move appears to be a significant review of the Switzerland-based Ethereum Foundation. This action could have far-reaching implications for the cryptocurrency industry, particularly in discussions about whether crypto assets are considered securities.