Crypto Platform Takedown: Inside the $60 Billion Terraform Labs Scandal
Do Kwon, the founder of Terraform Labs, allegedly transferred 9 billion won ($7 million) to South Korean law firm Kim & Chang just before the collapse of the crypto platform in May 2022. South Korean prosecutors have confirmed the report’s accuracy. Kim & Chang has not provided details about the specific case but stated that they conducted their services as usual and received payment for them. Attempts to contact the prosecutors’ office and Kim & Chang for comment have been unsuccessful so far. Kwon was arrested in Montenegro recently, and both South Korea and the United States are seeking his extradition. The CEO of Terraform Labs is facing criminal charges in both countries after the collapse of his company’s $60 billion crypto ecosystem, which has had significant repercussions for the global crypto industry. More here.
Crypto Lender Amber Group Evaluating Sale of Japanese Unit
According to Annabelle Huang, Managing Partner of crypto lender Amber Group, the company is considering options for its Japanese unit, which may include a possible sale. Huang revealed that the firm’s evaluation of the Japan operation is part of a strategic decision to shift its focus towards institutional rather than a retail business. She added that although Japan is a “very high-quality market, regulations are strict,” and there is no announcement at the moment about a deal. Amber Group, which acquired Japanese crypto exchange DeCurret Inc. in 2022, plans to apply for a virtual asset trading platform license in Hong Kong. This move comes as the city aims to create a digital-asset hub, develop virtual-asset regulations that will encourage growth, and protect investors. Huang said that Amber is “preparing for our license application,” and the regulatory scene in Hong Kong has been very bullish for them. Details here.
Ether Withdrawals Surpass 1 Million Tokens Despite Shapella Upgrade Fears
On Sunday night, the number of Ether (ETH) withdrawals surpassed 1 million tokens despite the coin reaching an 11-month high, which contradicts the fears of those who thought the recently implemented Shapella upgrade would have a negative impact on Ethereum’s native token. According to data from the Beacon Chain tracker, the tokens were withdrawn from almost 477,805 transactions that occurred every few seconds. The Shapella upgrade, which combined two major Ethereum network upgrades that occurred simultaneously on April 12th, now permits investors to withdraw their staked ether on the Ethereum blockchain whenever they want, which was previously impossible. Some analysts were worried that this event would have a negative effect on the value of ether. Read More.
Celebrities Under Fire: Shaq, Tom Brady, and Steph Curry Named in Massive Fraudulent Scheme Lawsuit
According to a tweet from the Moskowitz law firm, basketball legend Shaquille O’Neal has finally been served in a class-action lawsuit against FTX founder Sam Bankman-Fried. The lawsuit was filed by FTX customer Edwin Garrison, and O’Neal was reportedly “hiding and driving away from our process servers for the past three months” before finally being served outside his Atlanta home. The lawyers even tried to reach O’Neal on social media, leaving comments on his Twitter and Instagram accounts, but were unsuccessful. The lawyers are taking the case seriously and have asked O’Neal not to erase any security tapes from his home, which recorded the moment he was served. The case is being handled by attorneys Adam Moskowitz and David Boies, and CoinDesk has reached out to them for additional comments. Full report here.
SEC Charges Bittrex Crypto Exchange for Violating Federal Laws
The Securities and Exchange Commission (SEC) has charged cryptocurrency trading platform Bittrex, Inc., its co-founder and former CEO William Shihara, and Bittrex’s foreign affiliate, Bittrex Global GmbH, with operating an unregistered national securities exchange, broker, and clearing agency. The SEC alleges that Bittrex earned at least $1.3 billion in revenue from transaction fees between 2017 and 2022 while failing to register any of these activities with the Commission. According to the SEC’s complaint, Bittrex has facilitated the buying and selling of crypto assets offered and sold as securities since 2014. Bittrex and Shihara allegedly coordinated with issuers to remove “problematic statements” from public channels that could have led to regulatory scrutiny. These statements included mentions of “price predictions,” “expectations of profit,” and other “investment-related terms.” More here.
Kyber Network Warns of Security Vulnerability in Elastic Platform, Warns Users to Withdraw Funds
Kyber Network, a popular decentralized finance (DeFi) protocol, has warned users of a possible security vulnerability in its Elastic platform, urging them to withdraw their funds as a precautionary measure. The team assured users that investigations are ongoing and no user funds have been lost. In the words of the Kyber team: “We have identified a potential vulnerability and strongly advise all Liquidity Providers to withdraw your funds on Elastic as soon as possible…Investigations are ongoing, and no user funds are lost.” Elastic is a decentralized exchange platform that enables users to swap tokens and liquidity providers to deposit tokens and earn a yield on their deposits. As a precaution, the Kyber team has paused users from adding liquidity to the platform. More here.
Grayscale’s Solana Trust Goes Public on OTC Markets with GSOL Ticker
Grayscale has announced the public trading of its Solana Trust under the ticker symbol GSOL, making it the latest addition to the 15 other cryptocurrency investment products the company offers on OTC Markets. With 304,427 outstanding shares as of Friday, investors with access to US securities can “buy and sell freely-tradable GSOL shares through their investment accounts,” said Grayscale. The objective of GSOL is to be linked to Solana to allow investors to gain exposure to the digital asset without owning it directly. This strategy is similar to Grayscale’s bitcoin and ether trusts, GBTC and ETHE respectively, where accredited investors with bitcoin and ether give crypto to Grayscale in exchange for shares in the trusts, while retail investors can acquire stock through public markets. Read More
Regulatory Crackdown: Bittrex’s Internal Communications Reveal Unlawful Activities
While Bittrex’s co-founder and staff claimed they were dealing with “regulatory ambiguity,” they were well aware of their violation of securities laws, according to the Securities and Exchange Commission (SEC). In a complaint filed against the company on Monday, the SEC presents evidence in the form of internal messages that they say support these allegations. The complaint refers to internal communications that discuss the process of removing tokens and erasing promotional statements, referred to as “scrubbing” within the company. This was allegedly done to hide the fact that Bittrex was involved in selling tokens they knew might be considered securities under U.S. law. Read More.
Canada Tightens Crypto Regulations: Impact on Trading Platforms and Industry Players
Recent efforts by Canada to enforce stricter regulations on cryptocurrency businesses indicate that American regulators are not alone in their pursuit to regulate the asset class, particularly after last year’s turbulence. In February, Canadian securities regulators issued a 30-day ultimatum for unlicensed crypto trading platforms operating in the nation to agree to a so-called pre-registration commitment. These firms must now adhere to more stringent rules on segregating customer assets and are forbidden from providing margin or leverage to Canadian users.The updated regulations are forcing companies in the sector to decide whether to comply and remain in Canada or withdraw their operations. Read More
Cryptocurrency Update: Bitcoin Struggles to Maintain $30,000, Altcoins Show Mixed Performance
The recent surge of Bitcoin (BTC) above $30,000 appears to have temporarily stalled. The leading cryptocurrency by market cap was trading around $29,500, experiencing a 2.6% decrease over the past day. Bitcoin’s value started to decline on Sunday, hitting a low of $29,292 before making a slight recovery, as per CoinDesk data. Coinglass data reveals that traders who speculated on price changes have liquidated more than $32 million in BTC long positions since Sunday evening, compared to just $1 million in BTC short positions. Such long squeezes typically drive prices downward. Meanwhile, Ether (ETH) was trading around $2,084 on Monday, marking a 0.7% drop in the last 24 hours, but remaining stable after the significant software upgrade on the Ethereum blockchain last week. Among other altcoins, Avalanche’s AVAX token saw a recent increase of over 7%, reaching $20.70. Decentralized exchange dYdX’s DYDX token, which focuses on perpetuals, climbed by 5% to trade above $3. Crypto-related stocks, which had experienced a surge late last week, also fell on Monday. Shares of exchange Coinbase (COIN) and bitcoin mining company Marathon Digital Holdings (MARA) both declined by more than 3%. Business software firm MicroStrategy (MSTR), which holds a substantial amount of bitcoin, saw its stock value decrease by 5%.