Do Kwon, the founder of Terraform Labs, has denied allegations of forging travel documentation and disassociated himself from any financial connections with Milojko Spajić, the leader of the Europe Now party.
In a recent hearing at the Montenegrin Basic Court, Kwon claimed that he was unaware of the alleged forgery of his passport and shifted the blame onto a Chinese-named agency.
According to a report from South Korean news outlet Segye Ilbo on June 17, Kwon stated that he had obtained his purportedly forged passports, including a Costa Rican one, through third-party “agencies.”
He explained that a Singaporean agency, recommended by a friend, facilitated his acquisition of the Costa Rican passport, while another agency was responsible for the Belgian passport.
Kwon maintained that he had been using his Costa Rican passport for a long time and had no reason to doubt its authenticity.
When pressed for details about the agency involved in obtaining the passports, Kwon claimed he could not recall the specifics but mentioned that its name was in Chinese characters.
During the court proceedings, Kwon was questioned alongside his former colleague, Han Chong-joon, who served as the Chief Financial Officer of Terraform Labs. Both individuals faced allegations of passport forgery and were also investigated for potential financial donations to Milojko Spajić. Kwon’s lawyers vehemently denied any financial connections between their client and Spajić, refuting the claims made in a letter that Kwon had supposedly sent to Montenegrin officials ahead of the country’s recent elections.
Following the hearing, Judge Ivana Becić announced that a verdict on the forgery charges would be delivered on June 19. Kwon will remain in extradition custody for a maximum of six months while the local court considers South Korea’s extradition request.
Kwon and Chong-joon were initially arrested by local authorities on March 23 after an attempt to leave Montenegro on a private flight to Dubai using falsified passports.
Although their lawyers initially secured bail approval in the amount of 400,000 euros ($436,000), this decision was later overturned on appeal.
However, on June 5, their appeal was dismissed, and bail was granted for both individuals. They are now subject to close monitoring by local police, and any violation of the approved conditions or departure from their residence could result in the forfeiture of their bail.
The collapse of Terraform Labs’ Terra ecosystem in May 2022 led to estimated losses of up to $40 billion, further adding to the controversies surrounding the company and its founder, Do Kwon.
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SEC addresses enforcement action against Binance and Coinbase
Coinbase, a leading cryptocurrency exchange, has criticized the United States Securities and Exchange Commission (SEC) for its evasive responses during their ongoing legal dispute.
In a letter filed on June 17th with the U.S. Court of Appeals, Coinbase’s lawyers expressed their dissatisfaction with the SEC’s failure to address Coinbase’s rulemaking petition, which urges the SEC to establish a regulatory framework for digital assets.
The letter from Coinbase accused the SEC of avoiding direct answers and instead reiterating talking points when asked to address the inconsistency between its litigating position and its actions and statements elsewhere.
This response was prompted by the SEC’s request on June 13th for an additional 120 days to respond to Coinbase’s rulemaking petition.
Coinbase further claimed that the SEC is unwilling to provide updates on its decision to the Court, demonstrating its reluctance by expressing discontent even when ordered to do so.
The prolonged silence from the SEC and the resulting delays in decision-making, according to Coinbase, continue to burden the crypto industry. Furthermore, Coinbase expressed concerns that SEC Chair Gary Gensler’s actions are leading to irreparable damage to both a U.S. public company and the entire industry.
Coinbase’s Chief Legal Officer, Paul Grewal, took to Twitter on June 17th, highlighting the government’s uncommon defiance of a direct question from a federal court.
Grewal expressed hope that the court would issue a writ of mandamus, compelling the SEC to fulfill its official duties under the law, considering that Coinbase’s petition had been rejected.
Additionally, Coinbase has requested that the court impose a deadline of 60 days or less, commencing from June 13th, as an alternative to the SEC’s proposed 120-day extension.
In a separate case on June 6th, the SEC filed a lawsuit against Coinbase, alleging that the exchange had violated several securities regulations, primarily by allegedly offering cryptocurrencies that the regulator considers unregistered securities.
Coinbase’s criticism of the SEC’s lack of transparency and failure to address their concerns reflects the growing tensions between cryptocurrency companies and regulatory authorities.
As the crypto industry continues to evolve, the outcome of these legal battles will have significant implications for the future of digital assets in the United States.
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SEC addresses enforcement action against Binance and Coinbase
Gurbir Grewal, the director of the Securities and Exchange Commission (SEC) division of enforcement in the United States, has acknowledged that recent enforcement actions against several cryptocurrency firms were necessitated by the industry’s widespread noncompliance.
This move has drawn criticism from numerous lawmakers and leaders within the crypto sector.
During an event held in New York by law firm Lowenstein Sandler and Rutgers University Law School, Grewal spoke about the SEC’s approach to the crypto space.
The event also featured Faryar Shirzad, the chief policy officer of Coinbase. According to a Reuters report on June 16, Grewal explained that the SEC had previously taken a thoughtful and incremental approach to its actions in the crypto industry.
However, this method failed to address the issue of unregistered securities offerings that the regulator sought to tackle.
Grewal emphasized that the crypto industry seemed to have been built on a culture of noncompliance.
Even if the SEC were to devise a tailor-made set of rules, compliance would still be lacking within the industry. Consequently, the SEC was compelled to alter its strategies in response to this prevailing trend.
The enforcement director’s remarks shed light on the rationale behind the recent enforcement actions taken by the SEC against various crypto firms.
These actions have sparked controversy and drawn criticism from both lawmakers and industry leaders. The SEC’s shift in strategies indicates a growing concern within the regulatory body regarding the extent of noncompliance within the crypto industry.
By acknowledging the need for a change in approach, Grewal’s comments suggest that the SEC aims to adapt its enforcement efforts to effectively address the issue of unregistered securities offerings in the crypto sector.
It remains to be seen how the SEC will navigate this challenge and whether its revised strategies will yield the desired outcomes.
As the crypto industry continues to evolve, regulatory bodies like the SEC are faced with the task of striking a balance between fostering innovation and safeguarding investors.
The enforcement actions taken by the SEC reflect an ongoing effort to establish clearer regulatory frameworks and promote compliance within the crypto space.
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Arbitrum governance token’s (ARB) price set for reversal after airdrop
Ripple CEO Brad Garlinghouse has emphasized that the resolution of Ripple’s legal dispute with the United States Securities and Exchange Commission (SEC) does not mark the end of the fight for regulatory clarity in the industry.
While the case is nearing its conclusion, Garlinghouse asserts that the struggle for clear regulations must persist.
Following the unsealing of the Hinman Documents on June 13 as part of the ongoing lawsuit, Garlinghouse took to Twitter to share his thoughts on the timeline of the case and express his frustration with the SEC.
In a video posted on June 17, he highlighted that the newly revealed documents indicate that the SEC intentionally created confusion regarding the rules and exploited that confusion for enforcement purposes.
Garlinghouse did not hold back in his criticism of the SEC’s conduct, characterizing it as a clear example of acting in “bad faith, plain and simple.”
According to him, this questionable behavior was evident right from the start of the legal proceedings initiated by the SEC in December 2020.
He expressed his dismay at the timing of the lawsuit, which was filed just “days before Christmas,” likening it to a cruel act akin to the Grinch stealing joy during the holiday season.
While the Ripple case might soon reach a conclusion, Garlinghouse stressed that the fight for regulatory clarity and fair treatment for the industry is far from over. He believes that continued efforts are necessary to ensure a transparent and predictable regulatory environment, not only for Ripple but for other companies operating in the cryptocurrency and blockchain space.
Garlinghouse’s remarks highlight the importance of addressing regulatory ambiguity and the need for government agencies to act in good faith when engaging with innovative technologies.
His message resonates with many in the industry who seek a clear framework that allows for responsible innovation and fosters growth while ensuring the protection of investors and consumers.
As Ripple’s legal battle draws nearer to its end, Garlinghouse’s call to action serves as a reminder that the fight for regulatory clarity must persist, urging industry participants, policymakers, and regulators to work together to establish a fair and transparent regulatory landscape for cryptocurrencies and blockchain technology.
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Binance, one of the world’s largest cryptocurrency exchanges, has resolved a long-standing dispute with the US Securities and Exchange Commission (SEC), according to CEO Changpeng “CZ” Zhao.
The resolution brings an end to a period of regulatory uncertainty and tension that had gripped the company.
Expressing his relief on Twitter, CZ considered the SEC’s request for emergency relief unnecessary and welcomed the mutually agreed resolution. He believes the settlement will pave the way for Binance’s future growth without hindrance.
Judge Amy Berman Jackson from the U.S. District Court for the District of Columbia gave her nod to the “Proposed Stipulation and Consent Order” reached between Binance.
Binance.US, and the SEC on June 18th. This outcome is seen as a significant milestone in the crypto industry, showcasing the importance of compliance with regulatory requirements.
Under the terms of the consent order, Binance must “repatriate” all fiat and cryptocurrency assets associated with Binance.US by a specific date outlined in the court ruling.
The agreement also imposes restrictions on Binance’s global executives, preventing them from accessing the private keys of all wallets, including both cold and hot wallets.
This development enables Binance to focus on its operations and expansion while ensuring it adheres to all regulatory requirements. CZ’s reaction suggests optimism for the future, viewing this regulatory clarity as a positive step forward for Binance and the broader cryptocurrency industry.
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Arbitrum governance token’s (ARB) price set for reversal after airdrop
Binance, the world’s leading cryptocurrency exchange, is facing further legal troubles as reports suggest that its French arm has been under investigation since early 2022.
According to an article in the French daily, Le Monde, the Judicial Investigation Service of Finance has been conducting a preliminary investigation into Binance in France since February 2022.
The investigation is said to be focused on alleged “aggravated money laundering” and the illegal provision of services to French customers.
The Paris Prosecutor’s Office cited acts of illegal exercise of the function of a service provider on digital assets and participation in investment operations, concealment, and conversion as the basis for the investigation.
Binance is accused of failing to comply with Know Your Customer procedures, which are designed to prevent money laundering activities.
In addition, it has been revealed that Binance operated in France without obtaining the necessary operating license.
Since 2019, crypto exchanges have been required to obtain approval from the Financial Markets Authority (AMF) in order to operate in France.
However, Binance reportedly only received AMF approval in May 2022, despite operating in the country since 2020.
A spokesperson for Binance emphasized that the company cooperates with law enforcement globally and complies with all laws in France. They stated that user information is securely held and provided to government officials only with documented and appropriate justification.
The investigation in France comes shortly after Binance’s subsidiary in the United States, Binance.US, and CEO Changpeng Zhao were hit with 13 charges by the U.S. Securities and Exchange Commission.
These charges further contribute to the legal challenges faced by the global cryptocurrency exchange.
As the investigation unfolds in France, Binance’s compliance with regulatory requirements and its handling of user data will be closely scrutinized.
The outcome of the investigation could have significant implications for Binance’s operations in France and its global reputation.
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The price of the Arbitrum governance token (ARB) could experience a reversal due to positive developments in the Ethereum network and an increase in active users on the Arbitrum platform.
Despite a consistent downturn since the airdrop in late March, the Arbitrum ecosystem has shown signs of healthy growth.
According to a recent report by Nansen, activity on Arbitrum improved after the airdrop and has stabilized at a higher level compared to before the airdrop.
Daily active users, gas fees, and transaction counts have consistently remained higher since April 2023. The number of active users on Arbitrum has also been closing in on Ethereum, surpassing Optimism.
The trading volume on decentralized exchanges (DEXs) based on Arbitrum has seen a noticeable increase after the airdrop, further indicating the platform’s growth.
Additionally, the report reveals that the ARB airdrop recipients accounted for only about 5% of the blockchain’s activity, and Arbitrum has attracted a significant number of new users post-airdrop.
There are several potential catalysts that could drive ARB’s price upward. One such catalyst is the upcoming Ethereum update called Cancun-Deneb (Dencun) scheduled for the second half of 2023.
This update will include EIP-4844 (proto-Danksharding), which aims to reduce transaction fees on Arbitrum, thereby increasing the value proposition of the platform.
Furthermore, the Arbitrum Foundation has decided to pass on the earnings from its sequencer, a component of the layer-2 fees, to the Arbitrum DAO.
The DAO will manage the 3,352 Ether (ETH), equivalent to $5.4 million, earned from the sequencer. This revenue source could potentially generate yields for ARB holders if the community votes to direct the rewards to them.
Nansen’s data suggests that “smart money” and funds that accumulated ARB after the airdrop have not sold their holdings, which is an encouraging sign.
Funding rates for ARB perpetual swap contracts have turned negative, similar to the rest of the crypto market, following lawsuits against major exchanges like Binance and Coinbase by the Securities and Exchange Commission (SEC).
While the ARB/USD pair has been on a downward trend since its launch, there is a possibility of a positive breakout indicated by a descending wedge pattern.
However, if ARB breaks below the support line of the wedge pattern around $0.90, a significant downward move could occur.
Ultimately, the price action of ARB will depend on the upcoming Dencun update on Ethereum and the decisions made by the Arbitrum Foundation regarding revenue distribution.
It is important for readers to conduct their own research and exercise caution when making investment or trading decisions, as this article does not provide investment advice or recommendations.
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Blockchain investigator ZachXBT is facing a lawsuit for libel filed by Jeffrey Huang, who alleges that his reputation was tarnished by false accusations made by ZachXBT. Huang, also known as MachiBigBrother on Twitter, claims that ZachXBT damaged his reputation through unfounded claims of embezzlement.
ZachXBT responded to the lawsuit by dismissing it as baseless and an attempt to suppress free speech. He vowed to fight back against the allegations made against him.
ZachXBT shared a Medium post in a thread, which he claims is the source of the libelous accusations. The article, titled “22,000 ETH Embezzled and Over Ten Projects Failed: The Story of Machi Big Brother (Jeff Huang),” accused Huang of being involved in the launch of multiple failed projects and claimed that he drained funds from the treasury of Formosa Financial, a treasury management service.
The article alleged that withdrawals of 11,000 ETH each were made from the Formosa Financial treasury wallet in June 2018. It further claimed that the funds were sent to various other wallet accounts, including one associated with the Ethereum Name Service domain harrisonhuang.eth. ZachXBT connected these addresses to Jeff Huang/Mithril based on blockchain data, implicating Huang in the funds’ depletion.
On June 15, a complaint was filed on behalf of Jeffrey Huang in the United States District Court for the Western District of Texas, Austin Division. Huang’s attorney argued that Huang did not embezzle funds from Formosa Financial and did not have direct control over the project’s funds, making embezzlement impossible. The complaint also suggested that the founders of the project were the likely culprits behind the fund transfers.
The lawsuit also claimed that ZachXBT published the article for monetary gain, as he allegedly earns money from donations for his work as an on-chain sleuth.
ZachXBT took to Twitter on June 16 to deny these allegations and expressed disappointment at the attempt to silence him. He stated that he knew such a situation might arise because speaking the truth can sometimes lead to dislike from certain individuals.
ZachXBT has previously exposed various crypto scams and exploits, including identifying Twitter phishing scams that drained $1 million in crypto and revealing a $35 million loss from an exploit of the Atomic Wallet app.
Blockchain investigator ZachXBT is being sued for libel by Jeffrey Huang, who denies the allegations of embezzlement made against him. The case raises questions about the accuracy of the accusations and the motivations behind the publication of the article.
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The United States Securities and Exchange Commission (SEC) has opposed Dentons’ motion to dismiss the lawsuit brought by Terraform Labs and Do Kwon, arguing that the additional documents provided by Dentons do not provide sufficient grounds for dismissing the case.
Dentons, the law firm representing Terraform Labs and Do Kwon, had submitted supplementary documents during a court hearing on June 15 to support their motion to dismiss the SEC lawsuit. However, the SEC’s lawyers claimed that the documents, including a Binance.US transcript and internal SEC emails, were irrelevant to the current case. They emphasized that the Howey test clearly defines the criteria for an “investment contract” and insisted that TerraUSD (UST) should be classified as a security.
The hearing aimed to determine whether the digital assets developed by Terraform Labs should be classified as securities under the definition of an “investment contract.” Dentons argued that the algorithmic stablecoin UST should not be considered a security, emphasizing its practical purpose rather than an investment contract.
In support of their motion to dismiss, Dentons submitted additional documents, such as a U.S. House Financial Services Committee hearing on digital asset regulation and stablecoin issuance, the SEC’s request for a restraining order against Binance.US, and the Hinman emails from the SEC vs. Ripple lawsuit.
The defense lawyers highlighted a perceived “regulatory gap” in the classification of crypto assets as securities, especially as the U.S. Congress discusses regulatory frameworks for digital assets and stablecoin issuance.
They further contended that the SEC was going beyond the scope of securities laws by relying on internal emails related to “investment contracts” to determine the security status.
Judge Jed Rakoff, overseeing the case, announced that a decision on the motion to dismiss would be made by July 14.
It is worth noting that Dentons previously represented Kwon in challenging the SEC’s subpoena during the investigation of the Mirror Protocol in 2021 and a class-action lawsuit in the Singapore High Court in 2022. The law firm also represents Terraform Labs in other ongoing cases.
In a separate development, the Basic Court in Podgorica, Montenegro, has granted bail to Kwon and former Terra chief technology officer Han Chang-joon. However, Kwon has been placed in extradition custody in Montenegro as the court evaluates South Korea’s extradition request for the Terra founder.
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BlackRock, the world’s largest asset manager, has filed for a bitcoin exchange-traded fund (ETF) in an effort to provide investors with exposure to the cryptocurrency amidst growing regulatory scrutiny.
The iShares Bitcoin Trust, BlackRock’s proposed ETF, will utilize Coinbase Custody as its custodian, as stated in a filing with the U.S. Securities and Exchange Commission (SEC). However, the SEC has yet to approve any applications for spot bitcoin ETFs.
BlackRock had previously launched a spot bitcoin private trust for institutional clients in the United States. This recent move by the asset manager comes at a time when the global cryptocurrency industry is facing increased attention from regulators regarding potential violations of securities laws. In fact, earlier this month, the SEC filed lawsuits against prominent exchanges Coinbase and Binance, which had significant repercussions throughout the digital assets sector.
Joshua Chu, the group chief risk officer at blockchain technology group XBE, Coinllectibles, and Marvion, viewed BlackRock’s filing as a positive development in the pursuit of regulatory approval. The involvement of a reputable and established asset management company like BlackRock indicates the resilience of public interest in cryptocurrencies.
A spot bitcoin ETF would track the underlying market price of bitcoin, enabling investors to gain exposure to the cryptocurrency without directly purchasing it.
Notably, the SEC rejected Grayscale Investment LLC’s application last year to convert its flagship spot Grayscale Bitcoin Trust into an ETF. Grayscale subsequently sued the SEC, claiming arbitrary decision-making, as the regulator had previously approved bitcoin futures ETFs while rejecting spot bitcoin ETF applications. Firms such as Fidelity, Cboe Global Markets, and NYDIG have also had their spot bitcoin ETF proposals rejected by the SEC.
Following the announcement of BlackRock’s ETF filing, bitcoin prices experienced a 2% increase on Thursday, with the cryptocurrency valued at $25,506 on Friday. Year-to-date, bitcoin has seen a 54% surge in value.
Reports of BlackRock’s plans for a bitcoin ETF were initially published by CoinDesk earlier on the same day.
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