GSR Gets on Path Towards Full Regulatory Approval in Singapore

Dispute Embroils Bitget in Legal Battle With Crypto InfluencerBitget, the crypto exchange registered in Seychelles, finds itself entangled in a legal dispute with prominent crypto influencer Evan Luthra.Photo by Tingey Injury Law Firm on UnsplashAccount freezing allegationsThe conflict stems from Luthra’s allegations of account freezing and loss of funds after a token listing incident in March. Luthra has filed a lawsuit against Bitget, accusing the exchange of withholding $200,000 in Tether (USDT) without adequate explanation, while also freezing his account.The legal drama follows Luthra’s involvement with the Reel Star project, where he served as an advisor for the platform which is aimed at creators. As compensation for his collaboration with the project, Luthra received Reel Token (REELT), the project’s utility token.Bitget alleged market manipulationUpon the listing of REELT tokens, Luthra reportedly sold 1.3 million tokens on Bitget. In response, Bitget claims it faced a manipulative attack orchestrated by a group of traders attempting to profit from market manipulation immediately after the token’s listing. This allegedly caused a significant drop in the token’s price, prompting Bitget’s decision to freeze Luthra’s account.Bitget states that it contacted Luthra seeking an explanation for the suspicious trading behavior. Luthra acknowledged the token sale but failed to provide satisfactory reasons for his actions, according to Bitget’s version of events. The exchange maintains that user protection is its foremost priority and that it takes swift action against illegal or fraudulent behaviors.$16 million damages claimLuthra refutes the allegations, asserting his innocence and citing alleged approval from Reel Star’s Co-Founder Navdeep Sharma for his token sale plans. He seeks a substantial $16 million in damages, in addition to the frozen funds. Luthra claims that Bitget unjustly deprived him of his tokens, asserting his status as a fully KYCed user entitled to access his holdings.In the aftermath of the incident, Bitget conducted an investigation and offered a compensation plan for affected clients. Gracy Chen, Bitget’s Managing Director, emphasized the exchange’s commitment to user protection and its actions against illicit activities on its platform. Addressing the matter on Twitter, Chen didn’t hold back in her commentary on Luthra, stating that he “has a history of fraudulent activities,” which she says were exposed by crypto journalist CoffeeZilla.The legal dispute has ignited debates within the crypto community. Supporters of Luthra contend that his case underscores broader issues faced by users of centralized exchanges, shedding light on the need for improved user rights and protection. On the other hand, some argue that Bitget acted appropriately to safeguard its users and the market integrity.CZ brought into the disputeThe legal battle has attracted attention from influential figures in the crypto industry. Against a backdrop of a very public airing of the dispute on Twitter, in a recent tweet Luthra invited Changpeng Zhao (CZ), the CEO of Binance, to respond to Luthra’s claim that Bitget spreads rumors about other exchanges. CZ was having none of it, writing: “You should talk to them, right? We are not a regulator for other exchanges.”The case highlights the intricate challenges surrounding market manipulation and token listings within the crypto space. As it unfolds, the outcome could potentially set a precedent for similar situations involving token listings, market manipulation, and user protection.

Japanese blockchain infrastructure firm Soramitsu has been contracted by the State Bank of Pakistan (SBP) to work on a pilot program for the digital Pakistani rupee. Pakistan originally announced its intention to pursue a central bank digital currency (CBDC) or digital rupee back in 2019. However, unlike other Asian nations such as China, Cambodia and Thailand, it has not taken much action to progress such a digital currency since then.SBP Governor Jameel Ahmad spoke at the Reuters NEXT Asia Summit in Singapore last month, outlining that the South Asian country was moving towards the establishment of a digital rupee and “building up [its] capacity” to launch it, and that a pilot project would be the next step. According to a report published by Nikkei Asia on Aug. 12, that pilot project is now underway.Photo by Hamid Roshaan on UnsplashCBDC specialistSoramitsu already has a wealth of experience in this field. In 2023, it signed a memorandum of understanding with the Laotian central bank to launch a proof-of-concept CBDC project, with the Tokyo-headquartered company going on to play a pivotal role in the issuance of Laos’ Digital Lao Kip.In Cambodia, it partnered with the National Bank of Cambodia to bring about the establishment of Bakong, Cambodia’s CBDC-like payment system. The company is also involved in CBDC projects in Papua New Guinea and the Solomon Islands, while spearheading a project aimed at enabling seamless cross-border payments among Asian countries. Japanese fundingIn the case of Pakistan’s pilot project, Soramitsu’s CBDC platform will facilitate the digital rupee while funding is being provided by the Global South Future-Oriented Co-Creation Project, an initiative from Japan’s Ministry of Economy that seeks to promote the formation of co-creation business models. Infrastructure, such as the internet and power, can be unstable in some parts of Pakistan. Consequently, the proposed CBDC will incorporate the ability for the user to transact with it using their smartphone, even if the phone doesn’t have an active internet connection. Digital transformationMasato Toriya, an associate professor at Tokyo University of Foreign Studies and an expert on Pakistan, outlined the behavioral change that would be required in getting Pakistanis in rural areas to use such a currency. He stated: “Many transactions in rural areas are cash-based, even for wage payments, and the rate of people with bank accounts is low."  However, cash-based systems have significant overheads, and it's thought that a CBDC could reduce such costs considerably. Last month, the Pakistan Institute of Development Economics published an article written by Dr. Ahmed Fraz, an assistant professor of finance with the organization, in which he claimed that the digital rupee pilot project is part of a “profound digital transformation” that Pakistan is moving towards.  Dr. Fraz asserted that a CBDC would enhance financial inclusion in Pakistan through the reduction of transaction fees, digitization of welfare payments and the financial inclusion of millions of unbanked citizens within the formal economy.He added that the digital rupee “is not intended to replace existing payment systems immediately but to complement platforms” and to modernize Pakistan’s financial architecture.

Korea Makes Strides in Establishing the Legal Framework for Security TokensSouth Korea is making significant strides in establishing a legal framework that enables individuals to own and trade fractional shares or portions of real-world assets such as music copyrights, real estate properties, and artworks, through tokenization on blockchain platforms.Photo by Tingey Injury Law Firm on UnsplashAmendments to two actsAccording to a report by local news outlet Newsis, the ruling People Power Party (PPP) and the Financial Services Commission (FSC) are actively involved in proposing amendments to the Electronic Securities Act and the Capital Markets Act to legalize security tokens. These amendments will be presented to the National Assembly this month by PPP lawmaker Yun Chang-hyun, who is also a member of the National Policy Committee.Security tokens, which utilize the capabilities of blockchain technology, will play a pivotal role in this context. Once the legal framework is in place, the issuance and distribution of these tokens will be facilitated.In preparation for the proposal of these amendments, PPP lawmakers conducted a hearing today to discuss the matter at hand. The hearing included a presentation by Lee Soo-young, Head of the FSC’s Capital Markets Division, who shed light on the formulation of security token policies to bolster the capital market. Additionally, Choi Jeong-cheol, Head of the Strategy and Planning Division at Korea Securities Depository, outlined the key points of the proposed amendments to the Electronic Securities Act and the Capital Markets Act. Distinguished attendees at the hearing included Park Sun-young, an economics professor at Dogguk University; Hwang Hyun-il, a financial lawyer at law firm Shin and Kim; and Kim Kap-lae, a senior researcher at the Korea Capital Market Institute.Details in subsequent decreesIt is anticipated that these amendments will incorporate the framework introduced by the FSC in February, which focuses on enabling the issuance and distribution of security tokens, as well as establishing account management organizations and over-the-counter (OTC) brokerages. The forthcoming enforcement decrees, following the amendment of these Acts, will specify the precise details, including the authorization requirements for these entities and investment limits.