Shanghai Court Recognizes Unique Traits of Bitcoin

A settlement agreement between failed crypto lender BlockFi and bankrupt Singaporean crypto hedge fund Three Arrows Capital (3AC) has received approval from a U.S. judge. However, the specifics of the settlement remain sealed, citing concerns raised by yet another failed crypto platform, FTX. Dispute resolvedDuring a hearing on Feb. 6, New Jersey Bankruptcy Court Judge Michael Kaplan resolved the dispute, which saw BlockFi claiming $129 million owed by 3AC, while the Singapore-based firm contended that BlockFi owed it $280 million. Judge Kaplan's decision to keep the settlement agreement sealed stemmed from a perspective that unsealing it would be counterintuitive. BlockFi had filed a motion to seal the settlement terms last month. The U.S. Trustee objected to the seal, asserting that the debtors hadn't provided sufficient justification for sealing the agreement.Photo by mk. s on UnsplashSensitive settlement termsBlockFi justified the need for confidentiality, citing the sensitive commercial nature of the terms, which could potentially impact ongoing litigation involving FTX. The approval of the settlement now paves the way for BlockFi to proceed with distributions from the lending estate to its 100,000 creditors, with the firm owing up to $10 billion. Central to the dispute were preferential payments, transactions made just before bankruptcy that could have given the recipient more than they would have received through court proceedings. The resolution of counterclaims between BlockFi and 3AC follows mediation ordered by Judge Kaplan in October, likely culminating from a two-day hearing starting on Jan. 5 aimed at resolving the matter conclusively. This settlement follows another agreement between 3AC and Genesis, settling $1 billion in claims by 3AC. The company filed for bankruptcy in July 2022, attributing the extreme fluctuations in cryptocurrency markets as the reason for its collapse. Projected 46% 3AC creditor recoveryAccording to a December report to creditors by Teneo, it's estimated that 3AC creditors will receive approximately 45.74% of their claims from the bankrupt estate. As of Dec. 18, 2023, 3AC's assets were valued at $1.16 billion, while recognized claims for distribution stood at $2.7 billion. In an ongoing effort to secure 3AC's assets, a British Virgin Islands (BVI) court froze $1 billion in assets belonging to 3AC's founders, amid the liquidation process. This move is part of a broader strategy to seek recoveries from the founders and Kelly Chen, wife of one of the co-founders. 154 claims totaling $3.4 billion were filed against the 3AC estate, with $200 million not admitted for distribution and $322 million rejected or expected to be rejected. Additionally, claims worth $76 million are currently under dispute. BlockFi, along with eight affiliates, filed for Chapter 11 bankruptcy in November 2022. The firm cited significant exposure, including obligations owed to BlockFi by FTX-linked hedge fund Alameda Research, assets on the FTX platform and an undrawn credit line from FTX. 3AC’s collapse in June 2022, followed by FTX's downfall, led to BlockFi's bankruptcy filing in late November 2022. In a separate development, OPNX, a crypto bankruptcy claims platform launched by 3AC co-founders Su Zhu and Kyle Davies, announced its cessation of operations, with plans to shut down by Feb. 14.  

LINE NEXT scores biggest Web3 investment in Asia of 2023LINE NEXT, the NFT business arm of Tokyo-based Internet giant LINE Corporation, has secured a $140 million investment from a consortium led by Seoul-based private equity firm Crescendo Equity Partners, according to an official press release on Wednesday (KST). This is the largest investment in the Asian blockchain and Web3 industry this year.Photo by Precondo CA on Unsplash“LINE’s global competitiveness and its vision to lead Web3 services were the investment thesis,” said Kevin Lee, Managing Partner at Crescendo. “We hope to build a standard for Web3 apps that general users can easily use and adopt blockchain to all sorts of services and brands of Web2.”Ambitious roadmapLINE NEXT plans to use the funds to popularize Web3 by expanding its global platform and developing new services. This includes the official launch of DOSI, a global mobile NFT marketplace app for trading digital products, which will be integrated with LINE’s Japanese NFT marketplace LINE NFT. The launch is scheduled for January next year.The firm will also enable Web2 services and brands to easily adopt Web3 technology by providing new solutions that allow them to directly own and trade digital products.To further promote the widespread adoption of Web3 technology, LINE NEXT plans to create an app that utilizes AI technology to facilitate communication between users via characters they create themselves, as well as a new Web3 game featuring iconic LINE characters. These services will be developed on the public blockchain Finschia.LINE NEXT and Crescendo will also participate as governance council members of the Finschia Foundation and contribute to the expansion of the ecosystem.Strategic investmentKo Young-su, CEO of LINE NEXT, pointed out that such a large-scale investment is a major step considering the global investment environment has recently been shrinking. “We plan to use this opportunity to further popularize Web3 and develop a new service ecosystem where users own the value of their digital goods,” he said.Sponsored by Peter Thiel — the co-founder of Paypal, Palantir Technologies and Founders Fund — Crescendo is dedicated to discovering and investing in promising technology companies both in South Korea and overseas.

Sega Curbs Interest in ‘Boring’ Blockchain GamingJapanese video game behemoth Sega Corp., once an advocate for blockchain gaming, is reevaluating its involvement in the sector as the global crypto industry continues to face challenges.In a recent interview with Bloomberg, Shuji Utsumi, the Co-Chief Operating Officer of Sega, revealed that the company will withhold its major franchises from third-party blockchain gaming projects to protect the value of its content.Photo by Pat Krupa on UnsplashHalting blockchain game developmentAdditionally, Sega is temporarily halting the development of its own blockchain games. These decisions mark a significant shift for the 60-year-old gaming studio, which previously joined other industry players in exploring the potential of blockchain technology to enhance game appeal. However, the recent collapse of the digital currency market has dampened enthusiasm for such initiatives.While Sega withdraws from blockchain gaming, it does plan to allow external partners to utilize its lesser-known characters, such as those from Three Kingdoms and Virtua Fighter, for non-fungible tokens (NFTs). NFTs serve as digital asset ownership certificates.Sega’s intention to venture into the NFT community drew criticism from some gamers who viewed crypto technology as environmentally harmful. Utsumi emphasized the importance of creating enjoyable gaming experiences and expressed his skepticism about the “play-to-earn” model associated with blockchain games, describing such games as “boring.”Reservations on Web3 adoptionIn addition to the uncertainties surrounding blockchain gaming, Utsumi expressed reservations about the adoption of Web3 technology in Sega’s upcoming “super game” initiative. This initiative involves the release of high-budget online multiplayer games starting in 2026. Sega is currently assessing whether the technology will gain traction in the gaming industry before committing to its implementation.Sega’s strategic shift reflects a broader cooling trend relative to the Web3 concept, which implicates an internet built on blockchain technology. Despite attracting significant investments in the past, Web3 has faced criticism and diminishing interest from major players like Ubisoft.However, Sega will continue to offer its lesser franchises to several blockchain games that will be announced later this year. The company also plans to invest hundreds of millions of yen in related projects, as the technology still holds value in enabling the transfer of characters and items between different games. Sega remains open to further involvement in blockchain gaming as the technology matures.Big brand cautiousnessUtsumi acknowledged that the views expressed by blockchain advocates may seem extreme to many in the video game industry. Nevertheless, he recognized the importance of risk-takers who pioneer new technologies, referring to them as the “first penguins” who should not be underestimated.Sega’s cautious approach reflects the need to strike a balance between innovation and maintaining the core aspects of enjoyable gaming experiences, while closely monitoring the evolution of blockchain and Web3 technologies in the industry.It’s also likely that the gaming sector’s most coveted brands will remain cautious on blockchain gaming while newcomers like Animoca Brands can better afford to be the risk takers that drive blockchain gaming forward. Earlier this week, Animoca’s Co-Founder Yat Siu said that he was bullish where blockchain gaming is concerned.