Wemade and SK Planet Team Up for Blockchain and Online Platform Collaboration

A Chinese creditor of failed crypto exchange FTX has filed an objection on his own behalf and that of 300 others, with a U.S. bankruptcy court against a motion lodged with a view towards excluding payouts to creditors resident in China, Russia and 47 other foreign jurisdictions.Photo by Mariia Shalabaieva on UnsplashPotential distribution forfeitureThe FTX Recovery Trust, an entity formed in January to oversee the FTX bankruptcy estate following the adoption of a plan of reorganization, filed a motion last week seeking the approval of the Delaware Bankruptcy Court in the United States to adhere to new parameters related to the claims of creditors residing in restricted overseas jurisdictions. Besides China and Russia, the list of restricted jurisdictions also includes many within the Asian region, including  Afghanistan, Iran, Iraq, Macau, Myanmar (Burma), Nepal, North Korea, Pakistan, Qatar, Bangladesh and Cambodia. The FTX estate claims that these jurisdictions have regulations and laws restricting cryptocurrency transactions. In such cases, the FTX Recovery Trust claims that it cannot break local laws.  The difficulty for creditors resident in these countries is that if it's deemed illegal to reimburse them, they won’t qualify for the next scheduled distribution from the estate. In that instance, distribution forfeiture will be triggered. Taking to X on July 7, FTXcreditor.com, an entity that has been buying up bankruptcy claims from FTX creditors over the course of the FTX bankruptcy process, highlighted the peril that creditors residing in these restricted countries may face. It stated: “Distribution forfeiture is triggered at every distribution record date. The first record date already passed, if your claim is still tied to a local KYC when the stamp drops, that tranche is potentially gone.” Short timeframe for objectionsMr. Purple, a pseudonymous distressed assets bankruptcy professional who has been advocating for FTX creditors since the collapse of the business in November 2022, concurred with this view in a subsequent post on X. He pointed out that an extremely short timeframe has been given to affected creditors to respond. The motion was filed on July 2 and objections are due by July 15. $500 million in claims are at stake which accounts for 5% of all creditor claims. Of this, 82% of these claims belong to Chinese creditors. In a series of follow-up posts, the bankruptcy professional describes several procedural issues that he believes will result in it being incredibly difficult for affected creditors to have their funds reimbursed.Mr. Purple concludes:”The incentives are designed to be extremely risk averse in finding [a legal opinion] that paying creditors is legal! [The estate’s lawyers will] take the fees and say its not legal.” In his court filing, the Chinese creditor, who is resident in Singapore, stated: “My family holds four KYC-verified accounts with aggregate claims exceeding $15 million USD.” . . . “We have fully complied with every procedural requirement under the Plan. The proposed motion now jeopardizes our right to distribution in an arbitrary and inequitable manner.” On X, he asserted that the FTX Recovery Trust’s motion “constitutes an impermissible and material modification of the Plan.” Aside from legal action, the only other potential solution for creditors residing in restricted countries is to sell their claims. However, claims buyers are pricing in greater risk with lower rates and less favorable terms.

A recent survey of South Korean crypto investors showed a modest shift toward a more positive short-term view on Bitcoin, although market data since the poll was released has yet to strongly support that outlook. The regular survey, conducted last week by CoinNess and Cratos, found that 44.8% of Korean respondents expected Bitcoin to rise or surge this week, up from 35.2% in the previous survey.Photo by Jievani Weerasinghe on UnsplashThe share of respondents expecting Bitcoin to move sideways fell to 28.3% from 33%, while those forecasting a decline or sharp drop decreased to 26.9% from 31.8%. The figures indicate that bullish responses increased from the previous week, while neutral and bearish responses declined. However, with several days having passed since the survey was released, Bitcoin’s price action has so far offered a more cautious picture. At the time of writing, Bitcoin was trading at $77,085.07, down 1.14% from a week earlier, according to CoinMarketCap. The survey also showed that investors remain wary of the broader market environment. Asked how recent macroeconomic uncertainty and market volatility had affected the difficulty of crypto investing, 40.5% said it became “much more difficult,” and 35.3% said it became “somewhat more difficult.” That means roughly three-quarters of respondents said crypto investing has become harder than before. Another 16.6% said conditions were little changed, while 7.6% said investing became easier. GIWA Chain targets cross-border financeWhile retail investors appear cautious about the near-term market backdrop, major Korean firms are continuing to push ahead with blockchain projects tied to cross-border finance. Dunamu, the operator of Upbit, South Korea’s largest crypto exchange, said it has signed a memorandum of understanding (MOU) with Hana Financial Group and POSCO International to develop services for overseas remittances, payments, and corporate treasury management. The project brings together Dunamu’s layer-2 blockchain, GIWA Chain, Hana Financial Group’s foreign exchange network, and POSCO International’s global supply-chain platform. The companies said the collaboration will focus on faster international transfers, more efficient corporate fund management, and new digital finance services. The firms also plan to test whether some processes currently handled through the SWIFT network can be moved onto GIWA Chain. Coinone sanctions put on hold by courtOn the regulatory front, a court has temporarily halted enforcement of sanctions against crypto exchange Coinone, after the Korea Financial Intelligence Unit (FIU) ordered a fine and partial business restrictions over alleged anti-money laundering (AML) violations. The measures had been set to take effect on April 29. According to the Maeil Business Newspaper, the court said the stay would remain in effect until May 29 while it considers Coinone’s request to suspend the sanctions. It stressed that the decision was provisional and did not constitute a final ruling on the request. Earlier this month, the FIU, South Korea’s financial intelligence agency under the Financial Services Commission (FSC), imposed a KRW 5.2 billion ($3.52 million) administrative fine on Coinone for alleged violations of the country’s financial transactions law. The regulator also ordered a three-month restriction on virtual asset transfers for new customers, covering both deposits and withdrawals. 

At the end of last month, social derivatives trading platform ZKX, a protocol that runs on the Ethereum-centric Starknet layer-2 network, shut down blindsiding the project’s stakeholders. That event has led to Singapore-headquartered digital assets firm Amber Group speaking out, calling for cryptocurrency projects to be more accountable and transparent going forward. Not economically viableNews of the project shutdown emerged when ZKX founder Eduard Jubany Tur took to X on July 30 to outline the discontinuation of the protocol. Tur claimed that the project was “unable to find an economically viable path for the protocol.” In a long-form post, the ZKX founder outlined that user engagement had been minimal, resulting in disappointing trading volumes. By extension, Tur claimed that revenues didn’t come anywhere close to covering cloud server expenses. “The market is undervaluing the work done and infrastructure built by appchains and dApps coming from ecosystems like ours,” Tur added. Pseudonymous blockchain sleuth ZachXBT had a different take on the matter, claiming that the shutdown represented a rug pull. Amber Group chimed in on the subject on X on Aug. 3. Amber suggested that it wouldn’t break any contractual non-disclosure obligations it had with regard to ZKX but that aside, the firm took the opportunity to share its perspective more broadly in an effort to promote transparency.Photo by Markus Spiske on PexelsAmber Group criticismAmber Group criticized the ZKX team on the basis of a lack of transparency. It stated: “The last update we received was on July 30, when the project announced the cessation of operations. This decision was made without prior communication, highlighting the importance of transparency in our industry.” Staying with that theme, it claimed that clear communication and transparency are essential for fostering trust and collaboration within the crypto community, and that such principles would guide future projects. Amber Group had acted as a market maker relative to the ZKX project. It borrowed and purchased ZKX tokens in support of the launch of the token and in an effort to support token liquidity post-launch. It had secured two million ZKX tokens from the open market, with its overall holding totaling three million ZKX tokens. Project investor HashKey Capital also took to the X social media platform on the subject. Like Amber Group it too criticized the ZKX project for its lack of accountability and transparency. It described the project’s reluctance to communicate as “disappointing,” while it asserted that Tur’s handling of the situation had been “regrettable.” Ye Su, founding partner at ArkStream Capital, expressed a similar complaint, stating on X that “when ZKX shut down, as investors, we got zero heads-up.” He also singled out Tur, claiming that “Edward took the money from early supporters without any communication, showing no moral standards and losing his right to future entrepreneurship in the industry.”