Wemade Partners with Etherscan to Enhance Transparency in WEMIX 3.0 Ecosystem

The Asia Web3 Alliance Japan, an agency that regards itself as a bridge between the Web3 ecosystem in Asia and Japan’s broader business sector, has reached out to the Securities and Exchange Commission in the United States with a view towards establishing a strategic collaboration.Photo by Clement Souchet on UnsplashFocus on Web3 regulatory innovation & tokenizationThe President of the organization, Hinza Asif, wrote to SEC Crypto Task Force Chairperson and SEC Commissioner, Hester Peirce, on the subject, on March 25. The letter, subsequently published by the SEC, sets out a proposal that centers on a strategic U.S.-Japan partnership relative to Web3 regulatory innovation and tokenization. The Japanese agency, which has set out cross-border synergy as one of its objectives, calls for collaboration between Japan’s Financial Services Agency, the Japanese Ministry of Economy, Trade and Industry and the Bank of Japan with the U.S. regulator. The Alliance proposes that the goal of that partnership would be the establishment of regulatory clarity in respect of the Web3 sector, together with the fostering of interoperability between a developing Web3 ecosystem in the U.S. and the one that’s developing in Japan. Token classification frameworkDelving deeper into proposal specifics, Asif sets out the formation of a harmonized token classification framework as a key objective. The proposal suggests that a distinction needs to be made between tokenized securities, utility tokens and non-security digital assets.  The alliance believes that right now, token classification is unclear, with projects struggling to understand what category their token falls within from a regulatory perspective. There’s a lack of token offering frameworks. While it sees that further work is required, the Asia Web3 Alliance Japan is encouraged by progress made by the SEC’s Crypto Task Force in identifying security categories. With this cross-border collaboration, the Japanese crypto advocacy group believes that there is an opportunity to achieve regulatory interoperability on an international basis. That would facilitate compliant cross-border token issuance. On that basis, the alliance suggests that standards be developed such that regulatory consistency is achieved internationally when it comes to items such as digital asset trading, custody and token issuance. The proposal sets out a need for reciprocal disclosure requirements between the two jurisdictions where cross-border token issuance is concerned. It advocates for mutual recognition of what it terms “compliant tokenized offerings.” Bringing safe harbor to JapanAnother focus area contained within the proposal is the suggestion of a need to implement a safe harbor approach in Japan for early-stage token projects in line with what has been put forward in the U.S. Peirce first put forward a token safe harbor proposal in the U.S. in 2020. It sets out to provide exemptions over a defined initial period for certain token issuances. The idea behind it is to enable these early-stage projects to innovate and mature without getting bogged down in a regulatory quagmire. The establishment of a U.S.-Japan Web3 regulatory roundtable is another strand contained within the proposal. This would provide a mechanism for ongoing dialogue between stakeholders such as regulators, industry leaders and legal experts.

Crypto vulnerability uncovered with $1B in digital asset exposureSecurity vulnerabilities in the validator infrastructure of InfStones, an established infrastructure provider, have been disclosed by Tel Aviv-headquartered cybersecurity firm dWallet Labs.Photo by Brett Jordan on UnsplashBlockchain network validator vulnerabilityIn a detailed Medium blog post published on Tuesday, dWallet Labs shed light on a series of vulnerabilities that, when exploited, could potentially allow attackers to gain full control, execute code and extract private keys from numerous validators on major blockchain networks. Cryptocurrencies such as ETH, BNB, SUI, APT and others were identified as at risk, with potential direct losses estimated to exceed one billion dollars.The vulnerabilities discovered by dWallet Labs opened the door for attackers to compromise the private keys of validators across multiple blockchain networks, putting over one billion dollars of staked assets at risk. In response to the findings, InfStones, a Web3 infrastructure platform, also released a statement on Tuesday acknowledging the potential threat. However, its representative, Darko Radunovic, disputed the figures provided by dWallet Labs in a statement sent to Cointelegraph. Radunovic stated that the vulnerabilities identified in the production environment account for below 0.1% of their active nodes launched to date, emphasizing that the impact would be limited to a small fraction of their operational nodes.According to InfStones, “237 instances were in scope, of which 212 instances were deployed for our development and testing purposes, and 25 freshly deployed instances in the production environment.”Mitigating steps takenThe company detailed the immediate actions taken to mitigate the vulnerabilities, including shutting down the affected ports, as well as rotating all credentials and keys within their platform. An internal review conducted by InfStones revealed no additional adverse effects. Notwithstanding that, the company took the additional step of hiring an external security firm to audit its systems and policies.Meanwhile, dWallet Labs Founder and CEO Omer Sadika shared his thoughts on the X platform as to how he believes such events should be handled. Sadika wrote:”The worst way to handle a cybersecurity vulnerability is not taking responsibility and lying. We were super open and transparent with the goal of eliminating the risk to web3. My take: it’s not about whether you are fully secure or not, because no one is, it’s about how you handle it and maintain the trust with your partners and customers.”The collaboration between dWallet Labs and InfStones sheds light on the ongoing challenges faced by the cryptocurrency industry in maintaining the security and integrity of blockchain networks. While vulnerabilities were identified and addressed, the incident underscores the importance of proactive security measures to safeguard the assets and data within the rapidly evolving landscape of digital assets.

DeFiance Capital Secures Interim Victory in Dispute With 3ACSingapore’s DeFiance Capital, a Web3 and crypto investment firm, has notched up a small triumph in its ongoing $140 million legal clash with failed Singaporean crypto hedge fund, Three Arrows Capital (3AC).Photo by Sasun Bughdaryan on UnsplashFavorable rulingAccording to a statement provided via a Medium blog post by DeFiance Capital Founder and CEO Arthur Cheong on Tuesday, the High Court of Singapore has delivered a favorable ruling for the firm, endorsing its preference for jurisdiction in Singapore, rather than the British Virgin Islands, which had been advocated by 3AC.The tussle between 3AC and DeFiance Capital centers around the ownership of certain assets. The liquidators appointed by the British Virgin Islands Court, from Teneo, assert that these assets essentially belong to 3AC’s creditors. However, DeFiance Capital argues vehemently that these assets must be partitioned and returned to its stakeholders.Struggle over assets and jurisdictionAt the heart of the matter are assets totaling $115 million, encompassing digital currencies and non-fungible tokens (NFTs), which currently remain under the control of DeFiance Capital. Additionally, there are 69 SAFE (simple agreement for future equity)/SAFT (simple agreement for future tokens) agreements linked to 3AC. Although Teneo places the collective worth of these assets at roughly $141 million, DeFiance Capital’s estimation is more conservative, pegging it at around $120 million.Beyond asset ownership, jurisdiction has become a pivotal point of contention in the legal discourse. DeFiance Capital has steadfastly advocated for legal proceedings to take place in Singapore, where it operates, as opposed to the British Virgin Islands. The recent ruling from the High Court of Singapore lends support to this stance, challenging Teneo’s argument.DeFiance articulated its position, asserting: “Our position was that all the important witnesses and documents are in Singapore and the dispute ought to be heard by the Singapore Courts to ensure all relevant evidence would be available.”With the court’s decision aligning with DeFiance’s jurisdictional preference, the firm hopes that this development will pave the way for more substantive engagement between the parties, rather than being embroiled in procedural wrangling. The firm believes that this will allow the focus to shift towards addressing the core issues at hand.Business riftThe genesis of this legal saga dates back to 2020 when DeFiance was established as part of the 3AC group, operating autonomously under the stewardship of its founder, Arthur Cheong. The rift escalated in February 2022, when Cheong declined 3AC’s proposal to relocate to Dubai, eventually leading to the formation of two Singapore-based firms in May of that year.Furthermore, in the same month, DeFiance extended a loan of $35 million worth of USDC to 3AC, effectively becoming a creditor. Complications arose when 3AC’s founders transferred legal rights related to DeFiance Capital, a transaction that remained incomplete as 3AC filed for bankruptcy.In light of the ongoing dispute, 3AC asserted that DeFiance’s assets should be harnessed to settle its debts. However, DeFiance firmly stood its ground, upholding its ownership claims over the assets.With liquidators advocating for resolution in the British Virgin Islands — a move that DeFiance rejected due to its Singaporean management ties with 3AC — the stage was set for the legal clash that has now taken a notable turn with this recent court ruling.