Seoul prosecutors charge eight suspects linked to crypto price manipulation

KISA to establish blockchain trust framework for public servicesThe Korea Internet & Security Agency (KISA) is developing a system called the Korea-Blockchain Trust Framework (K-BTF) to facilitate the development and operation of blockchain-based public services, said Lee Kang-hyo, a senior official at KISA, during the 2023 Blockchain Grand Week on Wednesday (local time).Blockchain Grand Week is an event hosted by the Ministry of Science and ICT and jointly organized by the National IT Industry Promotion Agency (NIPA), the Korea Internet and Security Agency (KISA) and the Institute of Information and Communications Technology Planning and Evaluation (IITP) to promote the value of blockchain technology in enhancing trust in the digital age.Photo by Philipp Katzenberger on UnsplashPrevious roadblocksKISA has executed over 100 blockchain pilot projects over the last five years, but only a few have been carried out due to significant costs and interoperability barriers between services. According to the agency, it costs KRW 450 million (approximately $348,000) to carry out one project. Therefore, it has shifted its focus to making development easier and supporting data interoperability between services.“Developing blockchain-based public services entails building a blockchain platform, developing services and connecting them with government legacy systems,” Lee explained. “Blockchain developer APIs are becoming standardized overseas, and we thought it was time for us to leverage such advantages as well.”Another challenge was that previous blockchain-based public or governmental services did not offer smooth user experiences (UX), often requiring the installation of separate wallets or applications with each use.Bringing cost-efficient, user-friendly public blockchain servicesTo address these issues, KISA decided to focus on three key areas for building K-BTF — cost reduction, convenient development and usability — with an overall groundwork that covers interfaces, services and security while minimizing intrusion into the private sector.Once the K-BTF is established, government agencies will be able to easily plan and operate blockchain-assisted services such as decentralized identifiers (DIDs) and non-fungible tokens (NFTs). The costs for development will be determined based on how much a given service is used instead of the original base cost of KRW 450 million.Also, public institutions tend to go through staffing changes quite often, and building services under K-BTF will enable governmental operations to run normally without any roadblocks or inconveniences caused by such changes.Lee went on to mention that although a wide array of services can be built on the framework, there will be basic requirements in terms of functionality, performance and security that must be fulfilled for a service to run on it. To verify this, the KISA established a testing and certification system that utilizes its Cloud Security Assurance Program (CSAP) certification system and the Information Security Management System (ISMS).To improve usability, the framework will require users to install only one digital wallet that stores digital forms of identification and various authentication certificates.The KISA is set to start working on the K-BTF next year. Notably, it plans to create a governance system consisting of government agencies — those that are the demand clients for the framework –, private corporations and related experts. Six core services that will employ K-BTF have already been selected after a review of 34 pilot projects proposed in 2021 and 2022 and major national blockchain projects from six overseas countries. These six services are NFTs, DIDs, data origin authentication, data history tracking, Blockchain as a Service (BaaS) and digital wallets.Lee emphasized that the goal of the K-BTF is to derive services that can be used by the public sector within regulatory and technological boundaries.

Genesis Ordered to Comply with Subpoena in Terraform Labs CaseGenesis, the troubled crypto lender and trading company, has been issued a compelling directive by a New York court. The court has mandated Genesis to comply with a subpoena within five days, following a failure to respond to previous requests by the October 9 deadline, relative to a case involving Singapore’s Terraform Labs.Photo by Michael Discenza on UnsplashTerraUSD collapse falloutThese requests are related to the 2022 collapse of the TerraUSD stablecoin, a cryptocurrency which was supposed to maintain a peg to the US dollar’s value until it lost that peg and collapsed. At the time, the demise of TerraUSD reverberated throughout the cryptocurrency markets.In response to this collapse, the US Securities and Exchange Commission (SEC) initiated a legal action against Terraform Labs, the company responsible for the token, and its co-founder Do Kwon, alleging that investors had been misled. Both Do Kwon and Terraform subsequently tried unsuccessfully to have the case dismissed.As part of the progression of this case, the SEC sought to question Do Kwon and gain access to company records held by the Singapore-headquartered firm. The defendants were ultimately unsuccessful in arguing their case in that instance on jurisdictional grounds.Failure to respondJudge Jed Rakoff, in a court order filed on Friday, highlighted Genesis’s non-compliance with the subpoenas, stating:“As of today, the Genesis Entities have failed to produce any documents in response to the Subpoenas.”These subpoenas were issued by the defendants to seek specific information from Genesis Global Capital, Genesis Global Holdco, and Genesis Global Trading on September 12.The court order does not specify the nature of the information sought. It is worth noting that Genesis extended substantial loans to the now-defunct hedge fund Three Arrows Capital (3AC), which was heavily exposed to the TerraUSD stablecoin. In January 2023, three Genesis entities filed for bankruptcy, and its trading arm ceased its US spot market operations in September.In addition to the challenge posed by Genesis’ non-compliance, Judge Rakoff is also wrestling with obtaining information from Do Kwon in connection with the legal proceedings. Kwon’s legal representatives have argued that he cannot physically come to the US as he is serving a jail sentence in Montenegro for possession of a counterfeit passport.However, Judge Rakoff has expressed his determination to ensure Kwon’s availability for cross-questioning and stated that Kwon will not be allowed to provide any declarations in the case without being subject to cross-examination.Citadel under scrutinyIn a related development, it emerged last week that Terraform Labs is accusing American market maker Citadel Securities of having sabotaged its TerraUSD stablecoin. As part of the Singaporean company’s pursuit of justice, it has called upon the United States District Court in the Southern District of Florida to force Citadel to furnish specific documents that relate to their trading activities during the period within which TerraUSD collapsed.Should it fail in that endeavor, Terraform has said that it will look to have the matter heard in Judge Rakoff’s court in New York.This legal development concerning Genesis marks a crucial juncture in the ongoing investigation into the TerraUSD stablecoin’s collapse and the actions of the entities involved, with Genesis now facing increased pressure to cooperate fully with the legal process.

The Monetary Authority of Singapore (MAS) has unveiled a new initiative aimed at enhancing the nation’s financial infrastructure through the use of stablecoins and tokenized commercial bank money. Announced on Oct. 16, the project, known as BLOOM, short for Borderless, Liquid, Open, Online, Multi-currency, brings together 16 financial sector participants, including Anchorage Digital, Ant International, Circle, Coinbase, and DBS Bank. According to MAS, BLOOM is open to additional participants through a registration form available on its official website.Photo by Jason Leung on UnsplashBuilding on Project OrchidBLOOM operates under Project Orchid, a digital Singapore dollar initiative launched in 2021 to explore potential applications of central bank digital currency (CBDC) in strengthening Singapore’s financial ecosystem. Through BLOOM, it will examine use cases involving G10 and Asian currencies, covering both domestic and cross-border payments, as well as wholesale financial transactions. The project’s focus includes coordinating interoperability between different networks to enable the distribution and clearing of settlement assets. It will also explore automated compliance checks and study methods to make wholesale settlements more efficient and cost-effective. Artificial intelligence (AI) agents are expected to play a supporting role, executing transactions automatically within predefined limits and regulatory parameters. Expanding stablecoin usage in SingaporeThe MAS initiative comes shortly after the listing of XSGD, a Singapore dollar–backed stablecoin, on the U.S.-based crypto exchange Coinbase on Oct. 1. XSGD is issued by StraitsX, a digital payments provider, and is fully backed by reserve assets held with DBS Bank and Standard Chartered. Stablecoin payments have gained traction in Singapore’s retail sector as well. StraitsX recently began supporting settlements in USDT and USDC through OKX Pay. Consumers can use SGQR codes at participating GrabPay merchants to make everyday purchases, such as coffee, with transactions settled directly in Singapore dollars into merchant accounts. Rising local interest in digital assetsSingapore’s growing engagement with digital assets reflects a broader trend of public interest. A report from ApeX Protocol, cited by Cointelegraph, ranked Singapore as the world’s most “crypto-obsessed” nation, awarding it a composite score of 100. The ranking considered ownership rates, adoption growth, search activity, and ATM availability. The study found that 24.4% of Singapore’s population holds cryptocurrency, ahead of the United Arab Emirates (UAE), which scored 99.7 despite a 25.3% ownership rate. In a separate development, Channel News Asia reported that three Singaporeans have been implicated in a large-scale fraud scheme linked to Cambodia’s Prince Group. The U.S. Department of Justice recently confiscated 127,271 Bitcoin tied to the operation—the largest seizure in its history. Following the investigation, the U.S. Department of the Treasury’s Office of Foreign Assets Control imposed sanctions on the three individuals as well as 17 Singapore-registered entities. The sanctions block access to any property in their possession and prohibit U.S. persons from engaging in transactions with them, citing risks to U.S. national security and foreign policy interests.