MANTRA snags VASP license in Dubai

Fraud Defense Sees Terraform Labs Pursue Access to FTX WalletsTerraform Labs, the Singapore-based cryptocurrency firm at the center of a lawsuit filed by the United States Securities and Exchange Commission (SEC) in February, is taking steps to bolster its defense against fraud charges.Photo by Anete Lusina on PexelsSubpoena for debtors’ recordsAccording to a motion filed with the FTX bankruptcy court in Delaware on Wednesday, the company is seeking permission from a judge to subpoena data from the bankrupt crypto exchange. The filing shows that Terraform’s legal team is requesting access to information about digital wallets utilized by short sellers between March and May 2022.The company believes that its algorithmic stablecoin’s collapse was not a result of natural market forces but rather a coordinated attack by short sellers, potentially involving Alameda Research, FTX’s sister company.The motion states: “To establish these defenses, TFL needs Debtors’ records about wallets, accounts, and assets used to transact on the FTX International and US exchanges and sales/offers of large volumes of cryptocurrencies developed by TFL, if any, by FTX Trading and West Realm Shires Services Inc. d/b/a FTX US.”Alleged securities fraudThe SEC’s lawsuit, filed on February 16, accuses Terraform Labs and its founder, Do Kwon, of orchestrating a multi-billion dollar crypto asset securities fraud. The regulator alleges that Terraform offered unregistered securities through its algorithmic stablecoin, TerraUSD (UST), and the Terra Luna (LUNA) token. The failure of Terraform in 2022 led to a staggering loss of over $40 billion in the crypto markets.The motion also targets Jump Trading, another entity accused by the SEC of colluding with Terraform to manipulate the price of the UST stablecoin. Jump Trading is facing a separate lawsuit in Illinois in the US, accused of purchasing millions of UST tokens in 2021 as part of an agreement with Terraform to maintain the stablecoin’s peg to $1.“Defendants misrepresented UST’s recovery by claiming that the algorithm was able to restore and maintain the price peg. According to the SEC, UST instead recovered its price peg because Defendants entered an arrangement with a U.S. trading firm, Jump Trading, […] to purchase substantial amounts of UST to support the price,” reads the court filing.Jurisdictional argumentsAside from its pursuit of FTX’s data, Terraform is also seeking to dismiss a class-action lawsuit in California, having already sought to have the SEC lawsuit dismissed. The company argues that since it is based in Singapore, US securities laws referenced in the lawsuit are not applicable to its foreign-developed protocols.Using a similar jurisdictional argument, Do Kwon also tried to conceal documents held in Singapore by the Singaporean company from the SEC, but he failed in that endeavor.Another significant development at Terraform has seen a new CEO appointed to lead the troubled company. According to a report in the Wall Street Journal on Wednesday, Chris Amani, who has been acting as Terraform’s Chief Operating Officer and Chief Financial Officer up until now, has been appointed as CEO.

Bill Winters, the American banker who heads the British financial group Standard Chartered, appeared at the Hong Kong FinTech Week conference earlier this week, where he predicted a future in which cash will give way to blockchain-based systems for everyday transactions. According to Cointelegraph, Winters’ view aligns with that of Hong Kong regulators. At the same time, he stressed the importance of continued experimentation, noting that it remains uncertain how this transformation will ultimately take shape. Winters also commended Hong Kong’s leadership in exploring the potential of digital finance. Tech-driven finance has certainly been one of the key initiatives Hong Kong has been exploring. Recently, the Hong Kong Monetary Authority (HKMA) released its e-HKD Pilot Programme Phase 2 Report, which showed public support for tokenized deposits.Photo by Shubham Dhage on UnsplashReal-world assets gain ground on the blockchainOn-chain data also underscores the rapid growth of the tokenization sector. According to RWA.xyz, the total value of real-world assets (RWAs) deployed on-chain has climbed to $35.63 billion, up 7.8% from a month ago. A study by Ripple and Boston Consulting Group (BCG) estimates that tokenized assets could be worth $19 trillion by 2033, about 530 times their current value. Among RWA assets, the BlackRock USD Institutional Digital Liquidity (BUIDL) Fund, Tether Gold (XAUT), and Paxos Gold (PAXG) currently lead the market in terms of value. Over the past 30 days, BlackRock’s BUIDL Fund slipped 0.06%, while the two tokenized gold products, XAUT and PAXG, jumped 46.65% and 14.19%, respectively. These gains mirror gold’s bullish run in October, when its price surpassed $4,000 per ounce for the first time on Oct. 7. The momentum has since eased slightly, with gold now trading at around $3,969.55 per ounce. Tokenization brings 24/7 markets and P2P flexibilityIndustry experts point to the convenience of tokenization as a key advantage. Speaking to Yahoo Finance, Will Peck, head of digital assets at WisdomTree, explained that tokenized gold allows for around-the-clock trading and direct peer-to-peer (P2P) transactions. He added that gold and Bitcoin act as complementary stores of value, both serving as deflationary assets. Ian Kane, CEO of fintech company Firepan, said tokenized gold appeals to investors as it enables them to retain ownership, leverage their holdings for loans, and generate extra yield, while preserving their principal against debasement or devaluation. These views are not new. Earlier this month, Robinhood Markets CEO Vlad Tenev described tokenization as “a freight train” that “can’t be stopped,” predicting it will eventually transform the global financial system. Similarly, in his annual letter to investors in April, BlackRock CEO Larry Fink said the tokenization of assets could fundamentally reshape the way people invest. By digitizing ownership, tokenized venture capital funds could move beyond their closed circles, giving ordinary investors a stake in early-stage innovation and greater control over their capital. Venture capital faces hurdles in tokenization pushWhile tokenization promises greater accessibility and liquidity, not all market segments are ready for it. According to TheStreet, tokenized venture capital (VC) funds could open a traditionally closed market to more investors, but the process is more complex than it appears. In an interview with TheStreet, Elena Obukhova, founder of Supermoon Ventures, said that liquidity, not technology, is the main obstacle. Unlike tokenized company shares that can be traded freely on public markets, VC funds invest in private startups whose value may take years to materialize through an exit or acquisition. Allowing such funds to trade freely could increase volatility and pressure founders, as interim valuations might distort perceptions and weaken confidence in early-stage ventures. Still, the promise of tokenized venture finance remains within reach. Firms are testing models that limit trading periods, protect investor data, and refine valuation methods to better reflect the illiquid nature of startup investments. Since liquidity events such as initial public offering (IPOs) or acquisitions typically occur only every one to two years for early-stage startups, the path forward will depend on creating systems that can maintain stable and accurate valuations in the interim. Tokenization is rapidly emerging as a transformative force in the financial world, offering greater accessibility, liquidity, and efficiency. As more assets, from gold to venture capital, make their way onto the blockchain, the potential to reshape investment and trading markets grows. While challenges remain, particularly around liquidity and valuation in sectors like venture capital, the continued advancements in tokenization demonstrate its key role in the future of finance.

Korean Lawmakers Make Progress on Virtual Asset User Protection BillOn Tuesday, the subcommittee for legal deliberations under the South Korean National Assembly’s National Policy Committee reached a consensus during the first review of the Virtual Asset User Protection Bill, according to Yonhap Infomax.©Pexels/Andrea PiacquadioFirst review phaseThe bill is undergoing a two-phase review process before being legislated. During the first phase, the primary focus was on safeguarding customer assets and preventing unfair transactions. The second phase is expected to concentrate on market order regulations, including the issuance and disclosure of virtual assets.Application of Capital Markets ActSeveral stipulations were included in the approved draft of the Virtual Asset User Protection Bill during the initial review phase. These stipulations include prioritizing the application of the Capital Markets Act to virtual assets that are classified as securities, while excluding central bank digital currencies (CBDCs) from the definition of virtual assets to avoid any potential confusion. The bill also seeks to impose compensatory damages and penalties for any unfair trading practices, and establish a virtual asset committee responsible for investigating any unfair transactions in the digital asset market.The virtual asset committee will also engage in preliminary deliberations regarding the management, supervision, and monitoring of the digital asset market. The committee will carry out tasks assigned to it by the Financial Services Commission (FSC). Furthermore, the Bank of Korea has been granted the right to request data from virtual asset operators since virtual assets, although not currencies, are necessary to consider when establishing monetary credit and financial stability policies.No class action systemHowever, the introduction of a class action lawsuit system was not adopted, and details about inspecting virtual asset operators will be stipulated in a presidential decree rather than a law.Second review phaseFor the second review phase, the FSC will report several matters to the National Assembly. These will involve tasks such as establishing a regulatory framework for stablecoins, security tokens, and utility tokens. In addition, the agency will be responsible for creating a regulatory system for virtual asset valuation, advisory, and disclosure services, as well as an integrated computerized system that provides reliable and reasonable information on digital assets. The FSC will also explore ways to enhance the business conduct discipline of cryptocurrency operators by commissioning research from external organizations.Additionally, the FSC and the Financial Supervisory Service will work on supporting virtual asset exchanges to establish uniform standards for the circulation supply of virtual assets. The regulatory bodies will also enforce the requirement for transparent disclosure and strict internal control on virtual asset operators. Moreover, regulations will be developed to enhance virtual asset usability and remove any obstacles that may impede the development of innovative real-life services.