Investigation launched into prominent Chinese blockchain figure Yao Qian

FTX, the failed cryptocurrency exchange founded by Sam Bankman-Fried, has taken legal action by filing a lawsuit against four former employees of Salameda, a Hong Kong-based affiliate closely linked to the exchange’s former CEO.According to a Delaware bankruptcy court filing in the United States on Thursday, the lawsuit alleges that five individuals exploited their personal connections to prioritize their asset withdrawals from FTX during a period of uncertainty regarding the exchange’s stability. The defendants in question are Salameda’s former employees — Michael Burgess, Matthew Burgess, Kevin Nguyen, and Darren Wong — as well as Michael and Matthew’s mother, Lesley Burgess, and two companies: 3Twelve Ventures and BDK Consulting.Photo by Bermix Studio on Unsplash Preference period clawbackThe critical withdrawals occurred within the 90-day period leading up to FTX’s bankruptcy filing on November 11, commonly referred to as the “Preference Period.” Under US law, customers who withdrew their crypto assets during this timeframe could potentially face lawsuits from the exchange’s creditors seeking to recover these funds, a process known as a “clawback” under bankruptcy regulations.The total value of these suspicious transfers is estimated at $157.3 million, with more than $123 million of that sum withdrawn after November 7, 2022. Michael Burgess is alleged to have received around $73 million of these illicit withdrawals.The lawsuit claims that the individuals leveraged their connections within FTX Group to ensure preferential treatment over other customers. In a specific accusation, Matthew Burgess is said to have engaged other FTX Group employees to expedite certain withdrawal requests from his FTX US exchange accounts while falsely representing the accounts as his own. 11th hour withdrawalsIn this way, Burgess and the other four defendants managed to get funds out when most other FTX customers couldn’t. The final withdrawals were executed only hours before FTX.com suspended all withdrawals on November 8, 2022, according to the lawsuit. As one commentator on X put it, “FTX employees were manually reviewing large withdrawals & pushing some ahead.”The legal filing also delves into the significant profits the defendants reportedly accrued from trading cryptocurrencies in the months leading up to FTX’s collapse. Even after their apparent departure from the FTX Group, Michael Burgess, Nguyen, and Wong actively traded through entities such as 3Twelve and BDK, with monthly trading volumes ranging from $100 million to $400 million.A noteworthy aspect of this activity is that their trading capital was allegedly derived from the FTX Group. The court filing goes on to claim that “Burgess, Nguyen and Wong received substantial transfers of digital assets and fiat currency from exchange accounts associated with FTX Group entities, including approximately 13.1 million FTT sent to Darren Wong, more than 1 million SOL sent to Michael Burgess, and nearly $4 million USD for ‘bonuses’ between Michael Burgess, Nguyen and Wong.” Retail clawback riskThis legal battle and the allegations against the former Salameda employees are being watched closely by other FTX bankruptcy stakeholders. The FTX Debtor has suggested that it will pursue clawbacks vigorously. That has concerned former retail customers who managed to withdraw assets in the final days before the platform collapsed. Equally, it is a worry for current FTX creditors who may have withdrawn some but not all of their assets before the exchange was shuttered.

The Korea Association of Game Industry (K-GAMES) – the body responsible for overseeing and nurturing the country’s successful gaming industry – released its 2023 Global Game Policy and Legislation Study on Tuesday (KST) in collaboration with the Korea Creative Content Agency (KOCCA).Photo by Tingey Injury Law Firm on UnsplashThe report summarizes gaming-related regulations and laws in six Western European countries – the United Kingdom, Germany, Belgium, the Netherlands, Spain and France – including those on standard terms and conditions, the protection of minors, personal privacy, payment and more. "Through cooperation between public and private sectors, we have been able to achieve tasks like collecting information and securing databases on overseas gaming markets by country and continent," said Kang Shin-chul, President of K-GAMES. "We will continue to contribute to the development of the domestic game industry," he added. Regulatory landscapeThe study found that operators in the specified countries are not required to obtain special licenses, appoint local representatives, or set up servers in order to operate a gaming business in their respective countries. It also details country-specific requirements, such as in Germany, where the use of content that glorifies or justifies Nazi-related symbols or actions is prohibited. A closer look at Belgium’s stanceInterestingly, the report revealed that the regulation of randomly distributed in-game items varied by country. The UK, Germany, Spain, the Netherlands and France have no legal restrictions on such items, but the UK and the Netherlands have recommended that information on the odds of winning them in games of chance should be disclosed before a player obtains or opens an item. Meanwhile, Belgium has implemented a regulation that prohibits paid games of chance for stochastic items altogether due to its laws regarding gambling. However, there are no regulations on Play-to-Earn (P2E) games unless they constitute gambling, which is also true of the other five countries. Minting game items into NFTs is also not subject to oversight in all six nations unless they are considered financial instruments. There are also no standard terms and conditions set by Belgium’s national government for gaming services, which are instead governed by the European Union’s (EU) General Data Protection Regulation (GDPR). 

HashKey OTC, the over-the-counter (OTC) trading arm of the Hong Kong-headquartered HashKey Group, has reached a regulatory milestone with the acquisition of a major payment license in Singapore.Photo by Mike Enerio on UnsplashEnabling digital asset service offeringIn a recent announcement via the firm’s official blog, HashKey Group revealed that HashKey OTC has secured in-principle approval from the Monetary Authority of Singapore (MAS) for its Major Payment Institution (MPI) license application. This approval positions HashKey OTC to offer regulated digital payment token services in Singapore, representing a significant stride in the firm’s efforts towards regulatory compliance. CEO of HashKey OTC, Li Liang, emphasized the company's steadfast commitment to regulatory adherence, considering it a pivotal step towards providing comprehensive and regulated over-the-counter trading solutions for its clients. Liang highlighted the significance of the in-principle approval, expressing the company's vision to furnish a wide array of digital payment tokens and fiat currencies in a regulated environment. The approval has generated optimism within the global crypto market community, particularly amidst prevailing uncertainties surrounding crypto regulations worldwide. Expansion initiativesHashKey OTC's attainment of the MPI license aligns with its strategic expansion initiatives, building upon its earlier success in securing a capital markets services license for fund management in Singapore. This achievement reflects the company's desire to operate within legal frameworks while delivering innovative crypto solutions to its clientele. Furthermore, HashKey OTC's regulatory triumph mirrors the broader regulatory landscape in Singapore, where crypto firms navigate stringent requirements to establish credibility and trust within the market. MPI approvalsThe exchange's milestone mirrors similar successes achieved by other industry players. Recent months have seen a raft of digital asset industry enterprises achieve a similar milestone. In January, American digital asset custodian BitGo acquired in-principle MPI approval. Last November, Taipei-headquartered crypto exchange business XREX achieved a similar outcome. Other entities who had been successful in pursuing MPI licensing earlier in 2023 include crypto exchange Upbit Singapore, crypto trading firm GSR, American crypto exchange platform Coinbase and enterprise blockchain firm Ripple. Despite Singapore's reputation as a crypto-friendly jurisdiction, recent decisions by MAS have demonstrated a cautious approach towards certain crypto products. While spot bitcoin exchange-traded funds (ETFs) received approval in the United States, MAS has opted against permitting the listing of such ETF products for retail investors, citing concerns over the asset's volatility and suitability for retail investment. HashKey is one of only two entities to have secured similar licenses in Hong Kong. Last month, affiliate company HashKey Capital, a Singapore-based crypto fund manager, launched a series of indices designed to track cryptocurrencies in a collaboration with FTSE Russell. Also in January, the Hong Kong business partnered with crypto derivatives platform OKX with the objective of advancing compliant virtual asset innovation. HashKey OTC's acquisition of a major payment license in Singapore, amid a backdrop of similar businesses pursuing similar licensing in various jurisdictions recently, signifies a significant advancement in regulatory compliance within the crypto industry. The approval underscores the exchange's desire to provide regulated over-the-counter trading solutions while navigating the evolving regulatory landscape in Singapore and beyond.