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Singapore Judge Says Crypto Not MoneyIn recent years, legal processes in various jurisdictions worldwide have seen judges comment on whether cryptocurrency is actually money. The latest such determination has been made by Justice Vinodh Coomaraswamy who outlined in a Singapore court that while being a component of financial transactions, cryptocurrencies are not money.The consideration emerged in a recent court hearing at Singapore’s High Court in a case involving the Algorand Foundation and failed Singapore-based hedge fund, Three Arrows Capital (3AC). Justice Coomaraswamy’s comments arose due to a discussion in the midst of the court proceedings involving the Judge and counsel representing the Algorand Foundation.©Pexels/EKATERINA BOLOVTSOVASeashells as moneyIn setting out his rationale for the need for 3AC to be wound up, Daniel Chan, a lawyer for the WongPartnership law firm that was representing the Algorand Foundation in the proceedings, told the judge that despite foreign currencies not being recognized as legal tender in Singapore, or used broadly as a medium of exchange within the city state, those foreign currencies are recognized by Singapore law as money. Using that analogy Chan suggested that by implication, the same scenario should be considered where cryptocurrencies are concerned.The judge provided a counterpoint: “What if you had a [community] in the world that used seashells as its internal medium of exchange? Would the Singapore courts have to recognize that as money.” Chan claimed that the judge had used an extreme example although Coomaraswamy remained steadfast in his view, pointing out that seashells had indeed been used as a form of money in the distant past.Coomaraswamy proceeded to dismiss the Algorand Foundation’s winding up application. He acknowledged that the Foundation did have standing in bringing the application. However, as he determined that cryptocurrency couldn’t be classed as money, on that basis he dismissed the application. In conveying his decision, he stated: “The word indebtedness, in my view, must require a debt which is in fiat currency. Determining whether or not a particular intangible, such as cryptocurrency, is money would require a detailed examination of evidence which is not appropriate in the context of insolvency.”Legal tenderThus far, bitcoin has been recognized as legal tender in two countries — El Salvador and the Central African Republic. In 2020, a French court referred to the leading cryptocurrency as money, agreeing that Bitcoin loans can be recognized as customer loans in the same way as loans denominated in fiat currencies. Earlier that year, an Australian court recognized bitcoin as a legally legitimate form of investment. In the United States, a Federal court recognized bitcoin as “money” or “funds” in a prosecution taken against Silk Road website operator Ross Ulbricht.There have been many similar instances in courts globally where judges have had to grapple with the consideration of whether bitcoin and crypto more generally can be regarded as money. Similar to the difficulty authorities are having in regulating cryptocurrency, it’s an issue that in most cases lacks complete clarity and in which we can expect further discussions on, similar to this most recent consideration in the Singaporean high court.

Kronos Research experiences significant cybersecurity breachKronos Research, a Taipei-based crypto trading, market making and venture capital firm, has found itself in the crosshairs of a cyber attack.Photo by FLY:D on Unsplash$25.6 million lossHackers gained unauthorized access to the company’s API keys, resulting in losses exceeding $25.6 million spread across various cryptocurrencies, prompting a concern within the crypto community.The breach was detailed by the company in a social media post on the X platform on Saturday. That post read:“In the interest of transparency Around 4 hours ago, we experienced unauthorized access of some of our API keys. We paused all trading while we conduct an investigation. Potential losses are not a significant portion of our equity and we aim to resume trading as soon as possible.”On-chain sleuthingInvestigations by crypto community members have followed, led by blockchain researcher ZachXBT. ZachXBT is a well-known anonymous persona in the crypto space, having earned a reputation for uncovering hacks, scams and unethical practices within the crypto sector.In this instance, ZachXBT uncovered a trail of transactions originating from a Kronos Research account. The meticulous execution of the cyber attack was evident in six transactions involving 2,780 ETH, 2,540 ETH (repeated twice), 2,636 ETH, 4.93 ETH and 2,507.52 ETH, all directed to addresses controlled by the hacker.Kronos Research has followed up with a tweet thread on X, acknowledging the gravity of the situation and confirming losses of approximately $25.65 million in crypto assets. Despite the alarming figures, the company sought to reassure stakeholders by emphasizing that the losses represent a relatively small fraction of its total equity. In a commendable display of accountability, Kronos Research pledged to absorb all losses internally, shielding its partners from the financial ramifications of the breach.The Taiwanese firm posted:“Our team has been working round the clock to minimize the impact and resume trading operations, following a hacking incident that involved unauthorized access to our API Keys.”Implications for Woo XThe operational repercussions were swift and impactful, with Kronos Research opting for a temporary suspension of all trading operations. This decision rippled through to Woo X, the affiliated Taipei-based exchange and liquidity provider created by Kronos, which temporarily blocked specific asset combinations due to liquidity concerns. Importantly, Woo X assured users of the security of their funds and later announced the resumption of spot and perpetual trading.Looking forward, Kronos Research outlined its intention to resume trading operations in the coming days, contingent on favorable conditions.The cyber attack on Kronos Research occurred against the backdrop of heightened cybersecurity concerns within the crypto space. According to blockchain security firm Certik, approximately $173 million was lost to crypto attacks in November alone. The Kronos Research breach follows on the heels of Poloniex’s $131 million hack, highlighting the persistent challenges faced by crypto platforms in securing user assets.

HKMA reflects on retail CBDC pilot phase one completionHong Kong’s Monetary Authority (HKMA), the Chinese territory’s central bank, recently released a report following the completion of phase one of its central bank digital currency (CBDC) pilot, highlighting the potential benefits of a retail CBDC, commonly referred to as e-HKD (digital Hong Kong dollar).Photo by Ruslan Bardash on UnsplashUndecided on full implementationIn a press release published by the HKMA on Monday, the authority clarified that the report underscores that while a retail CBDC could bring value to the payments ecosystem and unlock new economic transaction possibilities, in-depth investigation and evaluation are essential before considering large-scale implementation.At this stage, Hong Kong’s central bank has not committed to introducing an e-HKD, but the report sheds light on the prospects and challenges associated with such a move. The region has been signaling its intent to position itself as a hub for virtual assets, evident in the regulatory framework introduced in June and the granting of licenses to crypto trading platforms in August.Project e-HKD, initiated by the HKMA in 2021, is a significant step toward assessing the feasibility of a digital Hong Kong dollar. The pilot program was launched in November 2022 as part of the HKMA's “Fintech 2025” strategy. However, the HKMA remains cautious, as reflected in the comments of HKMA CEO Eddie Yue earlier this month. Yue told the South China Morning Post that the central bank is still waiting for greater clarity when it comes to the technological, legal and societal aspects of full implementation.Three core attributes identifiedThe report identifies three primary areas where an e-HKD could provide value: programmability, tokenization and atomic settlement. These attributes could lead to faster, more cost-efficient and more inclusive transactions. However, it’s essential to note that the 14 pilot programs conducted with 16 participating firms during phase one were executed on a small scale within a controlled environment.The phase one review highlights that the true potential and prerequisites for implementing an e-HKD on a larger scale depend on market developments and further investigation. It acknowledges that minor issues identified during the pilot phase could become more prominent or even unacceptable in a production environment.Gearing up for phase twoPhase one of the pilot program delved into various aspects, including full-fledged payments, offline payments, tokenized deposits, programmable payments and the settlement of Web3 transactions and tokenized assets. Hong Kong is now gearing up for phase two of the pilot, with plans to explore new use cases for an e-HKD and engage in more focused pilot initiatives. The goal is to understand how the e-HKD can facilitate innovative methods of transacting goods and services while maintaining financial stability.The HKMA’s stance on a retail CBDC places it at the center of a global debate. While the U.S. remains undecided on the issue, with the topic becoming contentious in presidential elections, India has forged ahead with plans for a retail CBDC. Meanwhile, Thailand’s central bank commenced a pilot project for a retail CBDC earlier this year.