Fraud Defense Sees Terraform Labs Pursue Access to FTX Wallets

Crypto Titans Clash on Elon Musk’s XA subtle panel discussion photo posted by Andrei Grachev of Singapore’s DWF Labs turned into a war of words among crypto trading titans on Elon Musk’s X (formerly Twitter).Photo by Marek Piwnicki on UnsplashDWF vs GSRGrachev, who is a Managing Partner at the market maker and Web3 investment firm, thanked his fellow panelists in the post. However, the tone quickly soured as Cristian Gil, Co-Founder of rival market-making giant GSR, took offense to Grachev’s presence on the panel and voiced his disapproval on the platform.Gil didn’t mince his words, stating: “[Andrei Grachev] had absolutely no business to be on that panel. It’s insulting to [GSR] , [OKX] and [Wintermute] to be in the same room as [DWF Labs].”DWF vs WintermuteHis remarks received a “Like” from Evgeny Gaevoy, the CEO of market maker Wintermute. In response, Grachev defended his presence, asserting that DWF was superior in technology, trading, and business development compared to its rivals, going so far as to suggest to Gil: “Yeah, if I were you — I would be also crying all the time.”The exchange continued with Grachev claiming that DWF was capturing market share from Wintermute, and Gaevoy responded with a nonchalant “lol,” challenging Grachev to invest more if he believed DWF posed a threat.DWF Labs’ rapid growthWhile the exchange consisted of mere words, it shed light on DWF Labs’ sudden rise to prominence earlier over recent months. The company has featured prominently in an array of investments in Web3 startups and blockchain networks over the course of 2023. Prominent among them have been investments in EOS, the Algorand ecosystem, and the TRON ecosystem.Recently appearing on the BlockBeats podcast, Grachev defended the company, outlining that it was not involved in market manipulation in response to recent assertions to the contrary.“We do not engage in any manipulative behavior,” Grachev stated. “Of course, we have the futures market, which is a tool for hedging positions and trading clubs. We are completely different from directional traders,” he added.Gaevoy added some humor to the mix by sharing a meme, raising questions about the maturity level of these prominent figures in the crypto industry. The spat provoked a broad array of commentary from the crypto community.Crypto immaturityThe very public clash raises concerns about how traditional Wall Street firms, currently making bold moves into the crypto space, might perceive such behavior. Notably, firms like BlackRock have been involved in Bitcoin ETF applications, signaling a growing interest in cryptocurrency among mainstream financial institutions. In response to Gaevoy and Grachev, one commentator wrote: “The institutions are never coming back.”While it would appear that there’s no love lost between DWF, GSR, and Wintermute, it also seems evident that both market makers can agree on Singapore as being an appropriate location from where to operate a crypto business. While Wintermute is London-based, it revealed recently that it was expanding its operations in Singapore. Like Wintermute, GSR is primarily based in London although it too maintains a presence in Singapore to service Asia-centric business.

Abu Dhabi Puts Forward Legal Framework for Decentralized TechAuthorities in Abu Dhabi, the capital of the United Arab Emirates (UAE) as well as an individual emirate within it, have published a proposed legislative framework for distributed ledger technology.©Pexels/redouan khoulassiThe consultation paper, titled “Proposal for a legislative framework for distributed technology foundations” was published earlier this month by the Abu Dhabi Global Market’s (ADGM) Registration Authority.Promoting investor protectionThe document covers a broad spectrum of aspects relative to digital assets and crypto entities, including corporate governance, insolvency and restructuring considerations, and data protection. The ADGM’s objective with the proposed policy is to advance investor protection, improve market integrity and efficiency, and build towards a comprehensive regulatory framework.Specific proposalsMore specifically, the policy would implicate an enhancement in the protection of whistle-blowers who report misconduct relative to ADGM-regulated companies. Under the proposal, new rules would be introduced to ensure that digital asset platforms operate in a fair and transparent manner. A requirement would be placed on regulated companies to disclose detailed information in relation to beneficial ownership and control structures. Furthermore, the policy seeks to bring about an improved dispute resolution process between the stakeholders involved in ADGM-regulated transactions.Building upon an existing frameworkThe Abu Dhabi regulator’s current legal framework is built upon English common law. It has its own financial services regulator, the Financial Services Regulatory Authority (FSRA) which operates independently and is responsible for supervising and licensing financial institutions and market participants. The FSRA takes a principles-based approach, regulating those market actors attempting to maintain financial stability and integrity, promote market competition and innovation and ensure customer protection.ADGM has sought to act on an international basis by signing agreements with regulatory bodies in the UK, Hong Kong and Singapore, in an effort to enable information sharing and cross-border cooperation.Regulatory activityAt a national level, earlier this year the UAE enacted a digital assets regulatory framework. Earlier this week, the UAE also revealed a federal licensing system for crypto companies. In February, work began on a $2 billion initiative to nurture blockchain and Web3 startups via Hub71, the emirate’s tech ecosystem. The initiative provides startups with access to a broad range of support services as well as potential collaborations with government and investment partners.According to the document, “this Consultation Paper is of interest to any persons operating or planning DLT projects, persons engaging in digital asset-related activities and their legal advisors, as well as DLT participants, associations, and stakeholders.”With that, the ADGM is inviting comments and feedback from members of the public on the proposed changes contained within the consultation paper. To aid public comment, the policy document includes a number of questions that it invites stakeholders to consider as they work towards submitting their feedback.Those interested have until May 12 to take the opportunity to submit their comments and views relative to the Abu Dhabi regulator’s proposed framework.

Japanese cabinet approves crypto tax reformThe Japanese government has green-lit an amendment to its fiscal 2024 tax reform plan, specifically targeting the taxation of companies holding third-party-issued cryptocurrencies.Photo by Louie Martinez on UnsplashIntroducing tax exemptionAccording to local news sources, this amendment brings about a crucial change by exempting such companies from the year-end mark-to-market valuation tax.The Fiscal Year 2024 Tax Reform Outline, now approved by the Japanese cabinet, marks a departure from the previous tax regime. Under the new framework, companies holding crypto assets will no longer be subjected to mark-to-market valuation at the end of the fiscal year. Instead, they will be taxed solely on the actual profits realized from the sale of virtual currencies and tokens.Alleviating the tax burdenThe primary motivation behind this amendment is to alleviate the tax burden on corporations engaged in the holding and operation of crypto assets. Previously, corporations holding third-party-issued cryptocurrencies were required to record profits or losses based on the difference between market value and book value at the end of the fiscal year. The new reform, however, exempts assets assumed to be held continuously from this mark-to-market valuation.News of moves to implement such reform emerged at the beginning of December. At the time, a report by Nikkei Asia suggested that Japanese lawmakers were working towards addressing issues related to crypto taxation. Japanese regulator, the Financial Services Agency (FSA) had first proposed such changes to the tax code via a 16-page submission on Aug. 31.Signaling investor-friendly approachThis policy shift aligns the taxation of companies with the tax system applicable to individual investors, signaling a more investor-friendly approach. Lawmakers from the Liberal Democratic Party and their coalition partner Komeito had reportedly considered a proposal to exempt corporations from taxes on unrealized crypto gains. This move is seen as Japan’s effort to boost liquidity in the market, putting it in line with other Asian regions striving to become prominent centers of crypto activity.The amendment, influenced by the Japan Cryptoasset Business Association’s (JCBA) call for tax reform, is anticipated to stimulate the growth of local startup businesses utilizing blockchain technology and attract international projects to the Japanese market.The proposal is set to be presented at the regular session of the National Diet (Japan’s national legislature) in January of the upcoming year, where it will require approval from both the House of Representatives and the House of Councilors.Notably, the Fiscal Year 2024 Tax Reform Outline encompasses a broader spectrum of economic policies, including a plan to reduce income tax and resident tax by 40,000 yen per person from June 2024 onwards.News of the crypto tax reform has been well-received by most industry commentators and market participants. Daiki Moriyama, Director of Singapore-based gaming blockchain project Oasys, reacted positively to the development. He told The Block:“The fact that the Japanese government has demonstrated its willingness to grow Web3 business by enacting tax reform for the second year in a row is extremely important to all Web3 business stakeholders around the world.”