BRC-20 token standard architect objects to proposed fork

Paxos scores licensing approval in Abu DhabiPaxos, a New York-based blockchain and tokenization infrastructure platform, has achieved in-principle licensing approvals from the Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority (FSRA).Photo by Kent Tupas on UnsplashEnabling stablecoin issuanceIn a press release published on Wednesday, Paxos outlined that these approvals mark a significant step for the company, enabling it to issue USD and other currency-backed stablecoins while also providing crypto-brokerage and custody services through two regulated ADGM entities.This licensing acquisition comes hot on the heels of a similar outcome in Singapore. Earlier this month, Paxos subsidiary Paxos Digital Singapore Pte. Ltd., received in-principle approval from the Monetary Authority of Singapore (MAS). That approval enables it to offer digital payment token services and issue USD-backed stablecoins within the Southeast Asian city-state.The company, while making efforts to focus on transparency and accountability, aims to extend the global reach of its regulated USD-backed stablecoins upon receiving full approval in Abu Dhabi. Walter Hessert, Paxos’ Head of Strategy, emphasized the importance of regulatory compliance and engagement with authorities to shape digital asset rules, maintaining Anti-Money Laundering (AML) and Know Your Customer (KYC) standards.Hessert stated:”Our IPAs [in-principle approvals] from the FSRA [Financial Services Regulatory Authority], on the heels of our IPA from the Monetary Authority of Singapore, solidify our commitment to pursuing international growth through regulated frameworks. Paxos is unique in the industry for this approach and we will continue expanding our regulatory licensing to serve global enterprises as a trusted, innovative partner.”U.S. regulatory difficultiesIn addition to Singapore and now Abu Dhabi, Paxos already holds approvals from the New York State Department of Financial Services (NYDFS), the local state regulator in New York in the United States. The company’s experience in its home market has been problematic more recently, however.In February, the Securities and Exchange Commission (SEC) issued Paxos with a Wells Notice, a letter that informs the receiver that infractions have been uncovered following investigation. The New York regulator, the NYDFS, also took action against Paxos, claiming that the company didn’t administer BUSD in a safe and sound manner.These actions led to Paxos ceasing to mint any further BUSD stablecoin, and existing BUSD tokens will remain redeemable until at least February next year.Focus on Asia and Middle EastIt’s likely that these regulatory difficulties have led to the company concentrating its effort in 2023 on expanding in overseas markets. Licensing accomplishments in Singapore and Abu Dhabi speak to that.Paxos expressed contentment with MAS as its regulator in Singapore, anticipating that the oversight will accelerate global consumer adoption of digital assets. As the first blockchain service provider to obtain licenses in both New York and Singapore, the company is strengthening its regulatory portfolio globally.This is further evidenced by a recent collaboration the company had formed in the Philippines earlier this month. Paxos has forged an alliance with Coins.ph, a leading cryptocurrency exchange in the Southeast Asian country. The goal of the collaboration is to propel the adoption in the Philippines of PayPal USD (PYUSD), a U.S. dollar stablecoin issued by Paxos.

SEC Seeks to Question Co-Founder of Singapore’s Terraform LabsThe United States Securities and Exchange Commission (SEC) has taken a step forward in its ongoing case against Singapore’s Terraform Labs by seeking to question Daniel Shin, the Co-Founder of the company.The SEC's intention is to gather evidence related to Chai Corporation, a payments company associated with Terraform and the Terra blockchain. District Judge Jed Rakoff granted the SEC’s request earlier this week, which is part of the regulatory body’s efforts to build a case against Terraform Labs and its Co-Founder, Do Kwon. The decision was based upon a motion originally filed in July.Photo by Bermix Studio on UnsplashRequesting South Korean assistanceThe motion, which was granted on Tuesday, allows the SEC to reach out to South Korea for assistance in questioning Shin and obtaining documents related to Chai Corporation. The regulatory body aims to gain insights into Kwon’s role at Chai, the utilization of the Terra blockchain by Chai, and the disclosures made by Chai regarding its relationship with Terraform.Additionally, the SEC is interested in understanding the reasons behind Chai’s separation from Terraform, as the two companies shared offices and staff until their split in 2020.No opposition filedOn a previous occasion, Kwon unsuccessfully challenged the SEC's attempt to access company records on the basis of a lack of jurisdiction given that Terraform is a Singapore-domiciled company. In June, both Terraform and Kwon attempted unsuccessfully to have the entire action thrown out.On this occasion neither Terraform Labs nor Kwon have opposed the SEC’s motion. In fact, they have even included their own set of questions and document requests. Both the Singaporean firm and its Co-Founder have denied the SEC’s allegations, which were filed earlier this year.The SEC’s lawsuit claims that Terraform’s cryptocurrencies, specifically Terra Luna Classic (LUNC) and Terra ClassicUSD (USTC), were involved in fraudulent activities. The US regulatory body further alleges that Kwon and Terraform falsely promoted the use of the Terra blockchain by Chai for processing and settling transactions.The SEC’s lawsuit also accuses Terraform and Kwon of fabricating transactions involving TerraKRW (KRT), a Korean won-pegged stablecoin, to give the impression that Chai was actively utilizing the Terra blockchain.Collapse falloutTerra, an interconnected crypto ecosystem, faced a collapse in May 2022, resulting in the loss of approximately $40 billion in value and impacting the wider cryptocurrency market. The aftermath of this collapse led to legal actions against individuals associated with Terraform Labs. South Korean prosecutors, for instance, charged Shin with multiple fraud offenses in April, alleging that he had concealed the risks of investing in Terraform’s cryptocurrencies.Kwon’s legal situation is equally complex. He is currently serving a prison sentence in Montenegro for attempting to leave the country using a fake passport. He faces criminal charges in both the United States and South Korea, and both countries have requested his extradition.The ongoing investigation sheds light on the intricate relationships within the Terra ecosystem, having an impact across different jurisdictions. As legal proceedings unfold, the outcome will likely have implications for the regulation and oversight of cryptocurrency and blockchain projects internationally.

American digital asset prime brokerage FalconX has unveiled its strategic expansion into Hong Kong, doubling down on its growth within the Asia-Pacific (APAC) region.Photo by Chapman Chow on UnsplashOTC brokerage servicesThe move, announced by the company through the release of a statement on Thursday, represents the firm’s latest stride in pursuing a global expansion strategy. In February 2023 the company announced that it was establishing its APAC headquarters in Singapore. FalconX intends to provide tailored over-the-counter (OTC) brokerage and OTC virtual asset derivatives services to professional investors in Hong Kong, including proprietary trading firms, family offices and fund managers. Leading the charge in this expansion is Belle Leung, who assumes the role of commercial lead in Hong Kong. Leung brings a wealth of experience from her previous position as head of SaaS sales for digital assets at OSL in Hong Kong. Her primary focus will be on raising awareness of FalconX’s offerings within Hong Kong's rapidly expanding institutional Web3 community.Leung expressed enthusiasm for Hong Kong's proactive regulatory approach, noting the strong market certainty it has generated. She emphasized FalconX's support for and alignment with the regulatory landscape. This expansion aligns with ongoing efforts by Hong Kong regulators to shape a conducive environment for virtual assets and related products, thereby providing market certainty and fostering innovation. The recent guidelines set by Hong Kong's regulators aim to align the region’s regulatory framework with international best practices, positioning it as a leading global center for digital asset innovation and investment. Executing an expansion strategyThe company is likely to have been planning its Hong Kong expansion for some time. Earlier this month, FalconX confirmed that it would be expanding its APAC operations. In November, the company was actively recruiting to fill Hong Kong-based positions. That same month, FalconX announced a partnership with Bullish, a digital assets exchange with 110 employees in Hong Kong. As part of that integration, the prime broker gained access to further digital asset liquidity on the Bullish platform.In its home market in the United States, the company has also been furthering its market influence. With spot bitcoin exchange-traded funds (ETFs) having been approved in the U.S. in January, FalconX executed over 30% of all bitcoin creation transactions for ETF issuers on the first day of trading. Matt Long, FalconX's APAC general manager, underscored the pivotal role of Hong Kong in the virtual asset innovation landscape, noting its historical significance as a hub for such innovation. He emphasized the region's leadership in the market with a clear focus on Web3 technologies. Long expressed FalconX's commitment to global growth and confidence in Hong Kong's progressive stance on virtual asset regulation and its leading position in the Web3 ecosystem. FalconX's expansion into Hong Kong follows its recent strategic moves in the Asia Pacific region, including the appointment of Ivan Lim as Trading Manager, APAC derivatives, based in the firm’s Singapore office. These developments underscore FalconX's intention to expand its footprint in the region and cater to the evolving needs of institutional investors in the digital asset space.