Top

Do Kwon Loses Fight to Conceal Singapore Records

Policy & Regulation·April 20, 2023, 6:00 AM

Do Kwon, the founder of Terraform Labs has failed in his attempt to deny the United States’ Securities and Exchange Commission (SEC) from accessing company records in Singapore.

chess figures
©Pexels/George Becker

In February, the SEC filed a complaint against Terraform Labs and its founder in a US court. The move followed an investigation that the agency had carried out into the collapse of a number of digital assets established by the company. The lawsuit claims that both the company and Do Kwon had engaged in fraud, together with the sale of unregistered securities to US citizens.

 

Jurisdictional challenge

Lawyers for Do Kwon had claimed that in trying to access documents related to the Singapore-domiciled company, the SEC was acting far beyond its jurisdiction. According to court filings, his defense team argued that Do Kwon is a Singapore resident while Terraform Labs is a Singapore-based company that operates on a global basis and not specifically in the United States.

The filing pointed to the fact that the Terraform Labs CEO had “limited contact with the US.” “Most of the company’s business is essentially global, and it’s not specifically aimed at the United States,” it stated.

His lawyers had filed a request for the SEC to withdraw its documentation request. In a recent hearing, US District Judge Jed Rokoff turned down Terraform’s request. The documents are understood to be held by the Monetary Authority of Singapore (MAS) although the specific nature of the documentation sought remains unclear.

The SEC claims that in founding the Terra US dollar stablecoin (TUSD) and associated cryptocurrency LUNA, Terraform Labs and Do Kwon were responsible for wiping out more than $40 billion dollars in value following their collapse. The Luna Foundation Guard (LFG), which was established to provide funds to keep the TUSD stablecoin at a $1 value, is another entity that the SEC intends to access documents from with the court’s permission. Singaporean police had stated last month that they had launched an investigation into the collapse of the TUSD stablecoin.

Meanwhile, both the South Korean and US authorities are seeking the extradition of Do Kwon to face related charges. He was arrested last month in the southeastern European country of Montenegro where he was charged with having used forged documentation to enter the country. Although he had denied it on social media, in effect Do Kwon had been on the run from the reach of South Korean authorities over the course of a number of months, spending a portion of that time in Montenegro.

 

Asset hunt

An investigation by authorities in South Korea in recent weeks revealed that they were unable to find any assets held in the country owned by the Terraform Labs founder. The trail in chasing down any such assets has led to the United States. It is understood that Do Kwon bought real estate in the United States under his mother’s name. This is a common tactic for those who attempt to evade future confiscation of assets.

Earlier this week, South Korean prosecutors confirmed that they are investigating a transfer of funds by Do Kwon to a leading law firm based in Seoul.

More to Read
View All
Policy & Regulation·

Dec 13, 2023

Dubai approves crypto license for climate-friendly Web3 startup

Dubai approves crypto license for climate-friendly Web3 startupIn a move that shows some potential towards fostering sustainable innovation within the crypto space, Dubai’s Virtual Assets Regulatory Authority (VARA) has granted a conditional license to Web3 Innovations FZE, which trades as “AYA.”Licensed subject to fulfilling conditionsAYA is the Dubai-based subsidiary of Singapore-headquartered Web3 launchpad, incubator and advisory service, Enjinstarter. The license will enable AYA to offer management and investment services related to crypto assets. However, the license remains non-operational at the moment, as it has been awarded subject to the fulfillment of specific conditions outlined by VARA. The conditional license, awarded on Tuesday, has significance as it is indicative of a commitment from the Dubai authorities to supporting environmentally conscious initiatives in the Web3 ecosystem.The license awaits full compliance with VARA’s stipulated conditions and select localization requirements. Enjinstarter’s AYA platform will undergo further regulatory verification and approval once these prerequisites are met, as stated in the official announcement:“The license remains non-operational until the company fully satisfies all remaining conditions and select localization requirements defined by VARA.”Dubai ‘obvious choice’Back in October, Enjinstarter confirmed Dubai as the chosen location for its AYA platform. At the time, Enjinstarter MENA’s Managing Director, Vasseh Ahmed, described it as the “obvious choice.” Vasseh stated:”No other jurisdiction provides the regulatory clarity and sustainability focus we are looking for. Beyond that, there is a palpable sense of action here, specifically in terms of real-world asset regulation and climate action.”Prakash Somosundram, the co-founder and CEO of Enjinstarter and the AYA Foundation, expressed the company’s dedication to adhering to the regulatory process outlined by VARA.Photo by Qingbao Meng on UnsplashClimate-focused launchpadAYA stands out as a climate-focused launchpad, championing sustainability through initiatives such as reforestation, nature credits, mangrove conservation and sustainable agriculture. Beyond its role as a finance platform for green initiatives, AYA actively supports climate action projects, leveraging blockchain and Web3 infrastructure.As AYA works towards fulfilling VARA’s operational license requirements, the company has also unveiled a collaboration with The Storey Group based in the United Arab Emirates (UAE). This joint effort aims to plant mangroves in Dubai, reinforcing AYA’s commitment to combating climate change. Vasseh Ahmed, Managing Director of Enjinstarter MENA, emphasized the company’s mission:“We are looking to work with founders and projects that have a unique proposition within our key focus areas by helping them build their product narrative, raise capital, and launch their projects.”In a recent interview, Deepa Raja Carbon, Managing Director and Vice Chair at VARA, highlighted the regulator’s agile and collaborative approach. VARA remains committed to responding swiftly and effectively to market needs by engaging in conversations with industry leaders, innovators, peer regulators and legislators. Carbon emphasized the comprehensive and market-aligned guidelines crafted in collaboration with Dubai’s established entities, ensuring a unified framework for the evolving crypto landscape.Dubai’s move to grant a conditional crypto license to AYA appears to reflect a forward-thinking approach, aligning with global efforts to integrate sustainability into the rapidly evolving Web3 and crypto ecosystem.

news
Policy & Regulation·

Jan 12, 2024

South Korea’s top asset manager halts trading for bitcoin ETFs

Mirae Asset Securities, South Korea’s largest asset management firm, has begun suspending trading for bitcoin ETFs, according to industry sources on Friday. This comes after an announcement made by the Financial Services Commission (FSC) stating that brokering spot bitcoin ETFs may be considered a violation of the government’s stance on virtual assets and the Financial Investment Services and Capital Markets Act.Photo by Dmytro Demidko on UnsplashTaking preemptive measuresThe asset manager has blocked new purchases of spot bitcoin ETFs listed in Canada and Germany starting yesterday and is considering suspending trading of bitcoin futures ETFs that have been listed in overseas markets since 2021. This includes the Proshares Bitcoin Strategy ETF, Valkyrie Bitcoin Strategy ETF, Invesco Galaxy Bitcoin Strategy ETF and VanEck Bitcoin Strategy ETF. As Korean financial authorities are putting the brakes on domestic investments in the recently approved spot bitcoin ETF by the U.S. Securities Exchange Commission (SEC), it is believed that Mirae Asset Securities is putting a preemptive halt to trading in other bitcoin ETFs. Spot vs futuresSpot bitcoin ETFs differ from futures ETFs in that they track the price of Bitcoin by actually holding the cryptocurrency, while the latter tracks its price through futures contracts. South Korean securities firms have been brokering futures ETFs listed in overseas market for a while now.

news
Web3 & Enterprise·

Aug 22, 2023

Wiziin Earmarks $500K Pre-Seed Funding for Blockchain Investment

Wiziin Earmarks $500K Pre-Seed Funding for Blockchain InvestmentWiziin, a Vietnamese startup specializing in venture investment management, has secured $500,000 in pre-seed funding, which it plans to use to accelerate its efforts in blockchain technology investment.Photo by Peter Nguyen on UnsplashBroad networkAt the heart of Wiziin’s primary objective — to bridge the divide between investors and founders — lies the firm’s blockchain-based platform. The Wiziin platform is specifically tailored to venture investors with a focus on digital assets.Wiziin is headed up by venture capitalist Tien Nguyen and serial entrepreneur Thong Dang. The firm was established in 2020, with a view towards playing a part in what it foresees as a revolution in investment dynamics, particularly within the Asia Pacific (APAC) region. The company’s network encompasses more than 200 investors and an array of over 5,000 raised-fund companies. The company believes that this positions it to become a transformative force in the investment landscape within the region.“The established norms of venture capital funding have long followed conventional methodologies,” commented Thong Dang, Wiziin Co-Founder. “This infusion of funding serves as a catalyst for our ongoing endeavors in emerging blockchain technology, with the ultimate aim of disrupting and revolutionizing the industry. Tokenization of assets and the integration of smart contracts will form the bedrock of our innovative approach to venture capital,” he added.Homerun.clubCentral to Wiziin’s trajectory is the development of an investment platform named “Homerun.club.” This platform is engineered to foster co-investment experiences within blockchain ecosystems for individual investors.Through the elimination of intermediaries, Wiziin is striving to democratize funding access, unleashing global empowerment for entrepreneurs and inviting a more diverse spectrum of investors.The universality of blockchain technology shatters geographical limitations, enabling start-ups like Wiziin to bring investors and entrepreneurs together from every corner of the globe. This holds profound potential for startups and investors situated in expanding markets, and markets that have historically been underserved by conventional approaches to venture capital funding and investment.“While our platform operates within a decentralized framework, the importance of user verification cannot be understated, serving as both a regulatory compliance measure and a safeguard for investor interests,” elaborated Thong Dang.Dang added: “In tandem, we’re actively seeking institutional funding in the upcoming months to further fortify the platform. This strategic step will usher in a collaborative fundraising endeavor between our project and its vibrant community, fostering mutual growth and resounding success.”DAOs and start-up fundingWiziin’s approach is just one element in the ongoing shift towards blockchain-based start-up finance innovation. Many in the crypto space have also put forward DAOs or decentralized autonomous organizations, as an agent for further disruption in this area.DAOs also leverage blockchain technology, and their use can be helpful in cutting conventional venture capital firms out of the enterprise funding process. Furthermore, they can be used to cut through unwieldy regulation relative to start-up funding.With the conventional approach to start-up finance, only accredited investors gain access to early-stage opportunities. Individual investors, regardless of their net worth, can participate in a DAO-based approach to financing. The approach facilitates broader inclusion while having the effect of increasing liquidity as well.

news
Loading