Terraform Labs Co-Founder Indicted in South Korea

Animoca Brands Expands Focus to Non-US MarketsHong Kong-based Web3 and blockchain unicorn, Animoca Brands, is shifting its attention to markets outside the United States following the Securities and Exchange Commission’s (SEC) classification of its $SAND token as an unregistered security.This move comes after the SEC named $SAND, along with other tokens like Solana and Polygon, in lawsuits against major exchanges Binance and Coinbase Global. The labeling of these tokens as securities by the SEC poses legal risks for companies involved in their sale.Photo by Zulian Firmansyah on UnsplashNavigating regulatory challengesAnimoca Brands, led by Co-Founder and Chairman Yat Siu, has long embraced a global approach rather than focusing solely on one territory. Siu clarified the firm’s response to the latest regulatory development to the South China Morning Post (SCMP) via email on Thursday.He emphasized that while the SEC concentrates on the US, Animoca Brands operates in more progressive jurisdictions such as Hong Kong and Japan, where $SAND is widely available and accepted. In response to the recent blockchain-hostile climate in the US, the company has proactively started emphasizing other markets, reducing its reliance on the US market and mitigating potential risks associated with regulatory actions.Exchange business impactWhile Coinbase CEO Brian Armstrong has declared that his company has no intentions of delisting tokens labeled as securities by the SEC, this decision poses challenges for other exchanges less committed to selling these tokens. Dan Gallagher, Chief Legal Compliance and Corporate Affairs Officer of Robinhood Markets, expressed concerns about listing tokens due to regulatory rules and the uncertainty surrounding tokens created by organizations outside the US.These developments could have a chilling effect on exchanges, prompting crypto firms to consider moving away from the US market due to perceived uncertainty and the associated legal risks. As a demonstration of that, in a bankruptcy court hearing on Thursday, it emerged that the FTX Debtor is talking with bidders with a view to restarting the international business but restarting the US-based business is less certain.Animoca’s Middle East ventureIn a further display of its commitment to expanding outside the US, Animoca Brands announced plans in March to make significant investments, worth tens of millions of dollars, in the Middle East. This move reflects the company’s proactive strategy to tap into non-US markets and leverage the growth potential offered by progressive jurisdictions.Animoca Brands’ decision to prioritize non-US markets and reduce its reliance on the US market aligns with its global operating approach. The SEC’s classification of $SAND as a security has prompted the company to shift its attention to more progressive jurisdictions where $SAND remains widely accessible.As other firms, including Ripple, also explore growth opportunities outside the US, the global landscape of the crypto industry is evolving. By navigating regulatory challenges and expanding into promising markets, Animoca Brands aims to position itself for continued success and mitigate potential risks associated with the SEC’s actions in the US market.

China Unveils Offline SIM Card Wallet for Digital Yuan PaymentsThe People’s Bank of China (PBoC) has announced a new offline SIM card-based solution for its digital yuan, enabling users to make payments even with their phones switched off.Photo by Sumeet Singh on UnsplashEmbedded hardwareThe innovative initiative was revealed via a social media post on Monday. It aims to reach users with 2G phones who were previously unable to access digital currency.Currently, this feature is only available for Android phone users with NFC functionality, as no details have been given for iOS users or 2G phone owners. This innovation is part of the central bank’s efforts to expand the reach and usage of its digital currency, especially for users with 2G phones who were previously unable to access it.Earlier this year, the PBoC launched a similar solution for smartphone users, using near-field communication (NFC) technology. However, the latest solution relies on hardware embedded in SIM cards, which can act as a “hard” (offline) central bank digital currency (CBDC) wallet.Partnership with telecoms giantsThe central bank’s partners relative to this particular project include major telecom operators China Mobile, China Telecom, and China Unicom, as well as state-owned commercial banks Industrial and Commercial Bank of China and Bank of China, who have also introduced SIM card-based “hard wallet products.” These developments are expected to significantly improve the payment capabilities and network-free functionality of the digital yuan.To use this feature, citizens have to get a “super SIM card” from their carriers. After they have replaced their existing SIM cards and opened the digital yuan app on their phones, they will see an option to “open a SIM card hard wallet.” This will enable them to make touch-based payments to merchants even when their devices are powered off or lack network connectivity.SIM-based wallets are likely to be particularly useful for those using 2G devices or smartphones without NFC capabilities. Considering that about 20% of Chinese mobile users still use 2G phones, it would make sense for the PBoC to continue working in this direction with future updates.Driving adoptionThe ultimate plan of the PBoC regarding SIM-based wallets is not clear yet. However, recent developments, such as the pilot project in Qingdao where CBDC payments were tested on the metro system without electricity or network, indicate a strong push toward increasing the accessibility and adoption of the digital yuan.Frankly, moves to bring about adoption of the e-CNY have been nothing short of relentless. These measures have varied from paying state employees in e-CNY in Changshu, collaborating with French bank BNP Paribas so that its corporate clients start to use the digital yuan and enabling e-CNY bus fare payments on public transport in Jinan.China’s Jiangsu Province has integrated the digital yuan into its education system, while the resort city of Sanya recently introduced e-CNY ATM machines so that foreign tourists have a means through which they can access the digital currency. These developments demonstrate a clear commitment by the Chinese authorities in advancing the rollout of its central bank digital currency.

Korean Supreme Court acquits Dunamu Chairman Song Chi-hyungThe Supreme Court of South Korea, in a significant ruling on Thursday (local time), acquitted Song Chi-hyung, chairman and principal stakeholder of Dunamu, of fraud and forgery charges, according to a report by local news agency Yonhap. This ruling is particularly noteworthy because Dunamu is the operator of the nation’s largest cryptocurrency exchange, Upbit.This decision, led by Justice Oh Kyung-mi, marks the culmination of a legal battle that began with Song’s indictment in Dec. 2018, and it extends to the acquittal of the company’s Chief Financial Officer (CFO) and the head of the Data Value Team, who were jointly indicted.Photo by Tingey Injury Law Firm on UnsplashBackground of the caseSong Chi-hyung and his colleagues were alleged to have fabricated an account on Upbit between September and November 2017. They had been accused of feigning the deposit of assets valued at KRW 122.1 billion and then employing these fictitious funds to enable transactions among actual members.The prosecution also leveled fraud charges against them, claiming that the fabricated account was utilized to sell 11,550 bitcoins to 26,000 members, thereby generating KRW 149.1 billion.The Seoul Southern District Court, acting as the court of first instance, found them not guilty. The court reasoned that the evidence presented by the prosecution was insufficient to establish that the defendants actually deposited the assets in the account.Issues with the prosecution’s evidence gatheringThe Seoul High Court, serving as the appellate court, identified problems with the evidence provided by the prosecution, determining that part of it lacked credibility due to improper collection methods. Notably, the court observed that the prosecution had directed Dunamu employees to access their Amazon cloud server to download the account’s transaction history. However, since this remote server was not included in the search and seizure warrant, the court highlighted the illegitimacy of the evidence.The appellate court also pointed out another issue with the evidence: documents stored on the CFO’s USB drive. The prosecution did not follow the legitimate search process, which requires them to extract only data related to the allegations. Moreover, the prosecutors did not present a warrant when confiscating the laptop of the Data Value Team’s lead, further undermining the credibility of their evidence.The court further stated that even if the remaining evidence provided by the prosecution was considered viable, it was still insufficient to substantiate the prosecution’s accusations.The prosecution, disagreeing with the decision of the appeals court, had escalated the case to the Supreme Court. However, the highest court in the nation sided with the ruling of the appeals court, effectively upholding the decision made at the appellate level.