Chinese state publication calls for crackdown on crypto

Academia, Industry Collaborate on Crypto Accounting Research in KoreaThe Korean Accounting Association (KAA) and Samil PwC, the South Korean member firm of global accounting company PwC, have joined forces to conduct collaborative research on accounting for cryptocurrency assets, according to a report by local news outlet Maeil Business Newspaper.Photo by Pixabay on PexelsCollaborative effortsUnder this newly formed partnership, the KAA’s crypto asset committee will work closely with Samil PwC to explore a wide range of crypto assets, facilitate the development of financial statements pertaining to these assets for businesses, and implement accounting policies that align with the characteristics of cryptocurrencies.Leading the crypto asset committee is Roh Hee-chun from Soongsil University, while Partner Lee Jae-hyeok from Samil PwC will participate in the study. Until 2028, this collaboration is poised to yield insights and findings on crypto asset accounting.First seminarThe committee is set to hold its first seminar on June 27, serving as a platform for knowledge exchange and fostering deeper understanding among industry professionals. Furthermore, the accountants involved anticipate publishing a paper in an academic journal next year.PwC’s Assurance Leader Oh Kee-won emphasized the accounting firm’s commitment to leveraging its extensive resources in order to produce outcomes that positively impact society.Meanwhile, KAA President-elect Kim Gap-soon highlighted the relative novelty of crypto asset accounting, acknowledging that there is much ground to be covered. The association aims to establish a solid foundation that offers optimal guidance in the field of crypto asset accounting.

Terraform Labs Accuses Citadel Securities of Stablecoin SabotageTerraform Labs, the bankrupt Singaporean blockchain firm, is pointing fingers at American market maker Citadel Securities, alleging that it played a role in an orchestrated effort to destabilize Terraform’s TerraUSD (UST) stablecoin back in May 2022.In its pursuit of justice, Terraform Labs has now called upon the United States District Court in the Southern District of Florida to compel Citadel Securities to furnish vital documents concerning their trading activities during that critical period, when the stablecoin underwent a depegging crisis, now referred to as TerraUSD Classic (USTC).Photo by Tingey Injury Law Firm on UnsplashAllegations of intentional destabilizationThat’s according to a motion filed by Terraform in the United States District Court in the Southern District of Florida, earlier this week. As alleged by Terraform Labs, the catastrophic depegging event in May 2022, which saw UST plummet from $1 to a mere $0.02, was not solely due to inherent instability in the algorithm supporting the UST stablecoin. Instead, the firm contends that it was a result of the deliberate and collaborative actions of specific third-party market participants who engaged in “shorting” to trigger the depegging.Terraform stated in its motion:“Movant [Terraform] contends that the market destabilization that occurred did not result from instability in the algorithm underlying the UST stablecoin. Instead, Movant contends that the market was destabilized due to the concerted, intentional effort of certain third party market participants to ‘short’ and cause UST to depeg from its one dollar price.”The motion also alludes to “publicly available evidence” hinting at Citadel’s intention to short the stablecoin at the time of the depegging event. In particular, it references a Discord channel chat screenshot where a pseudonymous trader purportedly had a conversation with Citadel head Ken Griffin. Griffin allegedly remarked:“They were going to Soros the f*** out of Luna UST,” seemingly drawing a connection to George Soros’ trading strategies, which often involve highly leveraged, one-way bets.Citadel refuted allegations previouslyNotably, Citadel Securities has previously refuted allegations of trading the TerraUSD stablecoin in May 2022, according to Forbes.In its motion, Terraform refers to the importance of these documents for its defense in a lawsuit filed by the US Securities and Exchange Commission (SEC) in February. The SEC lawsuit alleges that Terraform Labs and its founder, Do Kwon, played a significant role in orchestrating a multi-billion dollar cryptocurrency securities fraud.The motion concludes with Terraform arguing that its defense would be substantially hampered if Citadel Securities were to successfully withhold the requested information. In the event that the court fails to compel Citadel, Terraform has requested that the matter be transferred to the US District Court for the Southern District of New York.The matter has been the subject of debate within the crypto community in recent months. In May a community member stated:“As I’ve been saying. People blamed Citadel et al. This was nothing but a rug pull. Wake up. Do Kwon says the dissolving of Terraform Labs in Korea days before the $LUNA and $UST crash is ‘purely coincidental.’”With the matter now being raised in the courts, it looks like the legal system will be the final adjudicator regarding the issue.

The long-awaited approval of spot bitcoin exchange-traded funds (ETFs) in the U.S. on Tuesday is anticipated to have a more substantial impact on the development of cryptocurrencies in Asia. That’s the view of Yat Siu, the co-founder of Animoca Brands, a Hong Kong-based crypto venture capital and game software firm. The U.S. Securities and Exchange Commission's (SEC) approval is expected to attract new capital to the crypto industry, providing a safer avenue for the crypto-curious.Photo by André François McKenzie on UnsplashPotential for surge of interest in AsiaIn an interview with The Block, Siu emphasized the positive effect on Asia, attributing it to the region's regulatory clarity and the willingness of governments and regulators to build a crypto ecosystem. Strengthening regulatory oversight was a finding of a recent report relative to a number of Asian hubs. Industry leaders believe that the approval of spot bitcoin ETFs in the U.S. could lead to a surge of interest in Asia, where crypto adoption is already higher than in other continents. The perception of cryptocurrencies as investment assets, rather than just for transactions, might shift in the Asian market, with the ETF offering a regulated and lower-risk avenue for investment exposure. Additionally, Yat Siu noted that Asian investors, particularly the younger generation, have a more open view towards capitalism compared to their U.S. counterparts. In a recent interview with CNBC, Australian venture capitalist and founder of MHC Digital Group, Mark Carnegie, also expressed the opinion that the digital asset markets in Asia would flourish once the hype of the U.S. ETF approval has subsided. ETF focus on Singapore and Hong KongPost the U.S. approval, attention turns to Asia, with Hong Kong and Singapore emerging as potential candidates for introducing spot crypto ETFs. Hong Kong, in particular, has undergone regulatory renewal, positioning itself as a crypto hub, with it reportedly already attracting interest from fund managers, including those backed by Chinese capital, looking into launching spot crypto ETFs. Yat Siu alongside Glenn Woo, Head of Sales of APAC at Web3 infrastructure company Blockdaemon, were both positive in their assessment of Hong Kong as a worthy location for the offering of spot bitcoin ETFs in comments made last month. In November, the CEO of Hong Kong’s Securities and Futures Commission (SFC) indicated an openness to considering proposals for spot crypto ETF products aimed at retail investors. Singapore, known for its mature regulatory environment, is also considered a strong contender. Meanwhile, Japan may witness significant regulatory movement following the U.S. ETF approval. However, challenges and variables remain for Asia. The scale of capital inflows in Asia, compared to the U.S., and the caution of regulators in the face of crypto industry volatility and trust issues are cited as potential hurdles. Some experts suggest that Hong Kong and Singapore may initially be cautious in encouraging retail participation in virtual asset investments due to previous losses experienced by residents. Still, in the medium to longer term, increased interest and appetite for virtual assets are expected.