Author: Staff

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Business

South Korean authorities seize $160M in assets tied to Terra employees

The Seoul Southern District Prosecutor’s Office has reportedly confiscated roughly $160 million worth of assets from eight people connected to the collapse of Terraform Labs, including co-founder Daniel Shin.

Authorities reportedly seized assets linked to former Terra employees worth about 210 billion won ($160 million), primarily in the form of real estate, according to a report from local news outlet KBS. 

Prosecutors reportedly took control of houses and properties owned by former Terra Vice President Kim Mo and an unnamed executive worth roughly $60 million and $31 million, respectively.

Commenting on this, the spokesperson for the persecution team stated, “We are still investigating the property ownership status of the suspects, and we plan to carry out collection preservation for the confirmed property in the future in order to recover the proceeds of crime and recover damages.” 

The prosecutors’ actions were reportedly aimed at preventing former Terra employees from disposing of assets in an attempt to ensure they were part of potential criminal proceedings.

In November, authorities took similar measures by seizing Shin’s home in Seoul, but are reportedly still investigating other assets allegedly connected to the Terra co-founder. No South Korean court had authorized an arrest warrant for Shin at that time. The report also did not mention any crypto assets seized as part of the investigation.

After months without definitive public knowledge of his whereabouts following the collapse of the platform, Terra co-founder Do Kwon was arrested in Montenegro in March. Montenegrin Justice Minister Marko Kovač announced on March 29 that the local government had received requests from both the United States and South Korea regarding taking Kwon into custody.

Categories
Technology

Worldcoin Launches An AI Iris Dependant ID Protocol

Worldcoin, a cryptocurrency token project that was co-founded by Sam Altman, co-founder of Openai, has launched World ID, an AI-resistant protocol that will allow the verification of the identity of humans online through an iris scan. The protocol uses zero-knowledge proofs in connection with biometric data provided by the irises of the users. 

The project, which mentioned this launch enables a nongovernment universal basic income (UBI) obtained through AI means and distributed via digital currencies, argues that the rise of AI models that can pass or almost pass the Turing test determines the need for more innovative protocols to determine the humanness of a being.

According to Worldcoin, the protocol will be private, self-sovereign, and decentralized, allowing users to have control over the utilization of their id data, while protecting the distribution of resources.

“Through the Proof of Personhood (PoP) credential, the World ID protocol empowers everyone to prove their humanness online without requiring a third party. The protocol leverages zero-knowledge proofs to maximize privacy and will eventually be governed by the people through World ID itself,” Worldcoin further states on its website.

The protocol, which also launched its software for builders to start experimenting with it, states that it will offer its service as a public utility, enabling its usage by giving ownership to individuals irrespective of nationality or background and accelerating the transition to a future that welcomes and benefits every person on the planet.

Due to the biometric approach of the protocol, a new hardware device had to be constructed. In partnership with Tools Of Humanity, a tech company, Worldcoin has introduced an iris-scanning device called the orb, which will be needed for the effective implementation of World ID.

The orb is an open-source hardware device designed to capture the iris of the users of the World ID protocol, which took years in the making per Worldcoin remarks. The device features two cameras, a wide-angle camera and a telephoto camera, which work in combination with a neural network to capture a high-resolution image of the Iris.

According to Worldcoin, so far, more than 1.4M people have participated and if successful, the AI protocol will become the largest network of real humans on the internet, accessible to all as a public good.

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Business

Trump NFT sales skyrocket after news of his indictment

Following news of a New York Grand Jury voting to indict former president Donald Trump last week, the floor price for the officially licensed Trump Digital Trading Cards nonfungible token (NFT) project has skyrocketed.

According to data from OpenSea, NFT traders were seemingly spurred into action by the announcement, with the floor price moving from 0.46 Ether or $835 at current prices, to as high as 0.6 ETH ($1090) on the same day.

When the project launched in December 2022, it offered exclusive one-on-one experiences to certain NFT hodlers, such as private golf sessions, dinners, and conversations with Trump.

The indictment news could potentially impact the former president’s ability to deliver on the experiences. 

At the time of writing, the floor price has since dropped back to around the 0.48 ETH range. 

Furthermore, according to a recent report from blockchain analytics platform DappRadar, NFT sales are soaring after hitting $4.7 billion worth of NFT trading volume in Q1 2023. According to the blockchain platform, this is more than double that of the previous quarter.

The firm pointed to bullish action from the Blur marketplace, which took the market by storm during its token airdrop farming period in February. The $4.7 billion came from 19.4 million NFT sales in Q1, marking an increase of 8.56%, with total volume increasing by 147% compared with the $1.9 billion posted in Q4 2022.

The Ethereum network accounted for a whopping $4.1 billion worth of the volume, with second-placed Solana contributing $242 million, while Polygon ranked third with $85 million for the quarter.

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Business

Court Denies Arrest Warrant for Terraform Co-Founder Daniel Shin

The Prosecutor’s Office sought the pre-trial detention of Shin Hyun-seung, also known as Daniel Shin and a co-founder of the failed blockchain company Terraform Labs, but the Seoul Southern District Court denied the request. The company’s cryptocurrencies, Luna and the stablecoin TerraUSD, are thought to have been significantly impacted by his actions.

The court rejected Shin’s arrest warrant for a second time on Thursday, citing the fact that it is unlikely that he will flee or obliterate evidence, according to a report from the Yonhap news agency. The crypto entrepreneur is being investigated for illegal profits made before the coins crashed last year.

In November, prosecutors sought an arrest warrant for Shin, but the court denied their request.  Following the arrest of Do Kwon (Kwon Do-Hyung), another of Terraform’s founders, last week, they reissued the warrant.

When Kwon tried to board a flight for Dubai, he was stopped in Montenegro.  His extradition is being sought by South Korean authorities, which could take some time. He will first go on trial in the Balkan country for traveling with a fake Costa Rican passport, according to his Montenegrin attorney and the justice minister of the state.

Daniel Shin is accused of several fraud-related offenses as well as breaking regulations pertaining to information, financial transactions, and capital markets in South Korea. He is suspected of storing pre-issued luna, obtaining 140 billion won (almost $108 million) by selling the tokens at a high price point and failing to inform investors about the risk of the two cryptocurrencies collapsing.

Shin is also allegedly responsible for using customer information and funds of a fintech firm he headed, Chai Corp., to promote luna. All of these accusations have been refuted by him, who maintains that he had no affiliation with Terraform Labs at the time of his founding Chai Corporation in March 2020, after leaving the company.

The Seoul court acknowledged that the allegations had been largely proven, but noted that the risk of destroying evidence has been reduced with Kwon’s arrest, according to a report by the KBS, South Korea’s national broadcaster. It also emphasized the importance of enabling Shin to exercise his right to self-defense.

Interior Minister of Montenegro Filip Adi revealed this week that Kwon’s three laptops and five mobile phones, which contained a wealth of “very interesting” information, were discovered by investigators.  Officials revealed that South Korea and the U.S., both of which are requesting Kwon’s extradition, have asked for the devices at a press conference with Montenegrin Justice Minister Marko Kova in Podgorica.

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Business

Ripple Labs CEO Criticizes SEC Chairman over Securities

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has come under fire from the CEO of Ripple Labs, Brad Garlinghouse, for deciding which cryptocurrency tokens are securities. 

Garlinghouse said in a tweet, “For the Chair of the SEC to assert that he dictates what is a security — and not the legislation from which his agency derives its power — is beyond comprehension. It’s time for elected officials in the U.S. to take notice. When you behave like an autocrat running a $2.2B bloated agency, why would you ever want to provide clarity about what’s ‘in or out’? Without clear jurisdiction, ambiguity masquerades as power,” 

Gensler claimed that the current securities laws “cover most of the activity that’s happening in the crypto markets,” to which the Ripple executive responded by saying that this is untrue. The SEC chief was quoted as saying: “If Congress were to act, though I don’t think we need these authorities, not to undermine inadvertently through definitions of what’s in or out, or in essence allowing for conflicts that we don’t allow.” Gensler warned, “I think many of the legislative vehicles would if adopted, undermine the securities remit.”

The company has been embroiled in a legal dispute with the Securities and Exchange Commission (SEC) since the SEC filed a lawsuit against Ripple, Garlinghouse, and co-founder Chris Larsen in December 2020.  Ripple and Garlinghouse have consistently argued that XRP is not a security, despite the SEC’s assertion to the contrary.

Additionally, there have been many complaints that the SEC does not provide clear regulatory guidelines, which makes it challenging for businesses operating in the cryptocurrency space to ensure compliance.  Gensler has emphasized the importance of cryptocurrency exchanges and lending platforms coming in to discuss how to comply with the SEC on several occasions. Garlinghouse, on the other hand, has accused the SEC of meeting with crypto companies primarily to generate leads for its Enforcement Division. 

A Wells notice was recently sent by the SEC regarding possible securities law violations to the Nasdaq-listed cryptocurrency exchange Coinbase. In its response, the company stated: “We tried to come in and register with the SEC, but they won’t let crypto companies.” Gensler, on the other hand, has frequently stated his belief that all crypto tokens, with the exception of bitcoin, should be regarded as securities.

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Business

Bybit partners with Innovation Growth Hub to launch blockchain education program

Bybit, one of the world’s leading global crypto exchanges, has partnered with Innovation Growth Hub to launch a blockchain education and training program targeting African youths. The training program is expected to help young people learn and understand the fundamentals of blockchain, as well as how this creates new opportunities.

According to a report from The Guardian Nigeria, experts in the blockchain field are expected to lead and oversee the interactive discussions and online lectures. 

A spokesperson for Bybit highlighted the importance of the training program. He said, “Our goal is to give young people the knowledge and skills they need to understand and engage with blockchain technology. Hence, we will work together with Innovation Growth Hub to create a unique learning experience for participants.”

Additionally, the collaboration will also provide insight into the Bybit ecosystem, products, the blockchain, and the ways it can be used to create new opportunities. 

 Participants stand a chance of winning prizes even as they continue to learn from thee program.

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Business

Bank of Japan says CBDC needs to be ready to offer a safe digital payment system to the public

The Governor of the Central Bank of Japan, Haruhiko Kuroda, recently stated that the Bank of Japan needs to be ready to issue a CBDC to offer the public a safe digital payment system.

The country’s central bank is set to begin a pilot program in April to test the functionality of a digital yen. Japan is joining a growing list of nations seeking to establish a central bank digital currency for their own perspective.

Speaking on the arrival of a digital yen for the Japanese public, central bank Governor Kuroda discussed its necessity. Kuroda said, “Ensuring the coexistence of CBDC with various other forms of money is something that we need to and will in fact achieve in the future.”

“There are various options lying before us in terms of how and when to carry this out. But it’s our duty as a central bank to prepare ourselves to respond flexibly to any change in circumstances. The Bank of Japan is undoubtedly maintaining its CBDC and is ready, to present a safe digital payment system to the public,” he added.

Additionally, the Bank of Japan is set to follow up the pilot program by offering two years of experiments. Those developments will establish whether or not the government will fully issue a digital yen.

A central bank digital currency has become a vital part of the discourse within the digital asset industry. Japan has joined the growing list of entities committed to creating a digital alternative of their own currency for public use.

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Business

Hong Kong regulators to assist crypto firms with banking

Hong Kong is still dedicated to developing into a hub for digital assets. A meeting between cryptocurrency companies and bankers is scheduled to be held by the special administrative region’s regulators as a further move in that direction. The same aims to make funding easier for the cryptocurrency industry.

According to a recent Bloomberg report, the meeting will take place on April 28 at the Hong Kong Monetary Authority. This initiative intends to facilitate direct dialog and share practical experiences and perspectives in opening and maintaining bank accounts. Notably, the session will be held in conjunction by the HKMA and the Securities and Futures Commission.

In fact, China is also reportedly backing Hong Kong’s crypto hub vision. According to reports, officials from China’s Liaison Office have been frequent guests at Hong Kong’s crypto gatherings. Moreover, their encounters have been friendly. Additionally, officials have been checking on developments, asking for reports, and in some cases, making follow-up calls as well. 

The Bloomberg report further noted that the recent collapse in a host of U.S. crypto-friendly banks made it difficult for some firms to sign up for banking-related services. 

Nevertheless, the reportedly growing interest among Chinese state-owned lenders in the sector is a positive takeaway. Now, this is essentially unconventional, for China called for a crypto crackdown on trading in 2021. In fact, at the moment, most crypto-related activities remain prohibited there.

The representatives at HKMA and SFC did not reveal additional details. However, they are said to be maintaining dialog with stakeholders.

Recently, the Secretary for Financial Services and the Treasury, Christopher Hui, re-emphasized that Hong Kong is well-positioned to be a leading hub for Web3 in Asia and beyond. 

He added that the region continues to give great importance to virtual assets and Web3. In fact, as of the end of last month, Invest Hong Kong received expressions of interest from over 80 virtual asset-related mainland and foreign companies in establishing their presence in Hong Kong.

Categories
DeFi

A beginner’s guide on yield farming

Yield farming is an investment practice that involves locking crypto in a dApp (decentralized application) for token rewards. Yield farmers deposit their tokens into DeFi applications for crypto trading, lending, or borrowing. Since these investors enhance the liquidity in their chosen dApp, they’re referred to as liquidity providers.   

The crypto that yield farmers deposit into DeFi protocols gets locked into autonomous smart contracts. Until a yield farmer withdraws their funds, they’ll earn crypto rewards for their service. This crypto can come from network fees, loan interest payments, or native token rewards. Every dApp has different rules for how long a yield farmer must wait if they choose to withdraw their funds. 

Compound, a DeFi lending platform, is credited with inventing yield farming in 2020. However, Compound only introduced liquidity mining to the DeFi ecosystem. 

‍According to experts, yield farming and liquidity mining usually go hand-in-hand, but the latter refers to unique protocol-specific token rewards. In addition to getting regular interest payments and fees, Compound started offering its proprietary COMP governance token to farmers. Today, it’s common for DeFi platforms to offer their tokens via liquidity mining alongside yield farming opportunities.

For most DeFi protocols, yield farming is a powerful incentive to generate liquidity. Success in DeFi can be measured by the total value locked (TVL) in a dApp. TVL refers to the funds that investors locked into the protocol with the expectation of token rewards. The higher the TVL, the more money there is utilizing a DeFi project.

New dApps need outside funds to scale their operations, and they’re usually willing to pay high returns to early contributors. This is especially the case when new projects issue their tokens because they control token issuance. Yield farmers must hope these token rewards will grow in value as their DeFi protocol attracts more users. 

How does yield farming work?

When someone starts crypto yield farming, they’re depositing their tokens to a DeFi protocol.

Once a yield farmer’s funds are in a smart contract, they’ll be available to anyone using the dApp. For example, if someone added crypto to a liquidity pool on a decentralized exchange (DEX), crypto traders can buy and sell their tokens. Web3 users can also borrow crypto that a yield farmer deposits into a DeFi lending site like Aave. 

People choose to give their crypto to DeFi platforms because they expect returns. Yield farmers usually get a percentage of a network’s fees or interest payments deposited into their crypto wallet. Also, it’s common for DeFi sites to send a portion of their governance tokens as a bonus. 

Most DeFi sites quote the expected returns as annual percentage yield (APY). This percentage lets investors know the approximate annual returns they can expect for depositing their tokens in a chosen DeFi liquidity pool. In general, higher APY translates to high risk, so individuals should be cautious of advertised numbers that are far higher than what could be sustainable.

Many yield farmers wil hop from protocol to protocol, acting as mercenaries for higher APY. Many protocols will boost rewards to attract liquidity. This creates an unstable environment as many protocols will collapse once their incentives stop and liquidity leaves.

Remember that APY crypto includes compounding interest in its equation. Annual percentage rates (APRs), however, don’t factor in compounding interest. 

How to participate in yield farming

If you intend to participate in yield farming, you’ll need a private crypto wallet that connects with your preferred blockchain. Most of the activity in yield farming is on Ethereum (ETH), so high-quality Ethereum wallets like MetaMask are suitable for most yield-farming dApps. 

After you’ve set up your crypto wallet, you can visit a DeFi site that allows you to add liquidity to the protocol. Those on DEXs like Uniswap can add a 50/50 token trading pair to a liquidity pool. Whenever someone trades the tokens in your pool, you’ll get a percentage of the trading fees. 

If you’re on Aave, you can loan your crypto to earn an interest percentage. Some DeFi sites allow users to stake governance tokens to secure their protocol. Since most DeFi sites use a proof-of-stake (PoS) algorithm, they usually need people to lock the native cryptocurrency on-chain to secure their site

Risks of cryptocurrency farming

Crypto-yield farming attracts many investors, thanks to the promise of high APYs. Triple-digit APYs aren’t unheard of yield farming sites, but they often get new users into trouble. But before you deposit crypto into a liquidity pool, take a look at the risks associated with yield farming: 

Price volatility: Unless you’re using stablecoins, the market value of the tokens you’re depositing in liquidity pools will rise or fall over time. Even if you’re getting 1,000% APY, what’s the point if the token you’re holding goes to zero? DeFi protocols often offer ridiculously high APYs because they’re the ones issuing the token rewards. You always have to hope that the crypto you’re receiving will at least maintain its value to earn your predicted APY.

Impermanent loss: This refers to losing out on massive gains for the crypto you deposited in a yield farm. In other words, you would’ve made more money simply holding a cryptocurrency than the rewards you received for yield farming. 

Smart contract failure: Smart contracts are only as secure as their underlying code. Yield farmers always have to trust the smart contracts they’re using. For instance, the contracts don’t have any vulnerabilities that can potentially drain their funds. 

Scams: Given the lack of regulation in DeFi, it’s relatively easy for scammers to market fake dApps that promise high APYs to liquidity providers. Sometimes, these dApp creators will take crypto yield farmers’ deposits and disappear (or rug pull). Liquidity providers must be extra cautious about scams, especially with small projects.   

To sum up, yield farming allows crypto holders to earn passive income on their tokens without providing KYC data. However, remember that crypto yield farming comes with significant risks.

Categories
Business

US CFTC sues Binance and its CEO for alleged regulatory violations

The largest crypto exchange platform by trading volume has now found itself as the subject of a lawsuit. Specifically, Binance and CEO Changpeng Zhao (CZ) have been sued by the US Commodity Futures Trading Commission (CFTC) for alleged regulations violations.

The US Commodity Futures Trading Commission is a Government entity designed to protect the public from potential wrongdoings in the financial sector. Additionally, they execute their own investigation and prosecute potential commodities fraud, including those occurring in foreign currency schemes, according to their website.

According to Bloomberg, the regulator is suing the exchange for allegedly breaking trading and derivatives rules. The report states that the CFTC filed the lawsuit on Monday in federal court in Chicago.

The regulator also alleged that Binance, CZ, and Lim violated eight core provisions of the Commodity Exchange Act, including laws that require controls designed to prevent and detect money laundering and terrorism financing.

The CFTC Chair Rostin Benham stated in the press release, “Today’s enforcement action demonstrates that there is no location, or claimed lack of location, that will prevent the CFTC from protecting American investors. I have been clear that the CFTC will continue to use all of its authority to find and stop misconduct in the volatile and risky digital asset market.”

He added, “For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance. This should be a warning to anyone in the digital asset world that the CFTC will not tolerate willful avoidance of U.S. law. I applaud the diligent and dedicated work of the CFTC’s Enforcement team in bringing this action, and for their hard work in addressing illegal operations in the digital asset space.”

Without commenting on any of the specific allegations in the suit, a Binance spokesperson said the company has made significant investments over the past two years to ensure we do not have U.S. users active on our platform, including growing its compliance team from 100 to 750 people and spending $80 million on (know-your-customer) and other compliance vendors and tools.

“The complaint filed by the CFTC is unexpected and disappointing as we have been working collaboratively with the CFTC for more than two years. Nevertheless, we intend to continue to collaborate with regulators in the U.S. and around the world. The best path forward is to protect our users and to collaborate with regulators to develop a clear, thoughtful regulatory regime,” the spokesperson said.

This news quickly sent ripples through markets, driving bitcoin’s price down by about 3% within minutes of the disclosure, though it rebounded, recovering most of the loss as the day progressed. Binance’s exchange token BNB plunged as much as 6% from its price from right before the news came out. Additionally, crypto-related stocks also fell.