This week, government agencies have made headlines for their involvement in the cryptocurrency scene, particularly in the case of Terraforms Labs and central bank digital currency (CBDC) developments. Despite the growing concerns and doubts surrounding Binance, the exchange has remained dedicated to its growth strategy. Meanwhile, the non-fungible token (NFT) scene took center stage this week, confirming its burgeoning prominence among investors.
South Korea shares new insights into its Terraform labs
Government agencies have also remained highly involved in cryptocurrency, though regulatory initiatives have been scarce. An example of this can be seen in South Korea. Authorities continued their long investigation into the collapse of Terra and the role played by its founder, Do Kwon.
According to reports on April 3, Korean authorities have seized approximately KRW 210 billion (equivalent to $151 million) belonging to individuals affiliated with Terraform Labs. The forfeited assets consist of property, real estate and other assets. They were collected by the authorities as part of the compensation in Terra’s case.
Four days later, South Korean authorities revealed that the collective value of the profits accumulated from the defunct Terra ecosystem came to 414.5 billion won (about $315 million), with Do Kwon’s share of 91.4 billion won. Authorities further disclosed that none of the 91.4b won associated with Kwon was currently located within South Korean jurisdiction.
In addition, a large portion of the estimated profits generated by the foundation—up to 154 billion won—is attributed to Terra co-founder Daniel Shin. Attempts by the South Korean authorities to issue an arrest warrant for Shin proved futile. Remember, just last week, South Korea called for Do Kwon to be extradited to the country following his arrest in Montenegro.
CBDC developments spark reactions
This week has also seen an abundance of updates on the development of various Central Bank Digital Currencies (CBDCs). India entered the scene with an ambitious goal. India revealed that it aims to reach a user base of 1 million individuals for its digital rupee initiative. It is currently in the beta phase, which includes more than 13 banks and 15 cities.
Meanwhile, the cryptocurrency community has received an insight into the possible direction of the digital euro project following comments made by Christine Lagarde, President of the European Central Bank (ECB), during a prank call. Lagarde revealed during the call that the ECB has the intention to control payments linked to central bank digital currencies. This statement sparked a backlash from cryptocurrency advocates.
In a separate development, Ron DeSantis, the governor of Florida, has distanced himself from the concept of CBDCs, particularly in the United States, and strongly opposed their implementation. In keeping with the sentiments of the broader crypto community, DeSantis reiterated his support for financial freedom, arguing that CBDCs cannot provide it. Most notably, last month, he pledged to ban the use of CBDCs in the state of Florida.
The regulatory landscape of the United States
Regulatory developments in the US have been relatively sparse this week. However, government agencies have maintained their policies regarding the digital asset sector. In particular, Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), addressed issues related to cryptocurrency regulations and consumer protection during a hearing on the budget for fiscal 2024.
During the budget hearing, Gensler confirmed that laws are already in place to regulate the cryptocurrency industry and promote consumer protection. He stated that despite these regulations, many crypto companies have failed to comply with them, which has led to a host of enforcement actions recently. These observations challenge the notion widely held among cryptocurrency advocates that the United States lacks clear regulations for the digital asset sector.
Moreover, the US Treasury issued a warning this week, highlighting how digital assets pose a risk to national security. The Treasury stated that the growing adoption and use of cryptocurrencies could threaten financial stability and undermine existing regulatory frameworks.
The statement underscores the government’s growing concern about the possibility of misuse of digital assets by bad actors, particularly with regard to money laundering and terrorist financing activities.
Meanwhile, Coinbase has maintained its support for initiatives to fend off perceived wrongdoing by US regulators. On Wednesday, Coinbase’s chief legal officer, Paul Grewal, announced that the exchange is backing a group of plaintiffs in their legal efforts to overturn the ban on cryptocurrency mixer Tornado Cash, arguing that the ban is illegal.
The move is in line with Coinbase’s commitment to advocating for a regulatory environment that fosters innovation and protects the rights of consumers and businesses in the crypto industry. Earlier, the exchange defended efforts to challenge the SEC’s crackdown on cryptocurrency storage.
Asian regulators are looking to tighten regulatory oversight
Financial regulators across Asia are prioritizing efforts to ensure that investors in the cryptocurrency space are well protected. A move from Japan this week indicates that the country is looking to strengthen the regulations governing cryptocurrency exchanges within its jurisdiction.
Japan’s Financial Services Agency (FSA) has warned of four exchanges operating within the country without proper licensing. The notice has been submitted to Bybit, BitGet, MEXC Global and BitForex. Bybit has reportedly received similar warnings, including one from Japan’s Free Syrian Army in May 2021.
Singaporean authorities also made headlines this week as the country sought assistance aimed at mitigating the risk of financial meltdowns. The Monetary Authority of Singapore (MAS) has revealed plans to provide guidance for financial institutions to assess potential crypto customers to reduce the risk of financial instability. The move is part of Singapore’s efforts to ensure proper regulation and protection for investors in the cryptocurrency industry.
Dubai has also stepped up efforts to tighten censorship of cryptocurrency-focused companies seeking to establish a presence in the city. According to reports on April 5, the Dubai World Trade Center (DWTC) authority is asking for more details from cryptocurrency entities applying for operating licenses in the emirate, including Binance.
Binance continues to grow amid FUD
Meanwhile, concerns and doubts surrounding Binance gained some modest traction this week due to a mixture of speculation and confirmed developments. The Fear, Uncertainty, and Doubt (FUD) campaign was recently launched due to the charges brought against Binance by the US CFTC last week.
On Tuesday, Binance CEO Zhao Zhao addressed rumors that he had been placed on Interpol’s red notice list in response to the CFTC’s accusations against Binance. In a tweet, Chow denied the allegations, stating that the alleged “evidence” was fabricated. He also urged the crypto community to continue to ignore unfounded speculation.
On April 6, the Australian Securities and Investments Commission (ASIC) announced that the Binance Australia derivatives platform would be scrapped. This move doubled the current FUD. However, Zhao clarified in a tweet that the cancellation was in response to a request from Binance, and that the company’s Australian division continues to operate the spot exchange without issues.
Despite the growing FUD surrounding its operations, Binance has remained committed to furthering its expansion initiatives. The exchange recently announced a strategic partnership with Shakhtar Donetsk, a popular Ukrainian professional football club. This entails Shakhtar becoming the first collaborator with Binance Web3 Services (BWS).
The partnership also led to the creation of FC Shakhtar Fanverse, which aims to engage fans of football clubs in a unique and immersive digital experience.
In addition to the collaboration with Shakhtar Donetsk, Binance has also established another partnership this week to provide convenient on/off ramp services to its users in Argentina. This will facilitate a smooth and hassle-free transfer of crypto assets to and from the Argentine peso, thanks to the participation of a local partner.
NFTs take center stage
Important developments in the NFT industry were also at the forefront this week. Notably, OpenSea, one of the leading NFT marketplaces by volume, introduced OpenSea Pro on Tuesday. The platform was launched in response to the growing importance of OpenSea’s competitor, Blur, and specifically aims to cater to the demands of professional NFT traders.
Barely four days after the introduction of OpenSea Pro, the platform’s rapid adoption has seen its volume and active titles increase exponentially. As a result, OpenSea Pro has overtaken Blur in market dominance, though not by a huge margin. Both platforms continue to compete for a larger share of the market.
After former United States President Donald Trump appeared in court on Tuesday in a separate development, his NFT pool has garnered a lot of attention. Notably, in the 24 hours leading up to April 5, the group’s trade volume increased by as much as 112%, according to data from DappRadar.
Enjin, a blockchain-based gaming platform, has also attracted attention this week after seeing a significant jump in the price of its native token. The increase came on the heels of the platform’s plans to launch a new NFT marketplace to simplify NFT management. Within 24 hours, the Enjin token saw an impressive 14% increase in value and an 876% increase in trade volume.