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Terraform Labs Founder Do Kwon Will be Extradited to the United States

Terraform Labs Founder Do Kwon Will be Extradited to the United States

According to local reports, Montenegro’s Minister of Justice has signed an order to extradite Terraform Labs founder Do Kwon to the United States, rejecting South Korea’s request for extradition. South Korean authorities accuse Kwon of misleading investors and concealing assets.

This decision follows a Supreme Court ruling in Montenegro, which confirmed that legal requirements for extradition had been satisfied.

Do Kwon To Face Trial in the US

Earlier this week, BeInCrypto reported that a US extradition was likely after Montenegro’s court dismissed Do Kwon’s appeal against extradition, citing legal flaws in his case.

While the extradition date isn’t final yet, Kwon will likely face a trial similar to Sam Bankman-Fried. The FTX founder is currently serving a 25-year sentence, and he was also extradited from the Bahamas. However, his extradition was far less complicated than Kwon’s.

“Taking into account the Supreme Court’s ruling, the Ministry of Justice reviewed all facts and circumstances and assessed criteria such as the severity of the criminal offenses, the location of their commission, the nationality of the requested individual, as well as other circumstances. Based on this, it was concluded that the majority of the criteria stipulated by law favor the request for extradition by the competent authorities of the United States,” stated the Ministry of Justice in its announcement.

The Terraform Labs founder is under investigation in both the US and South Korea for his role in a major cryptocurrency collapse in May 2022.

At that time, the crash of TerraUSD and Luna erased $40 billion from the crypto market. It triggered a widespread financial fallout, leading to the bankruptcy of several companies in the sector.

Furthermore, authorities allege that Kwon deceived investors and suspect he concealed significant assets. In March 2023, Kwon and his business partner, Han Chong Jun, were arrested at Podgorica Airport in Montenegro while attempting to board a flight to Dubai using fake passports.

Kwon was sentenced to four months in prison in Montenegro. However, he is currently detained at the Spuž Centre for Reception of Foreigners.

“Extraditing him to the US could have major implications for how international crypto fraud cases are handled. It’s interesting to see how justice systems across borders interact in these high-profile cases,” author Anndy Lian wrote on X (formerly Twitter).

Historic Settlement with the SEC

In June 2024, Terraform Labs reached a historic settlement with the SEC, agreeing to pay $4.47 billion in penalties. The settlement included $3.6 billion in disgorgement fines, a $420 million civil penalty, and $467 million in pre-judgment interest.

Also, Kwon was personally ordered to pay over $200 million, including $110 million in disgorgement, $80 million in civil penalties, and $14.3 million in interest.

Controversy has also emerged surrounding Kwon’s alleged political connections in Montenegro. Reports suggest he may have financial ties to local political figures, including Milojko Spajic, leader of the Europe Now party.

Overall, these connections raised concerns about potential interference in the extradition process. In 2023, Montenegro’s prime minister called for an investigation into these claims, adding another layer of complexity to the case.

 

Source: https://beincrypto.com/do-kwon-extradition-us-montenegro/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
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What Singapore should do for Token Regulation: My Suggestions for Proposed DTSPs Framework

What Singapore should do for Token Regulation: My Suggestions for Proposed DTSPs Framework
  • In the first half of 2024, Singapore’s cryptocurrency and blockchain sectors grew by 22%, reaching over US$200 million.
  • The MAS proposed a risk-based regulatory approach to enhance anti-money laundering and counter-financing of terrorism.

Singapore has consistently positioned itself as a forward-thinking jurisdiction, balancing innovation with robust regulatory oversight. As a fellow Singaporean, I am very proud of its future planning.

The Monetary Authority of Singapore (MAS) is seeking submissions for the Consultation Paper on the proposed regulatory approach for Digital Token Service Providers (DTSPs) under the Financial Services and Markets Act 2022.

Instead of replying to the submission directly, I will try to share my point of view openly here, offering insights, potential plans, and timelines for implementation. Before I start, I am sharing this in my personal capacity: I do not represent any self-claimed digital assets expert groups, associations, or schools.

License Application and Fee Structures

In the first half of 2024, Singapore’s fintech market saw its cryptocurrency and blockchain sectors achieve US$211.90 million across 72 deals, marking a 22% increase from US$166.30 million over 38 deals in the second half of 2023.

Singapore has been actively working on strengthening risk management frameworks for digital asset tokenization and has recently launched an initiative to expand asset tokenization within financial services.

The proposed license application processes and fee structures are crucial elements that will shape the DTSP landscape in Singapore. From my perspective, MAS should consider implementing a tiered approach to both timelines and fees, reflecting the diversity of DTSPs in terms of size, complexity, and risk profile.

For timelines, I propose a three-tier system:

Fast-track (60 days): For small, low-risk DTSPs with straightforward business models.

Standard (90 days): For medium-sized DTSPs or those with moderately complex operations.

Extended (120+ days): For large, complex DTSPs or those proposing novel business models.

This tiered approach would allow MAS to allocate resources efficiently while ensuring thorough vetting of more complex applications. The fee structures can follow a similar tiered system based on the DTSP’s annual revenue or transaction volume could be implemented.

Minimum Financial Requirements

The proposed minimum financial requirements are a critical safeguard against potential market disruptions and consumer losses. Based on my analysis, I believe a risk-based approach to setting these requirements is more feasible. This could involve:

Base Capital Requirement: A minimum base capital for all DTSPs, regardless of size or services offered.

Risk-Weighted Capital Requirement: Additional capital requirements based on the DTSP’s types of services offered, transaction volumes, and risk profile.

Liquidity Requirement: A minimum liquidity ratio to ensure DTSPs can meet short-term obligations.

Specifically, providers with capital ratios above 15% were 30% less likely to face operational disruptions during periods of extreme market stress. I propose that MAS consider setting the base capital requirement at SGD 250,000, with additional risk-weighted requirements that could increase this amount up to SGD 5 million for the largest and most complex DTSPs.

Audit Requirements

The proposed duties of CEOs, directors, and partners, along with audit requirements, are fundamental to ensuring good governance and accountability in the DTSP sector. The following enhancement is recommended for consideration:

Mandatory Training: Annual training programs for CEOs and directors on regulatory compliance, risk management, and emerging trends in digital assets.

Risk Committee: DTSPs above a certain size must establish a dedicated risk committee at the board level.

Independent Directors: Mandating a minimum number of independent directors based on the DTSP’s size and complexity.

Audit Frequency: Annual external audits for all DTSPs, with additional quarterly internal audits for larger providers.

Regulators are increasingly leveraging technological solutions to enhance their supervisory functions and manage vast amounts of data. Consequently, firms must engage more frequently with regulators regarding fintech and regtech developments.

Fintech companies that implement robust governance structures and conduct regular audits are indeed less likely to experience compliance breaches.

AML/CFT Measures

The measures proposed in parts 5–8 of the consultation paper, particularly those related to Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT), are crucial for maintaining the integrity of Singapore’s financial system. I propose the following enhancements:

Risk-Based Approach: Implement a tiered KYC/AML approach based on transaction volumes and risk profiles.

Technology Integration: Encourage the use of AI and machine learning for transaction monitoring and suspicious activity detection.

Regulatory Technology (RegTech) Sandbox: Establish a sandbox environment for DTSPs to test innovative compliance solutions.

For existing customers onboarded prior to licensing, I suggest a phased approach:

Phase 1 (0–6 months): Risk assessment of existing customer base

Phase 2 (6–12 months): Enhanced due diligence for high-risk customers

Phase 3 (12–18 months): Full compliance with new requirements for all customers

Correspondent Account Services

The proposed requirements for Correspondent Account Services and information sharing for law enforcement purposes are essential components of a comprehensive regulatory framework. Perhaps the following would help:

Standardized Data Format: Develop a standardized data format for information sharing across the industry.

Blockchain Analytics: Encourage the use of blockchain analytics tools to enhance transaction traceability.

Secure Information Sharing Platform: Establish a secure, centralized platform for information sharing between DTSPs and law enforcement agencies.

Blockchain analytics tools have been instrumental in recovering stolen or illicitly obtained digital assets worldwide. They allow law enforcement agencies to trace and identify suspicious cryptocurrency transactions on the blockchain, leading to asset recovery efforts.

Technology Risk Management

The draft notices FSM-N28 to FSM-N33 cover critical aspects of DTSP operations, including technology risk management, cyber hygiene, and conduct. Based on my observations, I propose the following:

Continuous Monitoring: Implement real-time monitoring systems for cyber threats and operational risks.

Incident Response Drills: Mandate regular incident response drills and simulations.

Third-Party Risk Management: Establish clear guidelines for managing risks associated with third-party service providers.

Consumer Education: Require DTSPs to allocate resources for ongoing consumer education initiatives.

Regarding operating hours, perhaps MAS can consider a flexible approach that allows for 24/7 operations while ensuring adequate risk management and customer support. This could involve:

Core operating hours (e.g., 9 AM to 5 PM SGT) with full support services

Extended hours with automated systems and on-call support

Scheduled maintenance windows during low-volume periods

Timeline for Implementation:

To ensure a smooth transition to the new regulatory framework, I propose the following timeline:

Month 0–3: Publication of final regulations and guidelines

Month 3–6: Industry consultation and feedback period

Month 6–9: Finalization of technical specifications and reporting formats

Month 9–12: DTSP preparation and system upgrades

Month 12–18: Phased implementation of new requirements

Month 18–24: Full compliance deadline for all DTSPs

This timeline allows for a gradual implementation, giving DTSPs sufficient time to adapt their systems and processes while ensuring that the regulatory framework is fully operational within two years.

With careful implementation and continuous refinement, this regulatory framework has the potential to cement Singapore’s position as a global leader in digital asset regulation, attracting innovative businesses while safeguarding the interests of consumers and the broader financial system.

 

Source: https://www.financemagnates.com/cryptocurrency/what-singapore-should-do-for-token-regulation-my-suggestions-for-proposed-dtsps-framework/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Crypto insurance: Do you need one in 2024?

Crypto insurance: Do you need one in 2024?

Obviously, the decentralized finance (DeFi) industry is not going to stand still, as new projects and innovative financial instruments are constantly entering the market, and user adoption is increasing.

According to Triple-A estimates, there will be around 560 million cryptocurrency users worldwide in 2024. The number could be higher, as accurate determination is difficult due to the decentralized nature of cryptocurrencies.

However, the more the crypto industry expands, the more vulnerable it becomes to hacking and exploitation.

According to data published by TRM on June 24, 2024, the value of stolen cryptocurrencies doubled from $657 million to $1.38 billion within a year by June 24, 2024. Such a sharp increase could prompt crypto investors to consider purchasing crypto insurance.

One notable project in this space is 99Bitcoins, which aims to enhance security awareness and provide educational resources to help users understand the importance of protecting their digital assets.

By offering comprehensive guides and tools, 99Bitcoins empowers users to take proactive measures in securing their investments, thereby complementing the role of crypto insurance.

What is Crypto Insurance and How Does it Work?

Essentially, crypto insurance follows the same principles of effective risk management as traditional insurance, says Joseph Ziolkowski, CEO and co-founder of Relm Insurance, an insurance provider specializing in the digital assets and Web3 industries.

The main focus of crypto insurance is to protect crypto holders and businesses from risks such as theft, hacking, and technical failure. They provide financial protection for damage caused by such incidents and form a safety net.

However, due to the volatile nature of DeFi, cryptocurrency insurance coverage could tide over fluctuating market movements or accidental user errors, added Anndy Lian, an intergovernmental blockchain consultant.

In addition, Lian introduced the idea of ​​DeFi insurance, explaining that it uses blockchain technology to create a community-run pool for covering losses, eliminating the need for a traditional insurance company.

Demand for Crypto Insurance is Increasing

With the increase in cyberattacks on crypto exchanges and wallets, the demand for crypto insurance has certainly increased significantly, which also coincides with the overall growth and acceptance of the cryptocurrency industry.

Relm Insurance’s Ziolkowski noted that the company has observed significant growth in the crypto insurance market, especially following the introduction of new regulations and due to the ecosystem’s continuous development of innovative solutions.

He said: “Demand for crypto insurance has remained consistently strong and has proven its resilience even in bear markets. Due to this high demand, Relm has launched a Web3 product range that offers tailored and comprehensive insurance coverage for clients exploring or using Web3 technologies.”

“Our five distinct products directly address the nuanced risks faced by cryptocurrency exchanges, asset managers, technology developers, miners, token issuers, institutional staking providers, and other entities operating in the ecosystem.”

However, according to Ziolkowski, the increasing number of insurance claims also means that insurers are less willing to cover these types of risks.

Protection from the Wild West of Crypto Risks

Unlike traditional insurance, crypto insurance focuses on eliminating specific threats that the crypto industry is more vulnerable to, such as theft and hacking, loss of crypto and keys, and cyber and technical errors and omissions.

Lian described cryptocurrency insurance coverage as protection “against the Wild West of cryptocurrency risks,” noting that some of the most popular solutions include protection against hacking and theft.

This covers and protects crypto assets stolen during a security breach, as well as the loss of custodians due to accidental loss or loss caused by a technical malfunction.

Relm Insurance’s Ziolkowski further explained that some of the most common types of crypto insurance include directors and officers (D&O), cyber and technology professional liability, and investment manager insurance.

D&O insurance protects crypto companies and their executives from lawsuits, typically resulting from alleged mismanagement, and includes three levels of coverage:

The protection of individual directors if they are sued and the company cannot compensate them.

Reimbursement of costs incurred by the company in naming executives in legal proceedings.

Covering the company’s expenses if both the company and its executives are sued.

The cyber and technology professional covers technology-related liabilities specified in contracts.

Finally, the Investment Managers Insurance Coverage provides special coverage for investment managers who oversee cryptocurrency assets.

It typically includes protection against claims arising from professional error, mismanagement, breach of fiduciary duty, and violation of regulations.

It can cover legal defense costs, settlements, and damages and protect both the managers and the investment firm from financial losses due to these risks.

Crypto Insurance Companies “In Cahoots” With Regulators

According to Relm Insurance’s Ziolkowski, Relm works with regulators around the world to address the insurance requirements embedded in their respective legal frameworks.

“It is crucial to recognize the considerable differences in these requirements: some countries require only a single type of insurance, while others require eight or more types of insurance.”

Ziolkowski cited Hong Kong as an example, where 50% of all assets held in custody must be insured – a requirement that is not applied uniformly in all regulations.

Such regional differences underscore the evolving landscape of regulatory frameworks in which insurance mandates are increasingly creating credibility and legitimacy within the crypto industry.

Lian added that regulatory frameworks can often influence the types of risks covered by crypto-insurance, highlighting the importance of collaboration.

“For example, regulations addressing smart contract vulnerabilities could pave the way for insurance against bugs or exploits within these digital agreements. Conversely, a lack of regulations for certain crypto activities could result in them not being covered by insurance.”

Crypto Insurance: A Promising Concept?

Lian stressed that crypto insurance is “a promising concept, but it is still uncharted territory.”

“Unlike traditional insurance, which relies on decades of data, the new and ever-changing landscape of cryptocurrencies makes it difficult for insurers to assess risk and set fair prices for insurance coverage.”

Furthermore, the decentralized nature of cryptocurrencies clashes with traditional insurance models, which could make insuring digital assets somewhat more challenging, as they are often distributed across a number of digital wallets.

Relm Insurance’s Ziolkowski highlighted that a striking trend Relm is observing is the increasing demand for higher coverage amounts in slashing insurance, reflecting increased risk awareness and exposure.

“In addition, there is a remarkable increase in dynamic insurance offerings entering the market due to customer innovation. Companies’ risks are growing at a pace that far exceeds that of the traditional financial world.”

Therefore, cryptocurrency insurance could experience even more growth in the future.

Conclusion

Crypto insurance has become a crucial component in the rapidly evolving digital asset and DeFi industry.

As the number of users and the value of digital assets continue to grow, so does the potential for risks such as hacking, theft, and regulatory challenges, forcing more and more investors to consider options for protecting their investments.

Despite the challenges of insuring digital assets in a decentralized and volatile environment, the demand for comprehensive insurance coverage is growing.

By collaborating with regulators and developing innovative products, the crypto insurance sector will play a critical role in securing the future of digital finance.

As the industry matures, the protection offered by crypto insurance will be essential to promoting trust and stability in the crypto world.

 

Source: https://usa.inquirer.net/154627/crypto-insurance-do-you-need-one-in-2024

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j