Victims of the UST-induced market crisis that saw over $40 billion in crypto assets evaporate in May have filed a fresh lawsuit in Singapore against embattled Terra Form laboratories CEO Do Kwon, the Luna Foundation Guard (LFG), and Terra founding partner Nicholas Plates.
What Went Wrong with TerraUSD?
Do Kwon's promises were readily swept away by waves on May 9, 2022, when the TerraUSD (UST), valued at $18 billion at the time, collapsed.
The cryptocurrency failed to hold its $1 peg, falling to $0.35. LUNA, a token designed to keep the UST price from plummeting precipitously, saw its value plummet from $80 to a few cents.
The TerraUSD collapse occurred in three stages, beginning with two dealers violating the currency's peg. Terraform Labs and three allies attempted to "fix" the situation by acquiring $2 billion in UST. As a result, the funds were depleted due to an uncontrolled sell-off.
The development did not end there, as it hyperinflated LUNA and eventually destroyed the prices of the two assets, forcing the crypto market to lose almost $40 billion.
Do Kwon’s Legal Headache
According to documents filed in Singapore's high court on September 23, 359 people claimed that Kwon and his co-defendants made false representations about Terra's algorithmic stablecoin TerraUSD's reliability (UST). The plaintiffs expressly claimed that Do Kwon was aware of "the structural fragility of algorithmic stablecoins" as a result of his engagement with Basis Cash (BAC), another stablecoin that failed under his supervision in early 2021, before the launch of UST.
The claimants further claimed that the defendants "knew or should have known that the claimants wanted to buy and hold digital stablecoins that were not susceptible to the volatility of the broader market and yield a respectable passive return." The claimants sustained significant losses on their UST holdings as well as additional damages as a result of the trio's acts. The claims asked the court to give them approximately $57 million for their losses and to force the trio to pay "aggravated damages."
The case comes amid an intensifying search for Kwon, who has now become an international fugitive after South Korea issued an arrest warrant. Therefore, the Terra blockchain ecosystem collapsed in May, Kwon has been the victim of many legal actions and threats. In September, South Korean authorities issued an arrest order for the Terra co-founder, which was later rejected, and Interpol added Kwon to its Red Notice list, urging that law enforcement identify and possibly jail him. On October 6, the South Korean Ministry of Foreign Affairs issued a notification ordering Kwon to return his passport within 14 days, or it would be invalidated.
Since his Terra empire collapsed in May, leaving millions of investors with severe losses, the Korean-born developer has been the target of several litigation lawsuits in the United States and South Korea over the last four months.
Eventually, local media reported that prosecutors were "in the process of freezing" tokens "believed to be owned by Kwon." These coins were allegedly stored on an unknown "overseas" cryptocurrency exchange that was "cooperating" with the Seoul Southern District Prosecutors' Office.
Despite not identifying his location, Kwon has been active on social media amid the issue and stated in September that he was "making zero attempt to conceal." In reaction to the complaint, one Redditor said Kwon was "doing a bad job at acting innocent for a guy who is innocent." Others speculated that he had undergone plastic surgery to conceal his features.
Conclusion
While it is unclear where Kwon is, Korean authorities reportedly claimed that he left Singapore for Dubai last month. However, no documents were found indicating that Kwon had entered the city, prompting Korea to ask neighbouring countries to assist in tracking his location. Kwon denied being on the run in a recent interview but refused to identify his location.
On Tuesday, the inventor of Ethereum, Vitalik Buterin, said that the Ethereum merge is projected to take place "around" September 13 to September 15 and that this date is now on schedule. This is the day at which the proof-of-work consensus technique that requires a lot of energy will be abandoned by the second biggest cryptocurrency in the world.
The market shifts
The merging is only the most recent improvement to the Ethereum blockchain, which is being done in the interest of establishing a trustworthy decentralized environment for the future of money. The transition to proof of stake delivers several advantages, one of which is the alleviation of worries around energy use.
Block transactions are validated using proof of stake by validators who have bet a certain amount of their tokens on the outcome of the transaction. The greater the number of tokens that a person has linked to the blockchain, the greater the likelihood that they will be randomly selected to serve as a network validator.
In contrast to this, proof of work is an energy-intensive technique that depends on computers to solve mathematical formulas to mine tokens. This rate of energy consumption is a key critique of proof of work, which will remain the basis of Bitcoin mining when Ethereum abandons the procedure. Despite this criticism, proof of work remains the foundation of Bitcoin mining.
Apart from the problem with energy, and on top of the recent meltdowns of crypto lenders, the cryptocurrency sector as a whole is facing a multitude of macroeconomic issues. These concerns range from political tensions to high inflation rates to hawkish national monetary policies. These large-scale variables are generally regarded as the spark that ignited the latest bear market.
Price pressures are seen lately
In November of 2021, the price of a bitcoin hit an all-time high, which was $69,000. Since then, the price of Bitcoin along with the rest of the market has suffered as a result of the challenging economic circumstances. The short-term price forecast for the most popular cryptocurrency is still unclear as Bitcoin's price continues to fluctuate and encounters some resistance near $20,000.
It is not apparent what type of event or change may assist Bitcoin is making a comeback. As the volatility of leading cryptocurrencies continues to worry mainstream investors, they may become more critical of the fundamentals of Bitcoin. Furthermore, the network upgrades that Ethereum is planning to implement to position its ecosystem as the currency of the future could place even more pressure on Bitcoin's usability.
Vitalik Buterin voiced his worries about Bitcoin's proof-of-work issuance model during an interview that took place one week ago with the journalist Noah Smith on the topic of security, governance, and consensus mechanism models. Buterin is concerned not just about the amount of energy that is being used in the present, but also about how the continuous issue of a proof-of-work token may impact future validation.
Following China's crackdown on cryptocurrency mining, which resulted in a large reduction in the proportion of renewable energy sources that power the network, the study was strengthened. Alex de Vries, a researcher and skeptic of cryptocurrencies, observed that "Bitcoin became dirtier following the Chinese mining crackdown in 2021."
Is the event being hyped unnecessarily?
However, not everyone is persuaded that this will result in Ethereum being the dominant cryptocurrency. The majority of the current narrative has been driven by the fact that analysts such as Glen Goodman from eToro have pointed out how the price of Ethereum has outperformed the price of Bitcoin in recent weeks. In the end, it is unclear what the future of Bitcoin will be like following the integration. There are several issues at play, including regulation, worries about energy use, and competitiveness. Inventors are apprehensive of the possible economic dangers at a time when their greatest rival is ready to claim a major technological advantage.
Coincheck, a major Japanese cryptocurrency exchange, stated on Friday that it aims to list on Nasdaq on July 2, 2023, through a merger with a special purpose acquisition company (SPAC) Thunder Bridge Capital Partners IV.
Coincheck stated that its ambitions to pursue a public stock offering in the United States via Nasdaq would provide the company with access to the country's lucrative capital markets.
Coincheck, a Japanese cryptocurrency exchange, has confirmed plans to pursue a public stock offering in the United States via Nasdaq, giving the company access to the country's lucrative capital markets.
Coincheck Business Update
Coincheck provided an update on its business. Initially, it expanded its dominance in Japan by slowly accumulating customers despite the weak crypto asset market.
The exchange subsequently stated that its NFT business revenue for the quarter was $160 million due to NFT market headwinds.
Coincheck also wanted to establish and expand its digital economic world with an eye on Web3, collaborating with appealing producers and artists to create revenue prospects such as sales of exclusive NFTs, tenant fees for land in the metaverse, and growing the Coincheck NFT user base.
Coincheck promotes firms related to crypto assets and NFTs that are spearheading the adoption of Web3 in addition to Coincheck Labs, the blockchain, and the Web3 ecosystem.
The exchange also identified several significant growth prospects that can be explored organically and accelerated through M&A or collaborations.
Coincheck and Hunder Bridge Capital Partners are Merging.
According to the exchange, the move will allow it to expand its crypto asset company by acquiring access to US capital markets, gaining exposure to global investors, and recruiting personnel to accomplish its growth goal. Monex Group, Coincheck's primary owner, declared in a Securities and Exchange Commission (SEC) filing.
In March of this year, Coincheck declared its intention to go public. Its merger with Thunder Bridge Capital was valued at $1.25 billion at the time.
SPACs were the hottest way for crypto firms to go public in 2020 and 2021, but the craze has died down this year due to an overall market slowdown and new Securities and Exchange Commission (SEC) restrictions.
Since June of this year, the SEC has been more careful about the general SPAC process, particularly crypto-related agreements, to improve investor safety.
Since July of last year, Circle Internet Financial, the backer of the "stablecoin" USD Coin, has been attempting to go public with a SPAC called Concord Acquisition (CND).
Coincheck controls 27% of Japan's Cryptocurrency market.
Coincheck has 1.75 million confirmed accounts, accounting for 27% of Japan's crypto trading market share, according to financial statistics. However, the company observed a drop in trade volume as a result of the cryptocurrency bear market. Quarter over quarter, total operational revenues fell by approximately half.
Several crypto-related companies have expressed an interest in going public via SPAC agreements. PrimeBlock, a Bitcoin (BTC) mining startup, announced in April that it would go public via a $1.25 billion SPAC. W3BCloud, a blockchain cloud infrastructure provider, announced a comparable price tag for its SPAC merger in August. eToro, a stock and cryptocurrency exchange, had planned a $10 billion merger before canceling the agreement over the summer.
Conclusion
A crypto/SPAC merger is also in the works between eToro Group, an Israeli online brokerage, and FinTech Acquisition Corp. Therefore, V (FTCV), a SPAC backed by veteran financier Betsy Cohen. The merger was called off in early July after the companies were unable to complete the transaction by the June 30 deadline. One of the reasons the deal failed was a failure to obtain SEC permission.
As part of Elon Musk's $44 billion acquisition of Twitter (TWTR), Binance, the largest cryptocurrency exchange in the world by trading volume, announced it had invested $500 million. This modest but significant action sparked rumors that the social media company might one day run on blockchain technology.
Musk Successfully Takes Over Twitter.
Musk completed his $44 billion acquisition of Twitter late on Thursday, gleefully tweeting, "The bird is liberated," and promptly removing several top executives from their positions. After months of public and legal battles over the sale, this finally happened. Early sources state that the new owner has already drastically lowered Twitter's c-suit. Twitter CEO Parag Agrawal, CFO Ned Segal, and top attorney Vijaya Gadde, who played a key role in the decision to block former President Donald Trump's account on the social media network in January 2021, are reportedly among the departing staff. Although it might only be a temporary post, Musk will take over as CEO, according to a source who talked with Bloomberg.
As per the reports, his next step would be to reinstate Twitter users who have received lifetime bans from the platform, including Trump.
Before finalizing the acquisition, Musk indicated that securing the "future of civilization" was his main driving force in buying Twitter.
Instead of dividing into "far right-wing and far left-wing echo chambers," Musk says the objective is to maintain a "common digital town square," where individuals of diverse viewpoints may discuss on their points of view without resorting to violence.
Other objectives include combating Twitter spam bots, which might be done by putting blockchain-based solutions in place.
Bot spam is particularly common in the cryptocurrency world, where con artists frequently use false identities to entice investors by impersonating influencers and other well-known people, including Elon Musk.
Binance Founder Expressed His Excitement about Working Together with Musk
Binance revealed on Friday that it has invested in Twitter's acquisition by billionaire internet entrepreneur Elon Musk as an equity investor (TWTR).
The founder of Binance, Changpeng Zhao, expressed his excitement in an email, "We're thrilled to be able to support Elon in realizing a new vision for Twitter. We want to help social media and Web3 work together to increase the use and adoption of blockchain and cryptocurrency." A team from Binance is reportedly being formed to think of ways that blockchain technology and cryptocurrencies can help Twitter.
In a tweet, Zhao claimed that Binance had sent $500 million as part of the transaction two days prior. CoinDesk's request for comment from Twitter did not immediately receive a response.
A few Twitter executives were reportedly taken to the door as Musk closed the transaction on Oct. 27. The new owner of the social media platform then purportedly cleaned house. In May 2022, according to a statement made by Binance, it will invest alongside 18 other investors in Twitter, including major cryptocurrency investment firms Sequoia Capital Fund, Fidelity Management, and Research Company.
The founder of Binance said on October 28 that the company had placed money on the table as Musk completed his acquisition of Twitter. To check that the business had wired the monies earlier in the week, CZ used the newly acquired platform.
Conclusion
Zhao clarified that he was not personally involved in the transaction and quipped that he thought the transfer had been made using traditional banking methods rather than a blockchain or cryptocurrency transaction in response to a user on the Twitter thread who wrote "CZ" now owns part of Twitter: "We are small potatoes, just a tiny bit." Zhao responded to other comments, clarifying that he was not personally involved in the transaction.
The top cryptocurrency exchange Binance has identified two suspects who are allegedly responsible for the hack of $265,000 from decentralized exchange (DEX) protocol KyberSwap earlier this week.
Changpeng Zhao (CZ), the CEO of Binance, exposed this information on Twitter recently. The company has shared the info with KyberSwap along with the appropriate law enforcement agencies.
The Attack :
KyberSwap has faced a cyber attack
on September 1. The DEX protocol faced an unhealthy security breach which allowed hackers to steal assets. It was worth thousands of dollars to users.
According to the project, the bad actors shared malicious code on the protocol’s Google Tag Manager (GTM). It has prompted false approval that allowed them to transact assets in their wallets.
The platform also shared that the hackers smartly launched the bad script. It was targeted to whale wallets on Ethereum and Polygon. Further KyberSwap added that exploited users would be fully compensated.
The hack came to know and immediately stopped within two hours of its launch. The protocol offered that the bad actors would be rewarded with a 15% bug donation if they returned the stolen assets.
Binance As Crypto 'Big Brother :
Hardly two days after the theft, the Binance investigation team announced that they had been able to track and identify two scammers who are suspected or may be responsible for the hack. The company also noted that they had appointed government authorities in the incident for further investigation.
Similar to KyberSwap, Binance has assisted with several hacked protocols to identify the bad actors along with recovering some stolen assets.
As the biggest crypto exchange by trading volume, the proactive and unselfish efforts of Binance to help investors from other ecosystems weren’t neglected.
As one of the users stated, “Binance is now playing as a big brother in the crypto space. Binance has gone beyond securing its platform to keep the entire crypto ecosystem safe.”
CZ stated that Binance has never been lawfully integrated in China and has never fixed business in a manner compatible with the Chinese organization, Cointelegraph.
Notably, the company succeeded to recover nearly $450,000 stolen from the Defi platform Curve Finance last month. It was reported that the recovered funds were 83% of the total assets exploited from the protocol. The platform stated that the hackers transferred the assets to the exchange through different techniques. They expected to bypass the firm’s security team.
Since the platform, Binance, continues to make an effort to make the global crypto industry safer for investors and users, some user groups of the crypto community think that the company is now acting as a “big brother” role in the whole crypto market.
According to Changpeng ‘CZ’ Zhao, CEO of Binance, the theft of information had been noted to the Kyber team. Since both sides are eager to catch the hackers, Binance has also begun to work with law enforcement as of the recent information.
Conclusion :
Notably, there have been so many exploits and theft in the crypto market over the past couple of months. Since the market fell and started a crypto winter, bad actors took it as their opportunity. Platforms like Solana, Cardano, etc. have suffered from several exploits. The theft is mainly happening through smartly executed ideas. Phishing scams and fake airdrops are mentionable. Users' wallets are drained through luring through free tokens. In multiple cases, hacking links are also used as the weapon of scams. Nowadays, Twitter scams are also very famous in the crypto market. Where fake posts and links are circulated through the social media platform. Users are trapped in that kind of scam believing it is real.
