Recent times have been tumultuous for the crypto market. A lot of ups and downs have been witnessed as well. For example, the downfall of Terra and its assets occurred right before the globe, with all eyes on it. Various such instances have occurred that brings the plight of the crypto world into light such as losing pegs by UST, the issue of red notice against the founder Do Kwon by Interpol, etc. However, the problems do not seem to stop as new twists and turns keep rising in the case involving Do Kwon's arrest.
What is the new plot that emerged in the Do Kwon case?
A new dilemma has presented itself in the case involving the transfer of Bitcoin. As the reports suggested, a transfer of Bitcoin worth 69 million dollars has been discovered. This Bitcoin was transferred from that Luna Foundation guard to two crypto exchanges that are functioning outside the South Korean Territories. It has also been found that this transfer was done within a short span since the warrant was issued against Kwon.
What were the steps taken to correct it?
After the above-mentioned detail came to light, the South Korean entities took several steps to make it right. For example, they froze the Bitcoin that was transferred. After a thorough investigation it was also discovered that after the issue of the warrant on the 14th of September, the LFG made a wallet on the Binance platform, from who h the transfer took place. This transfer was done from LFG to two coin exchanges, namely Kucoin and OKX wallet.
The transaction that was done from LFG was not a one-time process but that occurred continuously for three days. The Kucoin wallet received almost as many as 1354 Bitcoin whereas the OKX wallet received almost 1959 Bitcoin which amounted to 39 million dollars.
How has the investigation been carried out?
With each passing moment and with each investigation, new information is coming to light that raises all the more questions and suspicion in the minds of people. However, the authorities have been delving deep into the matter and are leaving no stone unturned to get to the root of it all. The authorities involved in the investigation comprise Seoul Southern District Prosecutor’s Office and the Securities Crimes Joint Investigation Team.
After the investigation, they ordered both wallets to immediately freeze the assets they have received. The former agreed to the urges whereas the latter contested them by simply ignoring them.
Do Kwon and his involvement in the case
After the allegations that came to light and led to the arrest warrant, Do Kwon has reportedly commented that he was not hiding from the officials and that he was in constant communication with government officials. The huge transfer of money that was carried out from the LFG account just after the issue of the warrant, raised suspicion of that money being used as an evacuation fund.
It has been stated by the officials that whenever such an event occurs that involves sending and receiving money, it is most probably used for illicit activities or to cover up such activities.
Conclusion
Even though Kwon has denied any accusations that were brought against him, the government officials are still looking into the matter to bring the real truth to the public. It is the first and foremost priority to further the investigation necessary as well as put restrictions on the use of funds by Kwon. This step has been taken to put an end to all of the illegal activities done by Kwon, at least until the investigation is over.
Like many industries, the crypto industry is also not free from vices that affect its overall functioning and output. Therefore, certain checks and steps are necessary to prevent it from degrading to a higher extent. In the past few years, several such steps have been taken to keep the crypto industry in check. However, there have been various such instances wherein crypto mixers have also become a matter of concern.
In a recent report, the assistant secretary of the Treasury Department has said that putting sanctions on crypto miners can be of huge help. It can prevent the evil systems prevalent in it such as money laundering. It can spread across various countries such as North Korea, Russia, and Iran.
How can sanctions on cryptocurrency mixers be of help?
Elizabeth Rosenberg stated in a recent report that the enforcing of sanctions on entities such as crypto miners can be of huge help to the Government. It can be the best way to prevent foreign countries from making use of the crypto platform for various illegal activities. She, being the assistant secretary for terrorist financing and financial crimes came up with this suggestion as a preventive measure to make the digital currency platform a safer space for all.
Further comments on the crypto mixer sanction
There have been various steps taken towards the fulfillment of the above-mentioned goal. In one of the recent hearings of the Senate Banking, it has been quite vividly elaborated how the inclusion of various crypto mixers in the group of Specially designated nationals can work in favor of the US in letting foreign countries know the steps it is taking to prevent exploitation or breach of sanctions. These crypto mixers include blender.io, Tornado cash, etc. It is a step that has been deemed necessary to an extent that it has become almost mandatory.
Role of sanctions in preventing money laundering
It has been also been stated by Rosenberg that with the use of sanctions if prevention of usage of mixers for illicit activities can be encouraged, then it should and must be used likewise. It would be the best way to indicate or represent that the entity does not respond well to any sort of money laundering and prevent criminals from engaging in such activities. Does not matter which group or country they belong to, a criminal should be taken action against without any further consideration.
Some more information on the sanction on crypto mixers
Even though there have been several oppositions to this particular decision, it has still stood strong and held its ground. Its motive and aim have been questioned time and again for it, as per the views of the opposition, could bring about disastrous consequences. Several well-reputed entities like Coinbase even went as further as threatening to charge a lawsuit against the government authority for the step they have taken, especially for imposing sanctions on Tornado cash.
Conclusion
This particular government entity has directed its initiative towards those trying to use various Bitcoin assets and aimed at different Bitcoin addresses. These addresses included groups from Russia as well as Iran. However, it later made it clear that the Treasury does not aim at putting any sort of regulations on users which would affect the sharing of Tornado Cash's code on different websites. This declaration was made by the treasury in between the unrest and lack of clarity that is prevalent among crypto users for some time now. Needless to say, the crypto market being volatile is susceptible to changes that may or may not be accepted by each and everyone associated with it or affected by it.
Crypto-analyst Arthur Hayes says Hong Kong has a vital part to play in the development of the global Bitcoin and other virtual currencies market. The next cryptocurrency bull run, according to the former CEO of BitMEX, a market leader in cryptocurrency futures, will begin when China enters the market again.
The Hong Kong government's announcement about introducing a bill to regulate crypto is a sign that China is trying to ease its way back into the market. This could be because Hong Kong acts as "the proxy through which China interacts with the world," according to former Bitcoin co-creator Sean Hayes.
He commented, “When China loves crypto, the bull market will come back and It will be a slow process, but the red shoots are budding.”
As per Hayes, Hong Kong might serve as Beijing's test market for its experiments with cryptocurrency markets and as a conduit for Chinese capital entering the international cryptocurrency markets:
Further, he stated, “If these flows actually materialize in the way I imagine, they will be a strong supporting pillar of the next bull market.”
In a survey by Forex Suggest released in July 2022, Hong Kong has named the nation best poised for the broad adoption of cryptocurrencies. Numerous aspects were taken into account, including startup culture, crypto ATM installations, and crypto-friendly regulations.
Unfortunately, it is said that by the end of September this year, Hong Kong has lost this position partly because of its murky cryptocurrency regulations. Due to this, a number of significant crypto-focused companies and events were obliged to relocate their operations to Singapore and other nations and territories that were viewed as more welcoming.
Despite having one of the largest economies on earth, China has generally been hostile to the cryptocurrency sector. The nation's initial ban, which forbade banks from processing Bitcoin transaction, was enacted back in 2013.
When Beijing conducted numerous regulatory operations to banish Bitcoin mining from the nation and declared all cryptocurrency transactions to be banned in 2021, it stepped up its crackdown on the industry.
But as per Hayes, “China has not left crypto — it has just been dormant.”
In September 2022, China did start up its Bitcoin mining once more, and Chainalysis stated in its 2022 Global Crypto Adoption Index that China had re-entered the top ten this year after coming in 13th place in the previous year.
Given the Chinese government's assault on cryptocurrencies, the Global Crypto Adoption Index's authors said they considered the development "particularly noteworthy," but their data shows that "the prohibition has either been unsuccessful or lightly implemented."
How China is essential for Hong Kong's cryptocurrency growth?
Arthur Hayes, co-founder of BitMex, commented on news of Hong Kong's "comeback" efforts on his blog, saying that access to Chinese consumers is essential for Hong Kong's appeal to cryptocurrency businesses.
As cryptocurrency investors, we are concerned about Hong Kong's capacity to meet China's capital needs, he stated. The regular wealthy Chinese people are what drive the Hong Kong economy, whether it is through retail sales or capital flows.
He also voiced concerns about how China could use its influence over Hong Kong to undermine any pro-crypto measures such as, "What's to say Beijing won't reconsider tomorrow and roll back all these advantageous crypto policies?"
But he went on to say that he thought this time, "China is for real."
Conclusion
By the end of the month, the nation is anticipated to make its position on digital assets known. As previously reported, the Hong Kong Special Administrative Region of China will make a policy announcement at the next Hong Kong Fintech Week event, which is set to take place between October 31 and November 1.
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.
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.
