Read in the Digest:
- Sam Bankman-Fried attempted to destabilize USDT and crypto to save FTX
- Hong Kong’s SEC begins drafting regulatory framework for the crypto industry
- South Korea’s hunt for Terra’s co-founder Do Kwon leads to Serbia
- Senator Emmer calls for SEC’s Gensler to answer for ‘regulatory failures’
- Bank of England open application for Proof-of-Concept CBDC Wallet
Sam Bankman-Fried Attempted to Destabilize USDT and Crypto to Save FTX
In the wake of the FTX collapse, Sam Bankman-Fried, the exchange’s founder, reportedly tried to destabilize the Tether stablecoin and, with it, the broader crypto market in the last attempt to save his company.
In the Signal group chat, “Exchange coordination,” Changpeng Zhao, the CEO of the world’s largest crypto exchange, sent a flurry of messages warning Bankman-Fried that his trades could depeg USDT.
Responding to Alameda’s last-ditch attempt to raise funds through trade, Binance CEO reportedly confronted SBF, writing, “Stop trying to depeg stablecoins. And stop doing anything. Stop now, don’t cause more damage.”
Furthermore, the incident happened a day after Binance pulled out of the deal to acquire FTX. CZ has also tweeted that his company had become “increasingly uncomfortable with Alameda,” calling SBF a fraudster.
Flipsider:
- The fallen crypto billionaire, Sam Bankman Fried, has announced plans to start a new business to pay back FTX users who lost their money.
Why You Should Care
The failure of Bankman-Fried to depeg USDT is a testament to the stablecoin’s stability and shows how far FTX and Alameda Research were willing to go.
Hong Kong’s SEC Begins Drafting Regulatory Framework for Crypto Industry
Just days after the Legislative Council of Hong Kong approved the virtual asset bill, the Securities and Futures Commission (SFC) has begun drafting regulatory requirements for locally licensed virtual asset exchanges.
According to the SFC, FTX’s collapse “highlights the risks of retail investors using a virtual asset trading platform that is not fully regulated” and the “importance of a regulatory framework that protects investors.”
Since the collapse of FTX, the SFC has been closely monitoring the crypto industry. According to the RTHK report, the SFT will also launch a public consultation on future crypto issues.
Flipsider:
- Hong Kong’s virtual asset service providers (VASP) licensing regime will come into effect on June 1, 2023, three months later than initially planned.
Why You Should Care
Hong Kong continues to back its position in the cryptocurrency industry despite the recent collapse of FTX.
South Korea’s Hunt for Terra’s Co-Founder Do Kwon Leads to Serbia
Terra’s co-founder became crypto’s most wanted man after overseeing a $60 billion ecosystem collapse. On September 14th, a South Korean court issued an arrest warrant for Kwon but has persistently evaded authorities.
Three months later, South Korean authorities traced Kwon’s hideout to Serbia. Authorities received intel on his location and have confirmed the Terra co-founder is in the Balkan nation.
According to the report, the South Korean Ministry of Justice requested the Serbian government’s assistance in locating and detaining Kwon. The fugitive from justice was previously reported to be in Dubai.
Because Kwon’s passport has been invalidated, it is even more difficult to detect any accurate entry/exit record for the former Terra boss. Kwon could have already crossed Serbia’s border.
Flipsider:
- Kwon failed to provide the promised details of where he is after vowing to end the speculation around his mysterious location and inviting police to his conference.
Why You Should Care
Kwon has been charged with fraud and breaches of capital markets law in South Korea due to the collapse of his TerraUSD and LUNA in May.
Senator Emmer Calls for SEC’s Gensler to Answer for ‘Regulatory Failures’
Tom Emmer, the representative for Minnesota’s 6th congressional district, has demanded that Gary Gensler, the Securities and Exchange Commission Chairman, speak before Congress about his approach to regulating crypto.
The senator said on Twitter that the SEC boss, who has been criticized over his skewed approach, needs to “testify before Congress and answer questions about the cost of his regulatory failures.”
According to Emmer, Gensler’s information was ineffective, leading to the collapse of the $32 billion crypto exchange. He adds, “Efforts to gather info on crypto companies were not targeted, intentional, or clear.”
Emmer also criticized the SEC’s interactions with crypto companies. The crypto industry, according to him, does not need to be overburdened by extra-jurisdictional requirements.
Flipsider:
- Emmer also notes that Gensler had consistently avoided Congress, which caused him to miss information leading to the collapse of Terra/Luna, Celsius, Voyager, and FTX.
Why You Should Care
Gensler’s lack of transparency is ultimately hurting investors, who are on the losing end of the crypto collapse.
Bank of England Open Application for Proof of Concept CBDC Wallet
The Bank of England (BoE), the central bank of the United Kingdom, is offering £200,000 to companies to build a Proof of Concept crypto wallet for a Central Bank Digital Currency (CBDC).
The request posted on the U.K. Government’s Digital Marketplace offers a maximum of £200k for developing a basic version of a functional “Sample Wallet” that will be CBDC-compatible.
The team selected for the project will be expected to deliver a mobile wallet app and a wallet and merchant website. Additionally, they will provide a back-end server for the app and website, call the core ledger API, and store user data and transaction history.
The Wallet would have a signup process, details update, balance display, transactions, notifications, request P2P payments through an account ID or QR code, and serve as a means for online business payments.
Flipsider:
- The BoE is working on a project to issue and distribute a CBDC for payments interface providers (PIPs), mostly from the private sector.
Why You Should Care
The BoE says the CBDC concept will make the technology more tangible for stakeholders. It can also be used as a prototype for future user testing.