South Korea mortgage-backed securities MBS issuance more than tripled in the third quarter due to solid demand for government-backed mortgage loans

S. Korea's mortgage-backed securities issuance triples in Q3

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Court Adjourns Suit Filed On Nigerians’ Behalf Against DMO’s Bid To Securitize N23trn Ways And Means Loan

The federal government has formulated a plan to securitize approximately $7 billion in dividends derived from the Nigerian Liquefied Natural Gas (NLNG).

$7 billion inflow: Nigeria’s naira set to soar as government securitizes NLNG dividends

As part of efforts to boost foreign currency liquidity in the economy and strengthen foreign exchange (FX), the federal government has concluded plan to Securitize about $7 billion of the country’s dividends from the Nigerian Liquefied Natural Gas (NLNG).

Nigeria Moves to Securitise NLNG Dividends for $7bn Cash

DBRS says 98.2% of the loans have been performing since origination, while just 1.8% of the pool is 30 to 59 days delinquent in payments.

Bravo Residential Funding prepares to sell $329.8 million in prime RMBS

The Nissan Auto Receivables Owner Trust program is preparing to issue at least $1 billion in asset-backed securities, with a pool of prime-quality, retail installment auto loan contracts serving as collateral, in a deal that references two potential pools ...

Nissan Auto expects to securitize more than $1 billion in auto loans

Additionally, Securitize recently voiced its support for the XDC Network. Notably, they highlighted the U.S. Treasury Yield (USTY) token, a product of the XDC Network. The USTY token offers cost ...

Ankr and XDC Network form alliance for web3 advancements

A majority of the commercial real estate CLO's collateral has pari-passu participations, including 18 that have a related obligation for an unfunded future advance.

A10 BAF is preparing to sell $308.4 million

Tilewa Adebajo, a corporate finance expert and economist, has strongly asserted that any attempts by the Federal Government and the Central Bank of

FG can’t securitize ‘ways and means’ without amending CBN Act, says economist

Ifeoma John, a legal practitioner living in Lagos, applied for a driver’s licence from the Federal Road Safety Commission (FRSC) two months ago. It usually takes a month after the application to get the licence. But officials at the agency have been ...

Nigerians thirst for high-speed internet amid bandwidth glut

Securitize

securitize-inc

New Fund Unlocks Broader Access to Alternative Investment Through Digital Ownership on Avalanche Securitize, a leading digital asset securities firm, today announced the launch of a fund tokenizing an interest in KKR’s Health Care Strategic Growth Fund II (“HCSG II”) on the Avalanche public blockchain. This is a major step toward making institutional private market strategies more accessible to individual investors. The new Securitize tokenized fund (the “Fund”) marks the first time exposure to one of KKR’s alternative investment strategies has been offered in a digital format in the U.S. The Fund is managed by Securitize’s digital asset management arm, Securitize Capital, and provides exposure to KKR’s health care growth equity investing strategy. Historically, investments in private market funds have been primarily available to large institutional investors and ultra-high-net-worth individuals. Unlocking broader access to private market investing has been a long-standing challenge for the industry. Tokenization helps solve this by enabling technology to deliver lower investment minimums, improved digital investor onboarding and compliance protocols, and increased potential for liquidity through a regulated alternative trading system. “Tokenization has the potential to address many of the biggest challenges for individual investors seeking to participate in private market investing by enabling technological and product innovations that were not possible before,” said Securitize CEO Carlos Domingo. “This new fund is an important step toward democratizing access to private equity investments by delivering more efficient access to institutional quality products.” KKR’s adoption of blockchain is also a significant step in continuing to build a “ ” from paper-based to digital financial products. blockchain bridge “With its ability to digitize operational inefficiencies and increase ease of use for individual investors, blockchain technology has the potential to play an important role in the future of private markets,” said Dan Parant, Managing Director and Co-Head of U.S. Private Wealth at KKR. “We’re excited to be working with Securitize to be an early adopter of this technology and look forward to opening our investments up to a new audience of investors.” The Securitize tokenized fund is offered under SEC Reg D 506(c) and Securitize is tokenizing the Fund on the Avalanche public blockchain. KKR’s HCSG II Fund, to which the Fund provides exposure, invests in innovative health care companies in North America and Europe with proven products and services that are seeking a partner to commercialize and scale. Avalanche is an eco-friendly smart contract platform built for the scale of global finance. It features near-instant transaction finality, and a novel scaling technology that enables both institutions and individuals to build custom blockchains-as-a-service. Ava Labs is a team supporting the development of Avalanche, and projects building on the network. “Financial markets demand innovation, and over the last two years we’ve seen dramatic leaps forward in the evolution of real world assets moving on-chain and delivering on the promise of breakthrough technology for institutions,” said John Wu, President of Ava Labs. “This strategic partnership will surely spur more blockchain activity among leading investment firms who are now equipped with both the technology and knowledge they need to form an impactful strategy.” “Securitize is now a leading tokenization and distribution platform for investors and global asset managers,” said Wilfred Daye, Head of Securitize Capital. “The tokenized fund we have developed is a significant breakthrough in unlocking investor access to private equity investments.” As a leading digital asset securities firm, Securitize is a leader in firsts: it operates the first and only end-to-end platform leveraging blockchain to raise capital, onboard investors, issue tokenized assets, and provide secondary trading; it launched the first credit-rated tokenized fund in Japan; and is the first blockchain-based firm to be a top 10 stock transfer agent. About Securitize and Securitize Capital Securitize is a digital asset securities firm with a mission to provide shareholders access to invest in and trade alternative investments, and for companies to raise capital, manage shareholders, and offer shareholders potential liquidity. Securitize has pioneered a fully digital, all-in-one platform for issuing, managing and trading digital asset securities, consistent with the existing U.S. regulatory framework, with a community of over 1.2 million investors and 3,000 businesses connected. Securitize is comprised of Securitize, Inc. and its subsidiaries Securitize, LLC and Pacific Stock Transfer (both SEC-registered transfer agents), Securitize Capital, LLC, Securitize Markets, LLC (an SEC-registered broker-dealer, member of and , and operator of the company’s alternative trading system). Learn more at . FINRA SIPC http://www.securitize.io Securitize Capital is the first digital asset management platform that manages and tokenizes institutional-grade products, leveraging a blockchain-enabled capital market structure, tailoring innovative financial products that broaden investor access and exposure to alternative assets, cryptocurrencies, and emerging asset classes. Learn more at . www.securitize.io/securitize-capital About KKR KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at and on Twitter @KKR_Co. www.kkr.com About Avalanche Avalanche is the fastest smart contracts platform in the blockchain industry, as measured by time-to-finality, and has the most validators securing its activity of any proof-of-stake protocol. Avalanche is blazingly fast, low cost, and green. Any smart contract-enabled application can outperform its competition by deploying on Avalanche. Don’t believe it? Try Avalanche today.

Securitize Launches Tokenized Fund on Avalanche, Unblocking Broader Access to Alternative Investment

SEC v. Terraform Court Filing, retrieved on February 16, 2023, is part of . You can jump to any part in this filing . This is part 8 of 38. HackerNoon’s Legal PDF Series here I. Defendants Created and Developed the Terraform Ecosystem. 31. In March 2018, Defendants began creating the Terraform ecosystem. Kwon and Terraform's co-founder published a white paper announcing the Terraform blockchain (referred to as the "Terra protocol") and the LUNA token, the first crypto asset created by Terraform. Eventually, the ecosystem would come to include a series of interconnected crypto assets whose purported adoption, liquidity, and value became highly dependent on the public's willingness to buy into Terraform and Kwon's blockchain empire. 32. In April 2019, Kwon and others published another white paper, entitled "Terra Money: Stability and Adoption," that announced the adoption of so-called “stable-coins," including one later named UST, which Terraform described as the "lynchpin" of Defendants" interrelated "ecosystem" of crypto assets. 33. In the April 2019 white paper and elsewhere, Defendants stated that UST's value was pegged to the U.S. dollar by virtue of an algorithm tying UST's value to LUNA. Specifically, this algorithm sought to maintain UST's price at $1.00 through a complex system in which, rather than being backed by actual dollars, UST would be created, or "minted," and "burned," or destroyed, in parallel with Terraform's companion token, LUNA. For example, holders of LUNA could swap $1.00 worth of LUNA for I UST based on LUNA's then-current market price. And holders of UST could likewise exchange 1 UST for $1.00 worth of LUNA. The algorithm theoretically provided an arbitrage opportunity for traders to help keep the price of UST pegged at one dollar. If, for example, UST slipped to $0.95, traders could buy UST at that price and exchange it for $1 of LUNA "burning" UST and "minting" LUNA. Doing so reduced the supply of UST and, in theory, would increase its price until it reached a dollar. 34. On or about April 24, 2019, Terraform and Kwon officially launched the Terraform blockchain and created one billion LUNA tokens. Kwon wrote the code underlying the initial version of the blockchain. As described in more detail below, Terraform and Kwon offered and sold LUNA to investors to raise funds to develop the Terraform blockchain and ecosystem. During the Relevant Period, Terraform maintained over a hundred code repositories that enabled Terraform employees, including Kwon, to create, contribute, maintain, and update the Terraform blockchain protocols. 35. Throughout the Relevant Period, Terraform and Kwon continued to develop and market the Terraform blockchain and related protocols and crypto assets, which they promoted as profit opportunities for investors. In September 2020, for example, Terraform and Kwon began publicly marketing UST as a "yield bearing" stablecoin together with something they called the Anchor Protocol. Terraform launched the Anchor Protocol in March 2021, with Defendants advertising rates of return of 19-20% on investors' deposited UST, leading to significant investor demand for UST. 36. The total amount of UST, which was first "minted" in June 2019, was slow to grow, with under 300 million UST circulating by early 2021. In the 2 months following the launch of the Anchor Protocol, the number of UST in circulation increased by close to one billion. By May 2022, there were approximately 19 billion UST, with 14 billion deposited in the Anchor Protocol. 37. Over time, Defendants created other protocols and crypto asset securities. In December 2020, Defendants launched the "Mirror Protocol," which they continued to develop and maintain. The Mirror Protocol allowed users to create what Terraform called an "mAsset," short for "mirrored asset", which was designed to track or "mirror" the price of equity securities or other types of securities, including U.S. equity securities. For example, mAssets designed to "mirror" the stock of Apple, Inc. were named "mAAPL" and were designed so that their value increased and decreased with the value of Apple, Inc. stock. As Terraform explained on its website, "mAssets mimic the price behavior of real-world assets and give traders anywhere in the world open access to price exposure without the burdens of owning or transacting real assets." 38. The Mirror Protocol also provided users with the ability to obtain a "MIR token," the so-called "governance token"[2] for the Mirror Protocol. MIR tokens received value based upon, among other things, fees generated under the Mirror Protocol. [2] "Governance tokens" are tokens that can, among other features, purportedly give their holders voting power over the development and structure of the protocol or blockchain, including the right to propose changes. Continue Reading . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case 1:23-cv-01346 retrieved on September 12, 2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. sec.gov

The Creation of the Terraform Ecosystem: How Do Kwon Did It

SEC v. Binance Court Filing, retrieved on June 5, 2023 is part of . You can jump to any part in this filing . This is part 1 of 69. HackerNoon’s Legal PDF Series here Plaintiff Securities and Exchange Commission (the “SEC” or the “Commission”), for its Complaint against Defendants Binance Holdings Limited (“Binance”), BAM Trading Services Inc. (“BAM Trading”), BAM Management US Holdings Inc. (“BAM Management”), and Changpeng Zhao (“Zhao”), alleges as follows: SUMMARY 1. This case arises from Defendants’ blatant disregard of the federal securities laws and the investor and market protections these laws provide. In so doing, Defendants have enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk. 2. Defendants have unlawfully solicited U.S. investors to buy, sell, and trade crypto asset securities through unregistered trading platforms available online at Binance.com (“Binance.com Platform”) and Binance.US (“Binance.US Platform”) (collectively, “Binance Platforms”). Defendants have engaged in multiple unregistered offers and sales of crypto asset securities and other investment schemes. And Defendants BAM Trading and BAM Management defrauded equity, retail, and institutional investors about purported surveillance and controls over manipulative trading on the Binance.US Platform, which were in fact virtually non-existent. 3. First, Binance and BAM Trading, under Zhao’s leadership and control, have unlawfully offered three essential securities market functions—exchange, broker-dealer, and clearing agency—on the Binance Platforms without registering with the SEC. Acutely aware that U.S. law requires registration for these functions, Defendants nevertheless chose not to register, so they could evade the critical regulatory oversight designed to protect investors and markets. 4. Second, Binance and BAM Trading have unlawfully engaged in unregistered offers and sales of crypto asset securities, including Binance’s own crypto assets called “BNB” and “BUSD,” as well as Binance’s profit-generating programs called “BNB Vault” and “Simple Earn,” and a so-called “staking” investment scheme available on the Binance.US Platform. In so doing, they have deprived investors of material information, including the risks and trends that affect the enterprise and an investment in these securities. 5. Third, BAM Trading and BAM Management have made misrepresentations to investors about controls they claimed to have implemented on the Binance.US Platform, while raising approximately $200 million from private investors in BAM Management and attracting billions of dollars in trading volume from investors (including retail and institutional investors) seeking to transact on the Binance.US Platform. 6. Starting in or around 2018, determined to escape the registration requirements of the federal securities laws, Defendants—under Zhao’s control—designed and implemented a multi-step plan to surreptitiously evade U.S. laws. As Binance’s Chief Compliance Officer (“Binance CCO”) admitted, “we do not want [Binance].com to be regulated ever.” 7. As one part of this plan to evade United States regulatory oversight over Zhao, Binance, and the Binance.com Platform, Zhao and Binance created BAM Management and BAM Trading in the United States and claimed publicly that these entities independently controlled the operation of the Binance.US Platform. Behind the scenes, however, Zhao and Binance were intimately involved in directing BAM Trading’s U.S. business operations and providing and maintaining the crypto asset services of the Binance.US Platform. BAM Trading employees referred to Zhao’s and Binance’s control of BAM Trading’s operations as “shackles” that often prevented BAM Trading employees from understanding and freely conducting the business of running and operating the Binance.US Platform—so much so that, by November 2020, BAM Trading’s then-CEO told Binance’s CFO that her “entire team feels like [it had] been duped into being a puppet.” 8. As a second part of Zhao’s and Binance’s plan to shield themselves from U.S. regulation, they consistently claimed to the public that the Binance.com Platform did not serve U.S. persons, while simultaneously concealing their efforts to ensure that the most valuable U.S. customers continued trading on the platform. When the Binance.US Platform launched in 2019, Binance announced that it was implementing controls to block U.S. customers from the Binance.com Platform. In reality, Binance did the opposite. Zhao directed Binance to assist certain high-value U.S. customers in circumventing those controls and to do so surreptitiously because—as Zhao himself acknowledged—Binance did not want to “be held accountable” for these actions. As the Binance CCO explained, “[o]n the surface we cannot be seen to have US users[,] but in reality, we should get them through other creative means.” Indeed, Zhao’s stated “goal” was “to reduce the losses to ourselves, and at the same time to make the U.S. regulatory authorities not trouble us.” 9. Defendants’ purposeful efforts to evade U.S. regulatory oversight while simultaneously providing securities-related services to U.S. customers put the safety of billions of dollars of U.S. investor capital at risk and at Binance’s and Zhao’s mercy. Lacking regulatory oversight, Defendants were free to and did transfer investors’ crypto and fiat assets as Defendants pleased, at times commingling and diverting them in ways that properly registered brokers, dealers, exchanges, and clearing agencies would not have been able to do. For example, through accounts owned and controlled by Zhao and Binance, billions of U.S. dollars of customer funds from both Binance Platforms were commingled in an account held by a Zhaocontrolled entity (called Merit Peak Limited), which funds were subsequently transferred to a third party apparently in connection with the purchase and sale of crypto assets. 10. Moreover, Defendants understood the importance to crypto asset investors of implementing trading surveillance and controls over crypto trading platforms. Zhao himself stated in 2019 that “CREDIBILITY is the most important asset for any exchange! If an exchange fakes their volumes, would you trust them with your funds?” 11. Defendants BAM Trading and BAM Management touted the surveillance and controls supposedly in place to prevent manipulative trading on the Binance.US Platform. 12. But Defendants failed to implement on the Binance.US Platform the trade surveillance or manipulative trading controls BAM Trading and BAM Management touted to investors. Thus, Defendants failed to satisfy basic requirements of registered exchanges—to have rules designed to prevent fraudulent and manipulative acts and the capacity to carry out that purpose. The supposed controls were virtually non-existent, and those that did exist did not monitor for or protect against “wash trading” or self-dealing, which was occurring on the Binance.US Platform. Most notably, from at least September 2019 until June 2022, Sigma Chain AG (“Sigma Chain”), a trading firm owned and controlled by Zhao, engaged in wash trading that artificially inflated the trading volume of crypto asset securities on the Binance.US Platform. 13. Congress enacted the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”) in part to provide for the regulation of the offer and sale of securities and the national securities markets through registration and attendant disclosure, recordkeeping, inspection, and conflict-of-interest mitigation requirements. Binance and BAM Trading—both under Zhao’s control—have engaged and continue to engage in unregistered offers and sales of crypto asset securities, effecting unregistered crypto asset securities transactions on the Binance Platforms, combining core securities market functions while purposefully evading registration, and operating while impaired by obvious conflicts of interest. In doing so, they have dodged the disclosure and other requirements that Congress and the SEC have constructed over the course of decades to protect our capital markets and investors and thereby have violated—and continue to violate—the law. Continue Reading . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case 1:23-cv-01599 retrieved on September 5, 2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. docdroid.net

SEC Accuses Binance of Violating Federal Security Laws 

FTX + SBF Chapter 11 (Bankruptcy) Court Filing by John J. Ray III, Nov 17, 2022 is part of . You can jump to any part in this filing . This is part 8/20 HackerNoon’s Legal PDF Series here Feature Image: Stable Diffusion AI, Prompt “Let the adults in” III. ACTION TAKEN SINCE MR. BANKMAN-FRIED’S DEPARTURE A. New Governance Structure 46. Many of the companies in the FTX Group, especially those organized in Antigua and the Bahamas, did not have appropriate corporate governance. I understand that many entities, for example, never had board meetings. 47. The following new independent directors (the “Directors”) have been appointed as directors of the primary companies in the FTX Group: (a) : Mitchell Sonkin is currently a Senior Advisor to MBIA Insurance Corporation in connection with the restructuring of the Firm’s insured portfolio exposure of the Commonwealth of Puerto Rico’s $72 billion of outstanding debt. He is also currently Chairman of the Board of the ResCap Liquidating Trust, successor to ResCap and GMAC Mortgage Corporations. Before joining MBIA, Mr. Sonkin was a senior partner at the international law firm, King & Spalding, where he was co-chair of King & Spalding’s Financial Restructuring Group and a member of the firm’s Policy Committee. He has over 40 years of experience in U.S. and international bond issuances, corporate reorganizations, bankruptcies and other debt restructurings and has served as a bankruptcy-court-appointed examiner. In particular, he has played a significant role in numerous municipal, utility, insurance, airline, healthcare debt and international debt restructurings including the Anglo/French Euro Tunnel debt reorganization. WRS Silo: Mitchell I. Sonkin (b) : Mr. Rosenberg is a Partner at Lincoln Park Advisors, a financial advisory firm that he founded in 2014. He has more than 25 years of restructuring, corporate finance, principal investing, operating and board experience. Prior to founding Lincoln Park Advisors, he was a partner at the restructuring and investment banking firm Chilmark Partners, a partner in two private equity funds, the Zell/Chilmark Fund and Chilmark Fund II, the Chief Restructuring Officer of The Wellbridge Company and a member of multiple corporate boards. His restructuring advisory experience includes such companies as OSG, Supermedia, Nortel, Trinity Coal, USG Corporation, JHT Holdings, Inc., Covanta Energy, Sirva, Lodgian, Inc., ContiGroup Companies, Inc., Fruit of the Loom, Ltd. and Recycled Paper Greetings. Alameda Silo: Matthew R. Rosenberg (c) : Mr. Jain is a Managing Director and CoHead of the Western Region of Accordion, a financial and technology consulting firm focused on the private equity industry. He has more than 25 years of experience supporting management teams and leading finance and operations initiatives in both stressed and distressed environments. Prior to joining Accordion, Mr. Jain was part of Alvarez & Marsal’s corporate restructuring and turnaround practice for over 10 years and served in a variety of senior financial operating roles. His most notable assignments have included helping lead the restructuring, liquidation and wind down of Washington Mutual and its predecessor entity, WMI Liquidating Trust. He also navigated the restructuring of Global Geophysical Services in its chapter 11 and eventually the liquidation and wind down in its second chapter 11 filing. Ventures Silo: Rishi Jain : Mr. Farnan served as a United States District Judge for the District of Delaware from 1985 to 2010. He served as Chief Judge from 1997-2001. During his tenure, Mr. Farnan presided over numerous bench and jury trials involving complex commercial disputes. Prior to his appointment to the federal bench, Mr. Farnan was appointed to several positions in local, state and the federal government returning to private practice in 2010 with the formation of Farnan LLP, a law firm focused on complex commercial matters, including chapter 11 proceedings, securities litigation, antitrust litigation and patent litigation. Additionally, Mr. Farnan serves as an arbitrator, mediator, independent director and trustee of businesses contemplating or filing chapter 11 bankruptcy. (d) Dotcom Silo: The Honorable Joseph J. Farnan (Lead Independent Director) : Mr. Doheny is President of North Country Capital LLC, an advisory and investment firm focused on challenging advisory assignments and investing private investment portfolios in special situation opportunities. He has held this position since January 2011. Mr. Doheny has served on the board of directors or as Chief Restructuring Officer of numerous stressed and distressed companies, including Yellow Corp., MatlinPatterson, GMAC Rescap and Eastman Kodak. He was also Managing Director and Head of Special Situations Investing at HSBC Securities Inc. from 2015 to 2017. Previously, Mr. Doheny served as Portfolio Manager in Special Situations at Fintech Advisory Inc. from 2008 to 2010 and as Managing Director of the Distressed Products Group at Deutsche Bank Securities Inc. from 2000 to 2008. (e) Dotcom Silo: Matthew A. Doheny 48. The appointment of the Directors will provide the FTX Group with appropriate corporate governance for the first time. 49. The Directors intend to hold joint board meetings of the Debtors on matters of common interest, including (a) the implementation of controls, (b) asset protection and recovery, (c) the investigation into claims against the founders and third parties, (d) cooperation with insolvency proceedings of subsidiary companies in other jurisdictions and (e) the maximization of value for all stakeholders through the eventual reorganization or sale of the Debtors’ complex array of businesses, investments and property around the world. The Directors will implement appropriate procedures for the resolution of any conflicts of interest among the Silos and, if necessary, within the Silos as the case progresses, including the potential engagement of independent counsel to represent various Debtors in the resolution of intercompany claims against other Debtors. I expect there to be a multitude of intercompany claims that will benefit from fair resolution under the rules and conventions of U.S. chapter 11 practice in the District of Delaware for complex, multi-Debtor cases. For the time being, my belief is that all stakeholders are best served by a coordinated and centralized administration. Continue reading here

FTX 'did not have appropriate corporate governance', 'never had board meetings', says John Ray

FTX 'no tenía un gobierno corporativo apropiado', 'nunca tuvo reuniones de directorio', dice John Ray

FTX "n'avait pas de gouvernance d'entreprise appropriée", "n'a jamais eu de réunions du conseil d'administration", déclare John Ray

जॉन रे कहते हैं, एफटीएक्स के पास 'उचित कॉर्पोरेट प्रशासन नहीं था', 'कभी बोर्ड मीटिंग नहीं हुई'

FTXは「適切なコーポレートガバナンスを持っていなかった」、「取締役会を開催したことがない」とジョン・レイは言う

FTX 'não tinha governança corporativa adequada', 'nunca teve reuniões do conselho', diz John Ray

John Ray nói FTX 'không có quản trị công ty phù hợp', 'không bao giờ có cuộc họp hội đồng quản trị'

FTX“没有适当的公司治理”，“从未召开过董事会会议”，John Ray 说

‍I was recently asked to speak as part of a panel on CSE TV about cryptocurrencies and blockchain technology. One of the questions we were asked was about billionaire Charlie Munger’s . view on cryptocurrency He has said on various occasions that he wished cryptocurrency had never been invented and crypto was for people who wanted to get rich quickly by doing very little for civilization. The argument that the stock market is somehow more legitimate than the cryptocurrency market is false if one understands how the current financial system works. People like Charlie Munger who have profited greatly from the like to portray crypto investors as lowlifes and bottom feeders while Wall Street brokers and hedge as pillars of the community and are shining examples of capitalism. traditional stock market fund managers What Does the Stock Market Really Do? To understand Munger’s comments we need to first take a brief look at those who profit the most from how the financial system operates – the hedge fund managers. A operates the private investment vehicles that typically only America’s wealthiest people can afford. Hedge fund managers try and control and often manipulate the stock market for their own gains. hedge fund manager They often anger the middle class and average investors when they squeeze profit out of a company for short-term gains, regardless of the long-term consequences – often causing layoffs, mergers, and or bankruptcies such as in or . Sears Trans World Airlines While one couldn’t predict the future of these companies – there are only a handful of Sears left in the United States and Trans World Airlines went out of business in 2001 – hedge fund managers and corporate raiders do nothing to try and build the economy. To achieve high returns on their investments for both themselves and their clients, hedge fund managers often participate in questionable financial practices such as selling junk bonds, short selling, and subprime mortgages as was the case in the . 2008 recession While governments half-heartedly pretended to clean up Wall Street during the subprime crisis, these dubious, sometimes-illegal practices are largely still practiced today. The true difference between the stock market and the crypto market is when people steal in the crypto market they are labelled as scammers and thieves but when people steal in the stock market, there are almost . no consequences During the entire subprime crisis, no CEO went to jail and only one banker was ever put behind bars. In fact, the white-collar crime prosecution rate seems to be dropping along with the number of reported white-collar crimes. In the 80s and 90s, there were around 10,000 prosecutions a year in the United States. But in 2019 the number of prosecutions was only 5,000 – the lowest it’s been since 1986, according to Bajoka Law Group. white-collar crime Because of the lack of accountability, there has been increasing anger against hedge fund managers and the inequity in the stock market in general. So much so, that a bunch of Reddit users decided to band together and teach hedge fund managers a lesson. When the hedge fund managers decided to short a stock called GameStop, the Reddit users decided they would keep buying the stock, driving the stock up causing the hedge fund managers to lose billions of dollars. Some major brokers like Robinhood and Webull panicked, on the stock. halted trading The stockbrokers cited ‘extreme volatility” as the reason for suspending GameStop trading when in fact it was to protect the hedge fund managers. There have been cases in the past where trading has stopped because a stock had dropped suddenly which is called a circuit breaker; this is to prevent panic selling, but rarely – if ever – is it used when a stock goes up in value. Investors everywhere rightly cried foul when GameStop was halted. But as per usual nothing ever changed to level the playing field for the average investor. When a few powerful brokers can halt trading to protect hedge funds but not small individual investors, the system is no longer fair or equal and it becomes increasingly hard to argue otherwise. So is the stock market for people who want to get rich quickly and do little for civilization but line their own pockets? Charlie Munger is defending a system that is designed to keep making money for the rich and those who have no money or power from taking advantage of the system. One way that Charlie Munger has made a profit from a scam was during the Wells Fargo fraud scandal in 2016. The bank created millions of fake savings and checking accounts on behalf of their clients without their knowledge. clients began to notice unauthorized fees being charged to their accounts. In addition, lines of credit and credit cards were opened up without authorization. Wells Fargo The initial blame was given to branch managers but later shifted to executives who pressured account managers to open as many accounts as possible. The regulatory bodies found out and fined the company $185 million as a result of this illegal activity. The company faced civil and criminal suits. However, nobody went to jail. As for the Wells Fargo Stock? It took a little hit but kept climbing, unaffected by the scams. Charlie Munger is also an investor in Bank of America.  In August 2014, Bank of America agreed to a near-$17 billion deal to against it relating to the sale of toxic mortgage-linked securities including subprime home loans, in what was believed to be the largest settlement in U.S. corporate history. settle claims Now to be clear in no way did Carlie Munger orchestrate any of these scams or schemes and most likely didn’t know about them but regardless he was able to profit immensely from them. And when he criticizes crypto he is either disregarding his own profiteering off the companies that have either acted unethically or committed illegal acts. And what’s more, he continues to invest in these companies (As of this writing he 1.59 million shares of Wells Fargo worth roughly $76 million and 2.2 million shares of Bank of America worth just over $100 million.) voting with his money that it’s okay for these companies to disregard the law. owns ‍ No Monetary System is Perfect Cryptocurrency is not perfect but Web3-enthusiasts and those working ethically within the blockchain ecosystem are aiming to create a better more fair system. However, there are plenty of bad actors trying to take advantage of the lack of regulations and the anonymity that comes with the space, but is it any better or worse than the stock market and fiat currencies in general? Unfortunately, greed is a human trait and it will be present in any system we create. There are plenty of great crypto and blockchain projects out there – far more than bad ones, just like the average person who invests in the stock market isn’t trying to lie, cheat, or steal. But in the crypto space, there are no so you have to be extremely careful when choosing to invest in a project; there is a good chance you’ll lose money. regulatory bodies As for the accusation that crypto companies are just out to make money and do not care about the economy? It only takes a quick glance to realize there are plenty of amazing crypto projects that aim to form online robust communities that can support creators in building amazing games, art, and platforms, among other things. These communities do not just benefit those who have money to invest but anyone can make money – and a living through what has been built. Final Thoughts In business as in the crypto space, people lose their way; either people become too greedy, they lose sight of what’s important or the business just becomes too unmanageable. The eventual aim of crypto and blockchain is that it will democratize investing so you don’t have to go through a broker and that a few brokers can’t halt a trade on the platform just because it’s not good for their business. It’s not that cryptocurrency offers something better than the stock market, it’s that it has the potential to offer ordinary people more control over what they invest in. While we clearly aren’t there yet, we can hope that one day we won’t have to worry about another recession because banks, hedge fund managers and other investors try to game the system. That the system won’t be one-sided towards the wealthy and powerful. But for this to happen cryptocurrencies will need to be regulated, but it needs to be done thoughtfully while still allowing the ability to innovate. Hussein Hallak

Is the Stock Market More Legitimate Than the Cryptocurrency Market?

¿Es el mercado de valores más legítimo que el mercado de criptomonedas?

Le marché boursier est-il plus légitime que le marché des crypto-monnaies ?

क्या शेयर बाजार क्रिप्टोक्यूरेंसी बाजार से ज्यादा वैध है?

株式市場は暗号通貨市場よりも正当ですか?

O mercado de ações é mais legítimo que o mercado de criptomoedas?

Thị trường chứng khoán có hợp pháp hơn thị trường tiền điện tử không?

股票市场比加密货币市场更合法吗？

The Darkhorse Dapp Killer: A Deep Dive into The Tezos Architecture, Governance, and Scalability

Decentralized Finance (DeFi) has disrupted the financial industry, providing new opportunities for investors, developers, and businesses. DeFi allows users to lend, borrow, trade, and invest without relying on centralized control by eliminating go-betweens such as banks and traditional financial institutions. However, with the innovation DeFi brings, it also introduces various legal challenges. In 2024, navigating these hurdles is more critical than ever as regulators increase their scrutiny of this rapidly growing sector. DeFi startups must stay ahead of evolving regulations to avoid potential legal issues. Major areas of concern include anti-money laundering (AML) compliance, securities laws, and the decentralized nature of these platforms, which makes enforcing regulations more complex. To succeed in the DeFi space, companies need to be aware of these challenges and adopt proactive measures to ensure they operate within the boundaries of the law. Anti-Money Laundering (AML) Compliance AML compliance is one of the most pressing legal challenges for DeFi startups. Traditional financial institutions are subject to strict AML regulations to forestall money laundering, terrorist financing, and other illicit activities. In contrast, DeFi platforms, which operate without centralized oversight, present unique challenges in monitoring and enforcing AML requirements. For regulators, DeFi represents a potential risk because transactions occur directly between users, often with a level of anonymity that could be exploited for illegal purposes. Global regulators are increasing pressure on DeFi platforms to implement AML measures. That includes adhering to the Financial Action Task Force's (FATF) "travel rule," which requires the identification of both the sender and receiver of funds in digital asset transactions. For DeFi startups, complying with AML laws can be difficult, especially when the platform is designed to operate without user accounts or centralized control. However, failure to comply can result in severe penalties, including fines or even shutting down. Many companies are turning to blockchain law firms for guidance on implementing AML protocols while maintaining the decentralized nature of their platforms. Securities Laws and DeFi Tokens Another significant legal concern is the classification of DeFi tokens as securities. Regulatory bodies worldwide are struggling with how to classify digital assets. Suppose a DeFi token is classified as a security in the US. In that case, it becomes subject to securities laws, which include strict registration and disclosure requirements. The challenge for DeFi startups is that many tokens used on their platforms might be considered securities under existing frameworks, even if they are intended for utility purposes. Suppose regulators determine that a token qualifies as a security. In that case, it must comply with the same regulations that apply to traditional securities, including registering with the appropriate regulatory body. Failing to do so can result in fines, penalties, lawsuits, and damage to a startup's reputation. Regulators are expected to clarify the rules surrounding token classifications in 2024, but until then, startups are operating in a legal gray area. DeFi projects must be cautious when issuing tokens to ensure they are not unintentionally violating securities laws. Decentralization and Regulatory Uncertainty The decentralized nature of DeFi platforms presents a unique legal challenge. Traditional financial institutions operate within a clear regulatory framework, with designated authorities overseeing their activities. DeFi platforms, however, often function without a central authority, making it difficult for regulators to hold any specific party accountable when something goes wrong. The lack of a central entity means that there is no obvious party for regulators to pursue in the event of a hack, fraud, or other illegal activity. That raises questions about who bears responsibility for ensuring compliance with financial regulations on DeFi platforms. It also complicates the enforcement of consumer protection laws designed to safeguard users from fraudulent schemes or loss of funds. As regulators work to establish clearer guidelines for DeFi, startups must be prepared for a rapidly changing legal environment. Many DeFi companies seek legal expertise to help them navigate the complexities of operating in a decentralized ecosystem while staying compliant with local and international laws. The Role of Blockchain Law Firms For DeFi startups facing these legal challenges, seeking guidance from experts in blockchain law is essential. They specialize in navigating decentralized finance's murky regulatory waters and providing legal advice to DeFi projects, ensuring businesses can innovate while remaining compliant with evolving regulations in various legal areas, including AML compliance, securities regulations, and data privacy laws. These are all critical for DeFi companies operating in today's regulatory environment. Blockchain law firms can help companies understand their legal obligations and mitigate legal risks. By offering tailored advice on structuring decentralized platforms and issuing tokens, they help businesses avoid costly mistakes that could hinder their growth. A deep understanding of the DeFi space allows specialty law firms to anticipate regulatory developments, giving their clients a competitive edge in this fast-evolving industry. Practical Steps for DeFi Startups To overcome the legal challenges in DeFi, companies must take a proactive approach to compliance, including the following: Conducting regular legal audits: DeFi platforms should routinely review operations to ensure compliance with the latest regulations. That includes assessing AML protocols, reviewing token classifications, and ensuring consumer protection laws are followed.
Implementing Know Your Customer (KYC) measures: While decentralization is a key feature of DeFi, implementing KYC measures can help platforms comply with AML laws. These measures may include verifying users' identities and monitoring transactions for suspicious activity.
Seeking legal counsel early: Engaging with a blockchain law firm at the early stages of a project can help startups avoid potential legal pitfalls. Legal specialists can provide guidance on the best practices for operating a decentralized platform while minimizing the risk of regulatory non-compliance. In 2024, as regulators increasingly focus on DeFi, compliance will be critical for success. By staying informed, adopting best practices, and seeking expert legal advice, DeFi startups can navigate the complex legal landscape and thrive in this rapidly evolving sector. Decentralized Finance (DeFi) has disrupted the financial industry, providing new opportunities for investors, developers, and businesses. DeFi allows users to lend, borrow, trade, and invest without relying on centralized control by eliminating go-betweens such as banks and traditional financial institutions. However, with the innovation DeFi brings, it also introduces various legal challenges. In 2024, navigating these hurdles is more critical than ever as regulators increase their scrutiny of this rapidly growing sector. DeFi startups must stay ahead of evolving regulations to avoid potential legal issues. Major areas of concern include anti-money laundering (AML) compliance, securities laws, and the decentralized nature of these platforms, which makes enforcing regulations more complex. To succeed in the DeFi space, companies need to be aware of these challenges and adopt proactive measures to ensure they operate within the boundaries of the law. Anti-Money Laundering (AML) Compliance AML compliance is one of the most pressing legal challenges for DeFi startups. Traditional financial institutions are subject to strict AML regulations to forestall money laundering, terrorist financing, and other illicit activities. In contrast, DeFi platforms , which operate without centralized oversight, present unique challenges in monitoring and enforcing AML requirements. DeFi platforms DeFi platforms For regulators, DeFi represents a potential risk because transactions occur directly between users, often with a level of anonymity that could be exploited for illegal purposes. Global regulators are increasing pressure on DeFi platforms to implement AML measures. That includes adhering to the Financial Action Task Force's (FATF) " travel rule ," which requires the identification of both the sender and receiver of funds in digital asset transactions. travel rule travel rule For DeFi startups, complying with AML laws can be difficult, especially when the platform is designed to operate without user accounts or centralized control. However, failure to comply can result in severe penalties, including fines or even shutting down. Many companies are turning to blockchain law firms for guidance on implementing AML protocols while maintaining the decentralized nature of their platforms. blockchain law firms blockchain law firms Securities Laws and DeFi Tokens Another significant legal concern is the classification of DeFi tokens as securities. Regulatory bodies worldwide are struggling with how to classify digital assets. Suppose a DeFi token is classified as a security in the US . In that case, it becomes subject to securities laws, which include strict registration and disclosure requirements. DeFi token is classified as a security in the US DeFi token is classified as a security in the US The challenge for DeFi startups is that many tokens used on their platforms might be considered securities under existing frameworks, even if they are intended for utility purposes. Suppose regulators determine that a token qualifies as a security. In that case, it must comply with the same regulations that apply to traditional securities, including registering with the appropriate regulatory body. Failing to do so can result in fines, penalties, lawsuits, and damage to a startup's reputation. Regulators are expected to clarify the rules surrounding token classifications in 2024, but until then, startups are operating in a legal gray area. DeFi projects must be cautious when issuing tokens to ensure they are not unintentionally violating securities laws. Decentralization and Regulatory Uncertainty The decentralized nature of DeFi platforms presents a unique legal challenge. Traditional financial institutions operate within a clear regulatory framework, with designated authorities overseeing their activities. DeFi platforms, however, often function without a central authority, making it difficult for regulators to hold any specific party accountable when something goes wrong. The lack of a central entity means that there is no obvious party for regulators to pursue in the event of a hack, fraud, or other illegal activity. That raises questions about who bears responsibility for ensuring compliance with financial regulations on DeFi platforms. It also complicates the enforcement of consumer protection laws designed to safeguard users from fraudulent schemes or loss of funds. As regulators work to establish clearer guidelines for DeFi, startups must be prepared for a rapidly changing legal environment. Many DeFi companies seek legal expertise to help them navigate the complexities of operating in a decentralized ecosystem while staying compliant with local and international laws. The Role of Blockchain Law Firms For DeFi startups facing these legal challenges, seeking guidance from experts in blockchain law is essential. They specialize in navigating decentralized finance's murky regulatory waters and providing legal advice to DeFi projects, ensuring businesses can innovate while remaining compliant with evolving regulations in various legal areas, including AML compliance, securities regulations, and data privacy laws. These are all critical for DeFi companies operating in today's regulatory environment. Blockchain law firms can help companies understand their legal obligations and mitigate legal risks. By offering tailored advice on structuring decentralized platforms and issuing tokens, they help businesses avoid costly mistakes that could hinder their growth. A deep understanding of the DeFi space allows specialty law firms to anticipate regulatory developments, giving their clients a competitive edge in this fast-evolving industry. Practical Steps for DeFi Startups To overcome the legal challenges in DeFi, companies must take a proactive approach to compliance, including the following: Conducting regular legal audits: DeFi platforms should routinely review operations to ensure compliance with the latest regulations. That includes assessing AML protocols, reviewing token classifications, and ensuring consumer protection laws are followed. Implementing Know Your Customer (KYC) measures: While decentralization is a key feature of DeFi, implementing KYC measures can help platforms comply with AML laws. These measures may include verifying users' identities and monitoring transactions for suspicious activity. Seeking legal counsel early: Engaging with a blockchain law firm at the early stages of a project can help startups avoid potential legal pitfalls. Legal specialists can provide guidance on the best practices for operating a decentralized platform while minimizing the risk of regulatory non-compliance. Conducting regular legal audits: DeFi platforms should routinely review operations to ensure compliance with the latest regulations. That includes assessing AML protocols, reviewing token classifications, and ensuring consumer protection laws are followed. Implementing Know Your Customer (KYC) measures: While decentralization is a key feature of DeFi, implementing KYC measures can help platforms comply with AML laws. These measures may include verifying users' identities and monitoring transactions for suspicious activity. Know Your Customer Know Your Customer Seeking legal counsel early: Engaging with a blockchain law firm at the early stages of a project can help startups avoid potential legal pitfalls. Legal specialists can provide guidance on the best practices for operating a decentralized platform while minimizing the risk of regulatory non-compliance. In 2024, as regulators increasingly focus on DeFi, compliance will be critical for success. By staying informed, adopting best practices, and seeking expert legal advice, DeFi startups can navigate the complex legal landscape and thrive in this rapidly evolving sector.

The Legal Challenges of Decentralized Finance (DeFi) in 2024

SEC v. Terraform Court Filing, retrieved on February 16, 2023, is part of . You can jump to any part in this filing . This is part 28 of 38. HackerNoon’s Legal PDF Series here a. Terraform and Kwon Deceived Investors about Chai 121. Terraform and Kwon marketed the Terraform blockchain as having a real-world use. Specifically, Terraform and Kwon repeatedly claimed that a Korean company, Chai Corporation ("Chai"), used the Terraform blockchain to process and settle millions of transactions for Korean consumers at retail establishments, such as online stores, movie theaters, and convenience stores. These statements were materially false and misleading. Chai transactions were neither processed nor settled on the Terraform blockchain. 122. To further deceive investors, Terraform and Kwon recorded completed Chai transactions onto the Terraform blockchain to make it appear as if they were processed on the blockchain when, in fact, they were not. The purported "real-world use" of the Terraform blockchain was a literal fabrication. 123. Chai is a mobile payment service provider in Korea, similar to PayPal or Venmo, which Kwon launched, together with Terraform's co-founder, in or around June 2019. 124. Until early 2020, Chai and Terraform were closely associated with each other, sharing an office space and overlapping personnel. During that time, Kwon sat on Chai's board of directors and was kept up to date on Chai activities. 125. Sometime in early 2020, Kwon and Terraform's co-founder took steps to separate Terraform's business from Chai. Kwon took control of Terraform and moved its offices to a new location. At the same time, the majority of Terraform's employees began working solely for Terraform. However, until approximately May 2022, Kwon continued to sit on Chai's board and Defendants continued to represent publicly that Terraform was connected to Chai. 126. From mid-2019 through at least March 2022, Defendants made numerous and repeated statements falsely representing that the "backend" of Chai transactions were being processed and settled using the Terraform blockchain. Terraform and Kwon also falsely stated that Chai's use of the Terraform blockchain provided incentives to both Korean merchants and consumers to use Chai for their transactions. Specifically, Terraform and Kwon claimed that Chai's use of the Terraform blockchain meant that merchants experienced faster processing times and lower transaction fees through Chai than through competitor mobile payment services providers. Likewise, Terraform and Kwon maintained that Chai customers would benefit from additional consumer discounts flowing from the lower costs associated with Chai's purported use of the Terraform blockchain. With these misrepresentations, Terraform and Kwon misleadingly used Chai's growth as a proxy for the growth and success of the Terraform ecosystem as a whole. 127. Terraform and Kwon made these false and misleading statements in presentations to solicit investments in Terraform's crypto asset securities, including LUNA, from investors and prospective investors in the U.S. and overseas. In addition, Terraform made and disseminated these false and misleading statements in public interviews, Terraform-sponsored podcasts, and social media posts, which were available to U.S. investors and prospective investors. 128. For instance, in a presentation aired on CNBC Africa that Terraform made available to U.S. investors when it posted it to YouTube on October 14, 2019, Kwon discussed Chai in depth, explaining: [I]n the backend, it uses Terra's blockchain technology to solve some major pain points and problems for the merchants. But in the backend is where the real magic starts to happen. And I contend that Terra solves two of the biggest roadblocks to the adoption of digital payments in Asia and the rest of the world. So the first is slow settlement periods. … Terra settles in six seconds. So every block for every transaction that has been made, we batch it up and then send it to the merchant so they can have easy and early access to working capital should they choose to do so. The second problem that we solve is high transaction fees. … So in the thirteen weeks in which we have been operational, early response has been quite explosive. Up-up to today we have had 430,000 shoppers over the Chai gateway, and most of them coming in the last month. And we've processed nearly 2,000,000 transactions up to date. And we think that this number will continue to grow. In terms of daily active users, Terra and Chai has already surpassed some of the most popular tokens. Our daily active user numbers today currently stand at around 58,000 users... … So, basically what we are going for is to facilitate everyday retail transactions that are powered by Terra. 129. In an email sent on February 6, 2020 directly to investors, including U.S.-based institutional investors, Kwon noted that Similarly, on February 9, 2020, Kwon wrote in the Terra General Discord Channel chat accessible to the public that "Chai sits at 1.18 million active accounts today, and we passed the IM mark on Jan 14" "[r]ight now Chai has 12 merchants, all of whom get settled in KRT on the Terraform blockchain." 130. Terraform provided a September 2020 investor slide deck to at least one U.S.- based institutional investor, in which it touted the purported speed and efficiency of Chai in using the Terraform blockchain to process transactions. One slide titled contained a chart of various crypto assets and associated that $16 million with "LUNA, Terra's Native Token." "Explosive adoption of payment solutions has generated Terra 16M in annualized fees" Later slides in the deck also touted Chai's success in promoting the investment opportunities of other Terraform crypto asset securities. 131. In a series of Tweets posted on May 24, 2021 through @terra_money, Terraform again emphasized Chai's use of the Terraform blockchain and highlighted its growth, stating: 17/ As long as we create useful applications that people use on top of Terra, the strong locus of demand will always exist. 18/ And the use cases are already there. CHAI has more than 2 million active users in Korea. 132. And on March 31, 2022, in an interview posted to the public YouTube channel Blockworks Macro, Kwon again touted Chai and its use of the Terraform blockchain: So, we've launched apps like Chai in Korea. And so, the idea was that we were close to retail loop with things that people can buy, and transact with using, you know, Terra payments. So, you could take it to most e-commerce merchants of your choice. I could go to movie theaters, convenience stores, and things like that. 133. In addition to making and disseminating these materially false and misleading statements, Terraform and Kwon engaged in other deceptive acts, including by entering transactions on the Terraform blockchain using "KRT" (yet another algorithmic stablecoin offered by Terraform that was pegged to Korean currency, Won), which purported to reflect Chai commercial transactions. Specifically, from June 2019 through at least May 12, 2022, the Terraform blockchain appeared to reflect that Chai transactions were being settled on the blockchain in KRT, when, in fact, Chai payments were processed in Korean Won. 134. To carry out this deception, Terraform programmed a server, which was referred to internally as the "LP Server," to receive and process data about Chai transactions, and then issue instructions to the Terraform blockchain to replicate those transactions as if they had originally "settled" on the Terraform blockchain. 135. Analysis of Terraform blockchain data reflects that, in replicating the Chai transactions, Terraform used one wallet address ("Terraform Master Wallet") to fund up to 2.7 million other wallets. Terraform controlled each of these wallets and used them to execute batched or "multisend" transfers that would replicate multiple Chai transactions together in a single transaction, using data received by the LP Server. Analysis of Terraform blockchain data further reflects that Terraform used the Terraform Master Wallet to begin each batch of transactions that replicated the real transactions that Chai was processing in Korean Won. 136. In statements to investors, Kwon has confirmed that the batched blockchain transactions that utilized this Terraform Master Wallet were purportedly connected to Chai (though he did not disclose that they merely replicated Chai transactions, which were not actually settled on the blockchain). For instance, in a private Discord chat on June 22, 2019, Kwon told a small number of investors that Terraform blockchain transactions that are "multisend [are] pretty much all Chai." 137. To further his deception, Kwon "challenged" his Twitter followers to identify purported merchant wallet addresses from these replicated blockchain transactions. Specifically, in a February 8, 2020 tweet posted through @stablekwon, Kwon challenged his followers to identify Chai merchant wallet addresses from the blockchain, posting: Fun thought: currently @terra_money payments app Chai is linked with 12 merchants in Korea. Can anyone guess which wallet address belongs to which merchant? First person to respond with the correct guess and explain reasoning get 5000 SLUNA. 138. At least one of Kwon's Twitter followers purportedly accepted the challenge and searched the Terraform blockchain to match the follower's real-world Chai app payments with transactions recorded on the blockchain. As a result, the follower claimed to have discovered eleven of the twelve purported merchant wallet addresses. 139. On February 9, 2020, Kwon posted a follow-up tweet falsely stating that the follower had correctly identified the Chai merchant wallets. In fact, a blockchain analysis reveals that each identified transaction began with the Terraform Master Wallet and the purportedly identified merchant wallet addresses were controlled by Terraform. 140. These Terraform blockchain transactions purporting to represent real Chai transactions were purely sham transactions. An analysis of the blockchain indicates that virtually all the KRT used to fund the Terraform Master Wallet originated from other Terraform-controlled wallets, including a reserve of Terraform stablecoins, called Terraform SDR (SDT) Similarly, virtually all the KRT used to replicate these Chai transactions remained in or was returned to Terraform-controlled wallets through at least May 12, 2022. The analysis further reflects that, from June 2019 until at least May 2022, with very few exceptions, the wallet addresses used in Terraform Master Wallet transactions were used in no other transactions oth than those initiated from the Terraform Master Wallet. In other words, these blockchain transactions do not reflect real-world, arms-length transfers of KRT between consumers and merchants. Instead, they reflect a closed system in which Terraform transferred KRT between millions of wallets that it controlled in order to replicate millions of transactions processed through Chai to make it appear that they had been processed and settled on the Terraform blockchain. 141. In reality, Chai did not process or settle transactions on the Terraform blockcha but instead used traditional payment methods of receiving Korean Won from its customers and paying Korean Won to participating merchants. Neither Chai consumers nor Chai merchants were transacting in KRT. The transactions that were executed by the LP Server on the Terraform blockchain merely recorded transactions that had already happened in the real work using Korean Won. 142. Breaks in the continuity of new blocks created on the Terraform blockchain confirm that no Chai transactions occurred on the blockchain. The Terraform blockchain typically creates new blocks reflecting new states of the blockchain (including transactions) every six or so seconds. However, in at least five instances between October 2021 and March 2022, there were one or more days when no transactions whatsoever were confirmed on the Terraform blockchain. Yet, there is no evidence that the Chai payment application was not functioning during those periods. 143. Chai itself has denied in emails to its own investors that it used a blockchain to process its payments and claimed that doing so would not have been legally permitted in Korea. 144. Terraform employees that knew of the deception also knew to maintain its secrecy. For example, one Terraform employee explained in a chat with another employee on October 9, 2021,"btw we don't want to say stuff about LP server too much... it breaks the perception that chai depends on Terra... Basically chai doesn't need Terra to work... It's what copies chai's transactions from their data base to create tx activity." 145. As a founder and former director of Chai, Kwon (and through Kwon, Terraform) knew or were reckless in not knowing that Chai did not actually process or settle transactions on the Terraform blockchain. Kwon personally wrote much of the Terraform blockchain code from its genesis through two version upgrades and was primarily responsible for Terraform's coding and engineering strategy decisions. At the time of Chai's development and launch, Kwon held the most senior technical position at Terraform. 146. Kwon knew or was reckless in not knowing that the LP Server was merely replicating Chai transaction data that had not actually occurred on the Terraform blockchain because Kwon directly supervised and instructed the Terraform employees who programmed the LP Server in the first instance. Kwon also participated in technical discussions that required an understanding of how Chai transactions were reflected on the Terraform blockchain, including that they were batched in "multisend" transactions, and demonstrated knowledge of the location of Chai-related files in Terraform's code repositories. Kwon further demonstrated his understanding of the Chai transaction replication process by publicly confirming Terraform blockchain wallet addresses that purportedly belonged to Chai merchants. 147. Defendants' misleading statements and omissions, and their deceptive acts, with respect to the non-existent Chai transactions, were material to investors in Terraform's crypto assets securities. 148. Terraform and Kwon used these material misrepresentations about Chai to encourage and solicit investments by retail and institutional investors in Terraform crypto assets, including LUNA and wLUNA. For example, in a June 19, 2020 blog post on Terraform's Medium website, Terraform's Head of Ecosystem Development directly tied Chai's purported use of the Terraform blockchain to the returns to Terraform investors, writing: In this piece we'd like to go beyond the numbers to reflect on the key role that transaction fees play in determining network value and security. The fundamental driver of transaction fees in the Terra network is the broad adoption of CHAI by consumers and merchants. 149. Defendants' efforts worked. U.S.-based retail and institutional investors believed that Chai operated on the Terraform blockchain and found it significant in deciding to invest in Terraform crypto assets, including LUNA. For example, on December 3, 2020, the CEO of a U.S. based institutional investor posted to Twitter: "Terra's payment app Chai is up to 80k daily active users. Koreans are fast adopters. Watch this grow. $LUNA." On May 18, 2022, that same CEO posted a memo to Twitter purporting to explain the basis for investing in LUNA. In the memo, the CEO highlighted as one significant factor, Chai's use of the Terra blockchain, describing it as "crypto finding a real-world use case." 150. Similarly, in or around November 2021, Kwon and another Terraform employee approached another U.S.-based institutional investor to solicit that investor to purchase LUNA tokens. In pitching the LUNA investment, Terraform and Kwon told the investor that the Terraform blockchain was being used to process Chai transactions. The investor found this fact to be significant in deciding to invest with Terraform. This investor specifically highlighted Chai's purported transactions on the Terraform blockchain in the investor's internal investment memorandum in early January 2022. On or about January 24, 2022, that investor (through a foreign subsidiary) signed an agreement to purchase $57 million in LUNA tokens. 151. From December 27, 2019, to March 10, 2022, U.S.-based institutional investors (either directly or through offshore affiliates) purchased approximately $656 million of LUNA tokens from Terraform (or a wholly-controlled subsidiary). These institutional investors included hedge funds and venture capitalists based in California, New York, Massachusetts, Florida, and Washington D.C. Similarly, from September 2021 through May 2022, retail investors, including investors in the U.S., purchased billions of dollars of LUNA and wLUNA on crypto asset trading platforms. Continue Reading . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case 1:23-cv-01346 retrieved on September 12, 2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. sec.gov

Do Kwon Lied to Investors About Chai: How He Dangled the Carrot In Front of Their Faces

SEC v. Terraform Court Filing, retrieved on February 16, 2023, is part of . You can jump to any part in this filing . This is part 9 of 38. HackerNoon’s Legal PDF Series here II. Terraform's Crypto Assets Were Offered and Sold As Securities. 39. As alleged in greater detail below, Terraform offered and sold five groups of crypto asset securities: LUNA tokens, a version of LUNA called "wrapped" LUNA, UST, MIR tokens, and security-based swaps or mAssets. Defendants solicited investors for these crypto assets by touting their profit potential. Defendants repeatedly stated that the crypto assets would increase in value based on Terraform's development, maintenance, and promotion of its blockchain, protocols, and the entire Terraform ecosystem. Defendants also promoted to investors the ability to trade Terraform's crypto assets on the secondary market, with the success of the investment again depending on Defendants' efforts. 40. Defendants further touted the professional expertise and success of the Terraform team, including Kwon, claiming that Terraform was "led by serial entrepreneurs" and was a team with "deep relevant expertise," and providing biographies or links to LinkedIn profiles that highlighted Terraform employees' and Kwon's expertise in crypto assets, finance, and technical experience with software coding, engineering, and development. 41. In addition, Defendants advertised their considerable efforts to ensure that UST- the "lynchpin of the [Terraform] ecosystem" - maintained its $1.00 peg. In January 2022, Defendants announced the creation of the "Luna Foundation Guard," which had no employees and was controlled by Kwon, with the purpose of serving as an "asset reserve [] to back the UST." The Luna Foundation Guard was funded with a "gift" of 50 million LUNA (at the time, worth billions of dollars) directly from Terraform. 42. Defendants also aggressively marketed Terraform's crypto asset securities to U.S. investors, by posting information and promotional materials to accounts on several publicly accessible online social media platforms, such as Twitter accounts, blog posts, YouTube, and messaging applications like Telegram. Kwon and other Terraform employees further gave interviews or quotes to media promoting its crypto assets, including U.S.-based outlets, as described in greater detail below. 43. Additionally, during the Relevant Period, Kwon and other Terraform employees traveled to the United States to meet personally with existing and potential investors to solicit investment in Terraform's crypto asset securities, including meetings in San Francisco and New York, and to attend and speak at an industry conference and events in New York. Defendants' U.S.-based promotional efforts also included a partnership with the Washington Nationals baseball team, as a result of which the word "Terra" was placed on every seat behind home plate and elsewhere around the stadium in Washington, D.C. Defendants also arranged to have several of their crypto assets listed (made available for trading) on several major crypto asset trading platforms, including a prominent U.S.-based trading platform. Continue Reading . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case 1:23-cv-01346 retrieved on September 12, 2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. sec.gov

Terraform Offered and Sold Its Crypto Assets as Securities

SEC v. Terraform Court Filing, retrieved on February 16, 2023, is part of . You can jump to any part in this filing . This is part 6 of 38. HackerNoon’s Legal PDF Series here STATUTORY AND LEGAL FRAMEWORK 21. Congress enacted the Securities Act to regulate the offer and sale of securities. In contrast to ordinary commercial principles of caveat emptor, Congress enacted a regime of full and fair disclosure, requiring those who offer and sell securities to the investing public to provide sufficient, accurate information to allow investors to make informed decisions before they invest. 22. Sections 5(a) and 5(c) of the Securities Act require that an issuer of securities like Terraform register offers and sales of those securities with the SEC when they offer and sell securities to the public. Registration statements relating to an offering of securities thus provide public investors with material information about the issuer and the offering, including financial and managerial information, how the issuer will use offering proceeds, and the risks and trends that affect the enterprise and an investment in its securities. 23. The definition of a "security" under the federal securities laws includes a wide range of investment vehicles, including "investment contracts. See 15 U.S.C. § 77b(a)(1) (Securities Act Section 2(a)(1)). Investment contracts are instruments through which a person invests money in a common enterprise and reasonably expects profits or returns derived from the entrepreneurial or managerial efforts of others. Courts have found that novel or unique investment vehicles constitute investment contracts, including interests in orange groves, animal breeding programs, railroads, mobile phones, crypt assets, and enterprises that exist only on the Internet. As the United States Supreme Court noted in SEC v. W.J. Howey Co., Congress defined "security" broadly to embody a "flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits." 328 U.S. 293, 299 (1946). 24. Security based swaps, which are themselves securities, include any agreement, contract, or transaction that is a swap as defined in Section la of the Commodity Exchange Act (CEA) and is based on a single security, including on the value thereof. See 15 U.S.C. § 78c(a)(68) (Exchange Act Section 3(a)(68)). Section 1a(47) of the CEA defines "swap" to include "any agreement, contract, or transaction" that "provides on an executory basis for the exchange... of 1 or more payments based on the value or level of 1 or more... securities... and that transfers, as between the parties to the transaction, in whole or in part, the financial risk associated with a future change in any such value or level without also conveying a current or future direct or indirect ownership interest in [the] asset...." 25. Securities Act Section 5(e) makes it unlawful for any person to offer to sell, offer to buy, or purchase or sell a security-based swap to any person who is not an "eligible contract participant" without an effective registration statement. 15 U.S.C. § 77e(e). Exchange Act Section 6(1) also makes it unlawful for any person to effect transactions in security-based swaps to any person who is not an "eligible contract participant" unless the transaction is effected on a registered national securities exchange. "Eligible contract participants" are defined to include high-net-worth individuals with "amounts invested on a discretionary basis" of $10 million (or $5 million if the individual enters into a hedging agreement) and certain types of sophisticated and/or regulated entities. 7 U.S.C. § 1a(18). Continue Reading . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case 1:23-cv-01346 retrieved on September 12, 2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. sec.gov

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