Do Kwon gets 4 months in prison in Montenegro on fake passport charges

Terraform Labs founder Do Kwon has been found guilty of using a false passport by a court in Montenegro and has been sentenced to four months in prison.

Do Kwon’s colleague and former Terraform Labs Chief Financial Officer Han Chong-joon, was charged alongside him and received the same sentence. The time both men spent in detention will be taken into account, the Montenegro Basic Court said in a statement on its website.

Do Kwon was charged with attempting to leave the country using a false Costa Rican passport. He reportedly told a Montenegro court that he wasn’t aware the passport he was traveling with was allegedly forged and instead pinned the blame on a Chinese-named agency.

Related: Do Kwon denies forging passport, blames ‘Chinese’ agency: Report

According to a June 17 report from South Korean news outlet Segye Ilbo, Kwon told the Montenegrin Basic Court he received his allegedly forged passports and travel documentation, including a Costa Rican passport, through third-party “agencies.”

According to Kwon, because he’d been traveling with his Costa Rican passport “for years,” he had no reason to doubt its authenticity.

In addition to denying forgery of travel documentation, Kwon denied allegations he made any financial donations to Montenegro’s former finance minister Milojko Spajić, the now-leader of the Europe Now party.

Hong Kong says Cyberport attracted 150 Web3 firms in a year

In the past year, more than 150 Web3 firms have set up operations in Hong Kong’s Cyberport, a digital hub set up by the country’s government to promote innovation, Financial Secretary Paul Chan Mo-po said in a statement.

The influx came after the Hong Kong government invested $7 million (50 million yuan) to help Cyberport speed up the development of Web3 with blockchain as the supporting technology, Chan Mo-po said.

Chan Mo-po detailed the Hong Kong government’s investments in the sector, and said that Cyberport has been allocated around $64 million (HK$500) in funding for the “Digital Transformation Support Pilot Programme,” an initiative aimed at helping small and medium-sized businesses to implement digital solutions.

Cyberport, which is managed by the wholly-owned government subsidiary of the Hong Kong SAR administration, hosts a total of 1,900 enterprises, the statement said.

Related: Hong Kong’s regulatory lead sets it up to be major crypto hub

Hong Kong introduced its own crypto legislation allowing retail investors to invest directly in crypto assets last year and presented itself as keenly pro-crypto.

Since then, the country has continued to support the industry. In January, as the crypto industry was reeling from the FTX crisis, the Financial Secretary said that local government and regulators are looking forward to building a crypto and fintech ecosystem in 2023.

On Jan. 13, Korean tech giant Samsung announced the launch of a Bitcoin Futures Active ETF, or exchange-traded fund, on the Stock Exchange of Hong Kong.

In mid-February, sources claimed that some Chinese officials were reportedly giving tacit approval to Hong Kong’s pro-crypto efforts. Local business operators stated that the Chinese government might even be open to using Hong Kong as a test bed for crypto as long as it doesn’t threaten the country’s financial stability.

By March, more than 80 crypto firms had expressed interest in opening an office in Hong Kong.

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Prime Trust subsidiary Banq files for bankruptcy amid BitGo acquisition deal

The payments subsidiary of crypto custodian Prime Trust, Banq, filed for bankruptcy protection in the United States on June 13, court documents show..

The move comes just days after wallet infrastructure provider and digital asset custodian BitGo signed a non-binding letter of intent to acquire Prime Trust, which was announced on June 8.

Banq’s bankruptcy filing listed $17.72 million and liabilities of $5.4 million and cited the “unauthorized transfer” of $17.5 million in assets to Fortress NFT Group as well as the illicit transmission of trade secrets and proprietary information to Fortress.

Excerpt from Banq’s bankruptcy filing detailing summary of assets and liabilities.  

Fortress NFT Group was set up by Banq’s former CEO, CTO and CPO, reports say, and Banq is currently in arbitration with Fortress NFT Group over these allegations.

The timing of the filing, just after the BitGo acquisition deal of Banq’s parent Prime Trust was announced, raises questions about how it might affect the agreement.

While the terms of the deal were not disclosed, if it goes through, BitGo will acquire Prime Trust’s payment rails and cryptocurrency IRA fund and increase its wealth management offerings.

Prime Trust’s Nevada Trust Company will also join BitGo’s network of regulated trust companies in South Dakota, New York, Germany, and Switzerland. Prime Trust’s API infrastructure and exchange network will “map over 1:1” with BitGo services. BitGo stated:

“This acquisition makes BitGo the first global digital asset company to provide a full suite of solutions for institutions and fintech platforms.”

The crypto custody market is evolving rapidly, with recent deals including Ripples acquisition of Swiss digital asset custody provider Metaco in May for $250 million.

The BitGo/Prime Trust deal, if it goes ahead, comes just as the United States Securities and Exchange Commission has proposed rule changes that would make it harder for crypto companies to act as custodians of their customers’ funds.

Related: Prometheum subsidiary receives FINRA approval for digital asset qualified custody

Prime Trust has been under pressure for a while, having reportedly laid off a third of its staff in January. Later, it stepped in to hold Binance.US customer funds through a network of partner banks after the banking crisis in March.

It was the center of a scandal in the U.S. state of Oregon last year when it was identified as the source of a $500,000 contribution to the state Democratic Party that later turned out to have come from FTX executive Nishad Singh.

BitGo itself was close to being acquired by Galaxy Digital for $1.2 billion last year and sued Galaxy for acquisition breach after the deal was canceled.

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Hinman docs unsealed: SEC concerned over ‘Ether is not a security’ statement

Newly released documents showing edits that were made to a 2018 speech given by former director of the Security and Exchange Commission’s (SEC) corporate finance division Bill Hinman suggest the editors were concerned his statement might undermine the idea that Ether (ETH) is a security. 

This could risk locking the agency into a position it would find hard to change at a later date, the SEC comments warn.

“Even with the caveats in the sentence, it seems that it would be difficult for the agency to take a different position on Ether in the future,” the edits to the documents read. “Further, the rest of the paragraph strongly implies that the thinking applies to Ether.”

The Hinman documents refer to internal SEC messages concerning a 2018 speech given by Hinman in which he said that while cryptocurrencies such as Bitcoin (BTC) and Ether may start off as securities, it’s possible for them to become something more akin to a commodity once they become sufficiently decentralized.

Ripple CEO Brad Garlinghouse said June 12 that the documents would prove to be “well worth the wait.”

Related: Ripple case: Pro-XRP lawyer tips outright SEC victory at ‘less than 3%’

The unsealing of the documents comes amid an extremely turbulent time for the crypto industry. June 13 also sees the federal court hear the SEC’s motion to freeze the assets of Binance.US, following on from a spate of legal action against the exchange.

The SEC first took legal action against Ripple in December 2020, alleging that the sale of its native XRP (XRP) token represented an unregistered securities offering. Since then, Ripple has denied XRP is a security, arguing it does not satisfy the Howey test.

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EU starts countdown to crypto legislation, adds MiCA to official journal

Publication of the European Union’s crypto law MiCA in its official journal signals the start of the official process of bringing licencing, stablecoin and anti-money laundering regulations into effect by the end of 2024.

The European Union’s Markets in Crypto Assets (MiCA) legislation was published June 9 in the Official Journal of the European Union (OJEU). This move triggers the countdown for the law to come into effect from December 30, 2024.

The Bill was signed into law on May 31, after having first been introduced in 2020, with the aim of creating a consistent regulatory framework for crypto assets among European Union member states.

While the rules officially come into force within 20 days, the rules will begin to apply on December 30, 2024, with some parts of the legislation coming effect six months earlier, on June 30, 2024.

The legislation has been hailed by cryptocurrency service providers and proponents alike, for creating a single market environment across Europe in terms of regulatory requirements and operating procedures.

Key components of MiCA legislation include registration and authorization requirements for issuers of cryptocurrencies, exchanges and wallet providers.

Related: EU to use blockchain for educational and professional credential verification

As per the rules, stablecoin issuers must meet certain security and risk mitigation requirements, while cryptocurrency custody services must ensure sufficient security and safety measures to address potential cybersecurity and operational failures.

The legislation also provides a framework to prevent market abuse, insider trading and manipulative behavior in the cryptocurrency space.

In the meantime, crypto markets and operators in the United States are coming under pressure after the Securities and Exchange Commission initiated regulatory action against exchanges Binance and Coinbase

Both exchanges are being sued on multiple counts, including failure to register as licensed brokers and offering unregistered securities.

CT Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

World Mobile eyes African rollout after decentralized wireless field tests

Decentralized wireless (DeWi) network operator World Mobile said on June 8 it has completed field tests of its DeWi technology in Kenya, Mozambique, and Nigeria, bringing it closer to a full rollout across the African continent, the company said in the announcement.

World Mobile, which aims to offer affordable and reliable internet access to rural areas that are traditionally under-served, said the tests in Kenya and Mozambique were carried out using TV White Space equipment, employing unused spectrum in the TV broadcast band to provide mobile network services.

In Nigeria, the field test utilized SpaceX’s satellite internet system Starlink. According to the company, both TV White Space and Starlink are complementary technologies that enable World Mobile to employ existing infrastructure and spectrum resources to expand its network coverage.

World Mobile CEO Micky Watkins said the tests “validate the feasibility and scalability of our DeWi technology, bringing us one step closer to providing affordable and reliable internet access to both rural and under-served areas worldwide.”

Related: Polygon Labs president testifies on democratizing the internet with Web3, blockchains

This announcement follows World Mobile’s launch of its commercial network in Zanzibar in May, where it says over 300 AirNodes provide wireless connectivity to more than 16,000 users a day.

The company plans to extend its network to more countries in Africa and beyond and seeks to create “ a global community-owned wireless network that can bridge the digital divide and foster social and economic inclusion,” it said.

World Mobile says its DeWi solution provides connectivity at a lower cost than traditional mobile network operators and could help create ‘“a sharing economy” to finance the expansion of telecommunications infrastructure in rural Africa and beyond.

Unlike traditional mobile networks, World Mobile is built on blockchain and seeks to encourage people to participate in what it calls “a sharing economy” by giving people access to the trillion-dollar global telecom market.

HyperPlay raises $12M in Series A funding round

On June 8, HyperPlay — a Web3-native game launcher — said it closed its Series A funding round after raising $12 million from investors, including co-leaders Griffin Gaming Partners and Bitkraft Ventures. 

Other investors include MetaMask’s parent company ConsenSys, Ethereal Ventures, Delphi, Game7, Mirana Ventures and Monoceros Ventures.

HyperPlay, which was established in November 2022 by MetaMask and Game7 DAO, says its platform tackles the Web3 gaming interoperability challenge “head-on,” providing interoperability for Web3 gaming, and allowing developers to work without being bound by centralized entities like Apple, Google and Steam.

The platform says it aims to enable interoperability across all Web3 games through a wallet overlay on top of games that allows players to carry their MetaMask wallet inside native or browser-based games. HyperPlay’s game store currently offers over 33 Web3 titles, the company said.

“Since announcing HyperPlay in November of last year, we’ve been focused on building a platform that empowers both developers and users to effortlessly navigate the Web3 gaming realm,” said JacobC.eth, founder of HyperPlay.

The platform touts itself as serving both developers and users alike, and says its “developer loyal” focus means it “charges no taxes on in-game economies, instead monetizing optional features like on-ramping or token swaps.”

For users, HyperPlay says it supports all Ethereum Virtual Machine-compatible chains, enabling players to bring their wallets, tokens and nonfungible tokens (NFTs) into every native or browser game. HyperPlay’s launcher integrates an in-game wallet overlay, so users don’t need to leave the game and use a separate website for NFT transactions, the company said.

Web3 gaming, or blockchain gaming, uses distributed ledger technology to offer greater transparency, security, democratization and user control over in-game assets.

Unique active blockchain wallets per activity. Source: DappRadar

According to a report from DappRadar, Web3 gaming accounted for almost half of all blockchain transactions in 2022. This positions gaming as the fastest-growing sector in the blockchain space, well ahead of decentralized finance (DeFi) and NFTs.

That momentum has continued into 2023, with the sector experiencing consistent growth in the first quarter of 2023, according to another DappRadar report. Blockchain games and metaverse projects received $739 million of funding in the period.