New Terra Insights, Binance FUD Grows, CBDC and NFTs Take Center Stage

This week, government agencies grabbed headlines for their involvement in the crypto scene, especially in the situation of Terraforms Labs and central bank digital currency (CBDC) developments. Despite the growing concerns and uncertainties surrounding Binance, the exchange remained dedicated to its growth strategy. Meanwhile, the non-fungible token (NFT) scene took center stage this week, underscoring its growing prominence among investors.

South Korea Shares New Insights About Terraform Labs

Government agencies have also remained significantly engaged with cryptocurrencies, despite a paucity of regulatory initiatives. An example of this could be seen in South Korea. Authorities continued their lengthy investigation into the Terra implosion and the role played by its founder, Do Kwon.

According to reports on April 3, Korean authorities seized approximately 210 billion Korean won (equivalent to $151 million) belonging to individuals affiliated with Terraform Labs. The seized assets consisted of property, real estate, and other assets. They were collected by the authorities as part of the compensation in the Terra case.

Four days later, the South Korean authorities revealed that the collective value of cumulative profits from the defunct Terra ecosystem reached 414.5 billion won (approximately $315 million), with Do Kwon’s stake amounting to 91, 4 billion won. Authorities further revealed that none of the 91.4 trillion won associated with Kwon was currently within South Korean jurisdiction.

Furthermore, a significant portion of the estimated profit generated by the company, up to 154 billion won, is attributable to Daniel Shin, co-founder of Terra. Attempts by the South Korean authorities to issue an arrest warrant for Shin have proved futile. Let us remember that, just last week, South Korea had requested the extradition of Do Kwon to the country after his arrest in Montenegro.

CBDC Developments Trigger Reactions

This week also witnessed a proliferation of updates on the development of various central bank digital currencies (CBDCs). India burst onto the scene with an ambitious goal. India revealed that it is aiming to reach a user base of 1 million people for its digital rupee initiative. It is currently in the pilot phase in which more than 13 banks and 15 cities participate.

Meanwhile, the crypto community received insight into the potential direction of the digital euro project following comments made by Christine Lagarde, President of the European Central Bank (ECB), during a prank call. Lagarde revealed during the call that the ECB intends to control payments associated with central bank digital currencies. This statement sparked a backlash from cryptocurrency advocates.

In a separate development, Ron DeSantis, the Governor of Florida, has disassociated himself from the CBDC concept, particularly in the United States, and vehemently opposed its implementation. In keeping with the sentiments of the broader crypto community, DeSantis affirmed his support for financial freedom, arguing that CBDCs cannot provide it. Most notably, last month he pledged to ban the use of CBDC in the state of Florida.

The US regulatory landscape

Regulatory developments in the United States were comparatively sparse this week. Still, government agencies maintained their policies on the digital asset sector. Most notably, Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), addressed issues related to cryptocurrency regulations and consumer protection during a fiscal year 2024 budget hearing.

During the budget hearing, Gensler emphasized that laws are already in place to regulate the cryptocurrency industry and promote consumer protection. He claimed that despite these regulations, many cryptocurrency companies have not complied with them, leading to a recent batch of enforcement actions. These comments challenge the widespread notion among cryptocurrency advocates that the United States lacks clear regulations for the digital asset sector.

Additionally, the US Treasury Department issued a warning this week, highlighting how digital assets pose a national security risk. The Treasury stated that the increasing adoption and use of cryptocurrencies could threaten financial stability and undermine existing regulatory frameworks.

The statement underscores the government’s growing concern about the potential misuse of digital assets by bad actors, particularly in relation to money laundering and terrorist financing activities.

Meanwhile, Coinbase maintained its support for initiatives to roll back the perceived excess by US regulators. On Wednesday, Paul Grewal, Coinbase’s chief legal officer, announced that the exchange is backing a group of plaintiffs in their legal efforts to overturn the ban on cryptocurrency mixer Tornado Cash, arguing that the ban is illegal.

This move aligns with Coinbase’s commitment to advocate for a regulatory environment that promotes innovation and protects the rights of consumers and businesses in the crypto industry. Previously, the exchange defended efforts to challenge SEC crackdowns on crypto gambling.

Asian regulators seek to strengthen regulatory oversight

Asian financial regulators are prioritizing efforts to ensure investors in the cryptocurrency space are well protected. A move from Japan this week suggested that the country is looking to strengthen regulations governing cryptocurrency exchanges within its jurisdiction.

The Japan Financial Services Agency (FSA) has warned four exchanges that operate within the country without proper licence. The notice was delivered to Bybit, BitGet, MEXC Global, and BitForex. Bybit had reportedly received similar warnings, including one from Japan’s FSA in May 2021.

The Singaporean authorities also made headlines this week as the country sought to provide assistance aimed at mitigating the risks of financial implosions. The Monetary Authority of Singapore (MAS) revealed plans to provide guidelines for financial institutions to screen potential cryptocurrency customers to reduce the risk of financial instability. This move is part of Singapore’s efforts to ensure proper regulation and protection for investors in the crypto industry.

Dubai has also stepped up its efforts to tighten oversight of cryptocurrency-focused companies looking to establish a presence in the city. According to reports on April 5, the Dubai World Trade Center (DWTC) Authority is requesting more details from cryptocurrency entities applying for operating licenses in the emirate, including Binance.

Binance Pursues Growth Amid FUD

Meanwhile, the concerns and uncertainties surrounding Binance gained some steam this week due to a mix of speculation and confirmed developments. This campaign of Fear, Uncertainty, and Doubt (FUD) was recently triggered by charges brought against Binance by the US CFTC last week.

On Tuesday, Changpeng “CZ” Zhao, CEO of Binance, addressed rumors that he had been placed on Interpol’s red notice list in response to CFTC charges against Binance. In a tweet, Zhao denied these accusations, noting that the alleged “test” was fabricated. Furthermore, he urged the crypto community to continue to ignore unfounded speculation.

On April 6, the Australian Securities and Investments Commission (ASIC) announced the revocation of the Binance Australia Derivatives platform. This move further aggravated the existing FUD. However, Zhao clarified in a tweet that the revocation came in response to a request made by Binance, and the company’s Australian division continues to operate a spot exchange without issue.