Forkast

NHN Corporation, a South Korean entertainment conglomerate with over US$2.4 billion in total assets, announced Friday that it has partnered with U.S.-based Mysten Labs, the developers of the Sui blockchain, to launch an on-chain game scheduled for 2024. The partnership arrives despite a ban in South Korea against all blockchain-related games.

See related article: It’s time for Web3 gaming to up its own game

Fast facts

“What excites me about building with NHN is what we’re beginning to refer to as ‘stickiness’ for users,” Evan Cheng, CEO and co-founder of Mysten Labs said in an emailed press release. “It’s a code Web3, as a whole, has not managed to crack, with daily active users on the most popular chains barely topping 300,000. At Mysten Labs, our mission is to bring the benefits of Web3 to the masses, by the billions.”

NHN Corporation, which started as a game company in 1999, says it has over 37 million registered users on its mobile game titles such as Friends Pop and social casino game Hangame Poker.

Sui is a layer-1 blockchain network built by Mysten Labs, a Palo Alto-based company founded by engineers who previously worked on Meta’s Diem stablecoin project. Mysten Labs said in Friday’s press release the Sui blockchain is well suited to supporting games given its low fees, fast transactions and high degree of scalability. 

South Korea has the fourth largest gaming market in the world. It totaled nearly 21 trillion Korean won (US$15.72 billion) in annual revenue in 2021, according to a report from the Korea Creative Content Agency from January.

Games that involve cryptocurrencies or NFTs in South Korea are banned. The law is enforced by the Game Rating and Administration Committee and prohibits firms from promoting speculative behaviors to players via cashable rewards. All video games must acquire an age rating from the game rating committee for South Korean release. 

South Korean president Yoon Suk-yeol promised to abolish the play-to-earn (P2E) ban in his election campaign last year. But he is yet to follow through on the promise. South Korean P2E game makers have released blockchain-based games abroad, hoping that the local ban will be lifted. 

Mysten Labs and NHN did not respond to Forkast’s email request for additional comments sent Monday morning in Asia.

See related article: Sega says still exploring Web3 game initiatives despite reports of withdrawal

أعلنت شركة NHN Corporation، وهي شركة ترفيهية كورية جنوبية تزيد قيمتها الإجمالية عن 2.4 مليار دولار أمريكي، يوم الجمعة أنها دخلت في شراكة مع شركة Mysten Labs ومقرها الولايات المتحدة، مطوري سلسلة الكتل Sui، لإطلاق لعبة على السلسلة من المقرر إطلاقها في عام 2024. تأتي هذه الشراكة على الرغم من الحظر في كوريا الجنوبية على جميع الألعاب المتعلقة بسلسلة الكتل.

انظر المقال ذي الصلة: لقد حان الوقت لألعاب Web3 لتطوير أدائها

حقائق سريعة

وفي بيان صحفي أرسله عبر البريد الإلكتروني، قال إيفان تشنغ، الرئيس التنفيذي والمؤسس المشارك لشركة Mysten Labs: "ما يثير حماسي بشأن البناء مع NHN هو ما بدأنا نشير إليه بـ "الالتصاق" للمستخدمين". "إنه رمز لم تتمكن Web3، ككل، من اختراقه، حيث يتجاوز عدد المستخدمين النشطين يوميًا على أكثر السلاسل شهرة 300 ألف. في Mysten Labs، تتمثل مهمتنا في جلب فوائد Web3 إلى الجماهير، بالمليارات".

ذكرت وكالة الأنباء المحلية Newsis أن أكبر شركة إنترنت في كوريا الجنوبية Kakao ومطور الألعاب الرائد Com2uS يعملان على تقليص حجم فرق Metaverse الخاصة بهما حيث سجلت منصات العالم الافتراضي خسائر كبيرة في النصف الأول من عام 2023.

انظر المقالة ذات الصلة: يمتلك الكوريون الجنوبيون ما يقرب من 100 مليار دولار أمريكي من العملات المشفرة في الخارج

حقائق سريعة

قامت شركة Com2uS، إحدى الشركات الرائدة في تطوير ألعاب الهاتف المحمول والتي سجلت إيرادات بقيمة 536 مليون دولار أمريكي العام الماضي، بتقليص عدد موظفيها مؤخرًا في قسم metaverse الخاص بها، وفقًا لـ Newsis. ولم يتم الكشف عن التفاصيل المتعلقة بتقليص عدد الموظفين.

South Korean investors and corporations hold over 131 trillion Korean won (US$97.9 billion) worth of cryptocurrencies in overseas accounts, South Korea’s National Tax Service announced Wednesday. The figure is 70% of the total reported financial assets held by South Koreans overseas.

See related article: Korea Blockchain Week: diverging crypto paths for the US and Asia

Fast facts

In an annual assessment of monthly tax filings carried out from January to June this year, South Korea’s National Tax Service found 1,432 retail investors and corporations hold the near US$100 billion of overseas crypto assets.

South Korean residents and corporations with over 500 million won (US$372,939) worth of overseas assets are required to report those assets to tax authorities. 2023 marks the first year South Korea’s tax authorities included crypto in its annual assessment.

5,419 retail investors and corporations reported a total of 186.4 trillion won (US$139 billion) in overseas financial assets of all kinds. That figure is a 191.3% increase on last year.

“This year saw a record number of filers and amounts because foreign virtual asset accounts were included for the first time,” the National Tax Service wrote in a press release. 

The press release said that authorities will use cross-border transactions data to identify anyone who avoids reporting their overseas asset holdings. It will also strictly enforce penalties including criminal charges for those found guilty of doing so, it said.

In 2021, South Korea effectively banned foreign cryptocurrency exchanges from operating in the country. However, South Korean residents may still trade cryptocurrencies via overseas exchanges.

See related article: South Korea’s Hana bank partners with BitGo on digital asset services

The U.S. Securities and Exchange Commission will expand its regulatory enforcement beyond Coinbase and Binance.US onto other cryptocurrency exchanges, intermediaries and decentralized finance (DeFi) entities, the agency’s head of crypto assets and cyber unit David Hirsch said Tuesday at a forum in Chicago.

See related article: U.S. SEC denied immediate access to Binance.US software

Fast facts

The SEC is currently investigating other companies that have allegedly conducted similar breaches as Coinbase and Binance.US, Hirsch said at the Securities Enforcement Forum Central in Chicago.

“We’re going to continue to bring those charges,” said Hirsch, adding that intermediaries such as brokers, dealers and clearing agencies that are not fulfilling their obligations will not escape the regulator’s reach.

The SEC sued Coinbase and Binance.US in June, based on accusations that the two major crypto platforms were offering unregistered securities, which deprived investors of protection against conflicts of interest and other risks. 

The agency’s longstanding legal battle with Ripple Labs is also centered around the SEC’s claim that sales of XRP constituted the unregistered offering of investment contracts.

Hirsch further added that adding a “DeFi” label to an operation will not help circumvent the SEC’s enforcement. 

In the agency’s enforcement action against the Stoner Cats non-fungible token (NFT) project, SEC enforcement director Gurbir Grewal said the “economic reality of the offering” determines an offering as a financial security, not its labels.

See related article: SEC fines Stoner Cats for selling unregistered securities as NFTs

رفض قاضٍ فيدرالي أمريكي منح لجنة الأوراق المالية والبورصات الأمريكية (SEC) الوصول الفوري إلى برنامج Binance.US، ردًا على اقتراح الهيئة التنظيمية الذي يطالب بمعلومات أكثر تفصيلاً من Binance وتوافر أكبر لمديريها التنفيذيين للإدلاء بشهاداتهم.

انظر المقال ذو الصلة: بورصة العملات المشفرة JPEX تغلق التداول وسط تحقيق من قبل الجهة التنظيمية في هونج كونج

حقائق سريعة

وقال قاضي المحكمة الفيدرالية ضياء فاروقي يوم الاثنين إنه "لا يميل إلى السماح بالتفتيش في هذا الوقت". وطلب من لجنة الأوراق المالية والبورصات تقديم طلبات أكثر تحديدًا، وفقًا لتقرير بلومبرج.

Citigroup, the third largest banking institution in the U.S., announced Monday the launch of Citi Token Services, a blockchain-based cross-border payments solution for institutional clients.

See related article: Standard Chartered’s crypto custody arm Zodia launches in Singapore

Fast facts

The service will use tokenized deposits and smart contracts to provide real-time cross-border settlements and liquidity for institutional clients anywhere in the world and around the clock, Citi said in a press release. 

“[The news] is another sign that the big financial institutions continue to embrace blockchain technology,” Singapore-based digital asset services platform Matrixport’s head of research and strategy Markus Thielen said in an email statement. “Undoubtedly, blockchain is seen as a technological improvement to the current financial system.”

Citi Token Services was tested in a piloting program with logistics company Maersk. 

The private blockchain technology used for Citi Token Services is owned and managed by Citi itself. The company explained that customers will not need to host a blockchain node to use the service.

JPMorgan Chase & Co. is also exploring a blockchain-based deposit token for faster cross-border payments and settlements, according to a Bloomberg report earlier in September.

Citigroup has over 13,000 institutional clients including 90% of global Fortune 500 companies, according to the company website. Overall, it has over 100 million customers across nearly 160 countries.

See related article: Coinbase and Wall Street: The merging worlds of TradFi and crypto

أوقفت بورصة العملات المشفرة JPEX، التي تتخذ من دبي مقراً لها، التداول على منصتها وسط تحقيق أجرته لجنة الأوراق المالية والعقود الآجلة في هونج كونج، والتي قالت إن الشركة تعمل ككيان غير مرخص، وفقًا لتقارير إعلامية.

انظر المقال ذو الصلة: صناعة Web3 في هونج كونج تشكل جمعيات جديدة لدفع طموحات مركز التشفير

حقائق سريعة

وعزت بورصة JPEX اللوم إلى "صناع السوق من الأطراف الثالثة" في تجميد الأموال وتقييد السيولة، بعد أنباء عن إجراء السلطات في هونج كونج تحقيقات.

وفي الوقت نفسه، تلقت شرطة هونج كونج ما لا يقل عن 83 شكوى بشأن البورصة، وفقا لتقرير صحيفة ساوث تشاينا مورنينج بوست يوم الاثنين.

The U.S. House Financial Services Committee announced last Friday that it will discuss a new bill to prevent the issuance of a central bank digital currency (CBDC).

See related article: Nepal central bank plans CBDC within two years

Fast facts

Committee Chairman Patrick McHenry announced that the markup, a session where committee members examine the proposal in detail and possibly offer amendments, of the Digital Dollar Pilot Prevention Act will take place on Sept. 20.

#NEW: Chairman @PatrickMcHenry announces a markup of legislation to strengthen American national security and prevent the issuance of a central bank digital currency.📖 Read more 🔗https://t.co/oy3oASJYkA

— Financial Services GOP (@FinancialCmte) September 16, 2023

The bill was first introduced by Alex Mooney, a  Republican Party representative, on May 26. 

“This bill would prohibit the Federal Reserve from establishing, carrying out, or approving a program intended to test the practicability of issuing a CBDC,” Mooney’s announcement said. “CBDCs pose major privacy and government surveillance concerns.”

He also claimed that China is utilizing its CBDC pilot program to monitor citizens and curtail banking access for government dissenters.

In July, the Federal Reserve said it had not decided to issue a CBDC and added that legal authorization remains a prerequisite for such developments. 

The Fed’s statement came as it launched FedNow, a real-time interbank payment settlement service for individuals and businesses, on July 20. According to the U.S. central bank, FedNow is unrelated to digital currencies.

See related article: Asia’s richest man bets on blockchain, CBDC

وافقت محكمة الإفلاس الأمريكية في ديلاوير على طلب بورصة العملات المشفرة الفاشلة FTX ببيع أصولها المشفرة في جلسة استماع بالمحكمة يوم الأربعاء. وتتطلع الشركة، بقيادة خبير إعادة الهيكلة جون جيه راي الثالث، إلى سداد ديونها مع النظر في إمكانية تجديد منصة التداول.

انظر المقال ذو الصلة: لماذا تستحق FTX فرصة ثانية

حقائق سريعة

سمح قاضي محكمة الإفلاس في ولاية ديلاوير جون دورسي للبورصة المفلسة بتصفية ما يصل إلى 100 مليون دولار أمريكي من العملات المشفرة أسبوعيًا، وفقًا لوثائق المحكمة. قد يرتفع الحد إلى 200 مليون دولار أمريكي بعد موافقة لجنتين تمثلان عملاء FTX.

أعلنت شركة Astar Network اليابانية يوم الأربعاء أنها تطلق حل zkEVM الخاص بها المدعوم من Polygon's Chain Developer Kit (CDK) لتحسين قابلية التشغيل البيني لشبكتها مع سلاسل Ethereum Virtual Machine (EVM).

انظر المقال ذو الصلة: كيف تنير اليابان طريق مستقبل تقنية البلوك تشين

حقائق سريعة

آلة Ethereum الافتراضية ذات المعرفة الصفرية من Astar، أو zkEVM باختصار، هي حل توسيع الطبقة 2 لـ Ethereum والذي يوفر بيئة حوسبة برمجية أكثر قابلية للتوسع للتطبيقات المستندة إلى Ethereum.

Hong Kong-based cryptocurrency exchange CoinEx Global suffered a security breach on Tuesday, resulting in an estimated loss of US$43 million in cryptocurrencies.

See related article: Crypto in the time of cockroaches

Fast facts

The exchange is still assessing the full extent of lost crypto assets in the exploit but said on Wednesday morning that it identified a second set of suspicious wallet addresses linked to the breach, which siphoned off tokens such as Ether, XRP, Solana, Kadena and Dagger.

#CoinExResponseUpdate – We've identified the 2nd series of suspicious wallet addresses linked to the hack:$ETH:0x2118e4432d668aCFa347ddBA0efCcc6BB04DB2970x1A61Df134d766f1e240FBFAEe79bBeCC04195f620x40cBe7580168d52b7FEC884120B31115c3F7E37E$XRP:…

— CoinEx Global (@coinexcom) September 13, 2023

Before CoinEx’s latest update, Blockchain security firm PeckShield said on X (formerly Twitter) on Wednesday estimated the exchange’s loss to be around US$43 million. The first set of addresses linked to the hack identified by CoinEx stole Ether, Bitcoin and Tron from the platform.

CoinEx said a notice shared on its X account on Tuesday following the attack that all user assets are safe and secure. The exchange has suspended deposit and withdrawal services and assured that affected users will receive full compensation for any losses caused by the hack.

Hackers stole more than US$3.8 billion in cryptocurrencies last year, according to blockchain forensics firm Chainalysis. Out of that amount, North Korea-backed cyber actors hacked US$1.7 billion.

See related article: Crypto hackers stole record US$3.8 bln in 2022, mostly from DeFi and cross-chain bridges: Chainalysis

The U.S. affiliate of the world’s largest cryptocurrency exchange Binance has laid off one-third of its staff, or more than 100 employees. Brian Shroder, the chief executive officer, has also departed the company, a Binance.US spokesperson told Forkast on Wednesday.

See related article: Mastercard and Binance end crypto card partnership, services shut down in Latin America, Middle East 

Fast facts

This downsizing effort will provide Binance.US “more than seven years of financial runway,” the company spokesperson told Forkast in an email statement. 

“The SEC’s aggressive attempts to cripple our industry and the resulting impacts on our business have real world consequences for American jobs and innovation, and this is an unfortunate example of that,” the spokesperson added.

The crypto exchange has been dealing with growing regulatory pressures in the U.S. this year. In June, the company was sued by the Securities and Exchange Commission (SEC) for allegedly violating securities regulations.

Norman Reed, the company’s chief legal officer, assumed Shroder’s position on an interim basis, the Binance.US spokesperson confirmed with Forkast.

Binance, the parent company, also faces regulatory scrutiny from the U.S. The Commodity Futures Trading Commission (CFTC) filed a civil suit against the exchange and founder Changpeng Zhao in March for operating an “intentionally opaque” business to take advantage of “regulatory arbitrage.”

The U.S. Department of Justice is also reported to be closely monitoring Binance with the possibility of pursuing fraud charges against the trading platform. 

Last week, Binance’s global head of product Mayur Kamat resigned from the company, according to Reuters.

See related article: Binance denies Russia sanctions violation reported by WSJ

Zodia Custody, the cryptocurrency custodian owned by Standard Chartered, announced Tuesday that it is launching its services in Singapore for financial institutions, CNBC reported. Standard Chartered is a U.K.-based multinational banking conglomerate with total assets of US$838.7 billion as of July 2023.

See related article: Will Singapore steady the stablecoin ship?

Fast facts

Zodia reportedly said it is the first bank-owned entity to provide crypto custody services for institutional clients in Singapore.

Singapore is moving to the “next level of maturity” in regulating crypto and developing central bank digital currencies (CBDC), Zodia Chief Executive Officer Julian Sawyer told CNBC.

Last Wednesday, Zodia said it received an in-principle approval from Abu Dhabi to pursue regulated over-the-counter crypto broker-dealer activities in the United Arab Emirates capital.

Earlier in February, Zodia announced a joint venture with financial services firm SBI Holdings for custody services in Japan.

Standard Chartered launched Zodia in July 2021 with Chicago-based financial services firm Northern Trust.

Several major cryptocurrency firms with a global reach have recently expanded their presence in Singapore. Gemini, the cryptocurrency exchange founded by the Winklevoss brothers, announced in June that it’s growing its headcount in the city-state to operate as an expansion hub in the Asia-Pacific.

See related article: Singapore to require crypto firms to hold customer assets in a trust; restricts lending, staking by retail users

Oasys, a blockchain-based game development platform, will team up with non-fungible token (NFT) marketplace αU market and cryptocurrency wallet αU Wallet – a crypto wallet by KDDI, one of Japan’s top three telecom companies – for users to trade NFTs on the αU market.

See related article: Weekly Market Wrap: ETF developments bolsters Bitcoin above US$26,000

Fast facts

This will enable users to buy and sell NFTs on Oasys in the αU market, manage the assets directly in the αU wallet, and transfer and deposit Oasys (OAS) tokens in the wallet.

The collaboration will also open up Oasys-native games and decentralized applications to KDDI’s large user base, potentially bringing a new influx of gamers to blockchain games on the network.

The announcement is part of Oasys’ wider Web3 initiative. It follows the launch of the “αU” (Alpha You) metaverse and Web3 service earlier in March, that allows any user to become a creator. 

The Oasys token was trading near a three-week low of US$0.0465 at 10:00 p.m. on Monday in Hong Kong, down over 13% in the past month, according to CoinMarketCap data.

See related article: DeFi revenue remains resilient despite Curve Finance hack

Animoca Brands, a Hong Kong-based software and investment giant specializing in blockchain entertainment, announced Monday that it has raised US$20 million to accelerate the development of Mocaverse, its flagship project to build a decentralized metaverse.

See related article: Animoca Brands says it holds US$3.4 bln in assets

Fast facts

The new capital will be used to develop Mocaverse’s core infrastructure, such as its digital identity system and loyalty program. It will also be used to acquire new partners and expand the project’s reach.

The funding round was led by Hong Kong-based venture capital firm CMCC Global, along with other investors including Kingsway Capital, Liberty City Ventures, GameFi Ventures, Sky Mavis founder Aleksander Larsen, founder of Yield Guild Games Gabby Dizon, and institutional investors of Koda Capital.

Mocaverse is a decentralized metaverse that aims to empower users to create their own digital identities, accrue reputation, and earn and spend loyalty points. It will also serve as a platform for users to access a variety of blockchain-powered games, applications, and services.

Mocaverse will soon launch Moca ID, a non-transferrable NFT collection that will allow users to create their own on-chain identities. Moca ID holders are expected to gain exclusive access to certain metaverse features and the opportunity to earn loyalty points through active engagement. 

“In addition to empowering users to participate in a vibrant community that generates new economic opportunities, Mocaverse will also serve as the digital identity, reputation, and loyalty system for other decentralized organizations,” chairman and co-founder of Animoca Yat Siu said in the press release.

See related article: Korea Blockchain Week: diverging crypto paths for the US and Asia

FTX cryptocurrency exchange has filed a lawsuit against LayerZero Labs, the company behind cross-chain interoperability protocol LayerZero, to recover US$21.37 million that LayerZero allegedly withdrew from the exchange illegally prior to its Chapter 11 bankruptcy.

See related article: The rise and continuing fall of Sam Bankman-Fried: A step-by-step guide to his case so far

Fast facts

FTX’s complaint alleges that LayerZero exploited Alameda Ventures, the venture capital arm of FTX’s sister company Alameda Research, by withdrawing money in the time of financial difficulties at FTX using insider knowledge.

On top of the US$21 million recovery, FTX also seeks to cancel agreements made prior to the collapse.

Alameda Ventures entered a series of transactions with LayerZero from January to May last year, including Alameda paying over US$70 million across two transactions to purchase a 4.92% stake in LayerZero. 

In March, Alameda Ventures also paid another US$25 million for 100 million STG tokens at Alameda’s public auction. STG is the native token for StarGate Finance, a cross-chain liquidity platform built on LayerZero.

In February 2022, LayerZero lent $45 million to Alameda Research under a promissory note bearing an annual interest rate of 8%. When FTX started to collapse in November 2022, LayerZero sought a deal for the return of its stake owned by Alameda in exchange for the forgiveness of the US$45 million loan. 

Another deal was reached after the FTX collapse for LayerZero to purchase back 100 million STG tokens at a discount for US$10 million on Nov. 9, 2022, but this transaction was not completed as neither party transferred or paid for the tokens. 

FTX’s filing described that this “fire-sale” capitalized on Alameda’s financial distress.

FTX also wants to recoup US$13 million withdrawn by LayerZero’s former chief operating officer Ari Litan and US$6.65 million by LayerZero’s subsidiary Skip & Goose.

Bryan Pellegrino, the co-founder and chief executive officer of LayerZero Labs, wrote on X social media that FTX suit is “filled with unsubstantiated claims,” explaining that the company has made continued efforts to address issues that have been ignored by FTX.

FTX and its sister hedge fund Alameda Research filed for Chapter 11 bankruptcy protection on Nov. 1. Allegations of misappropriation of billions of dollars in client funds and other wrongdoings soon followed.

Now led by corporate restructuring expert John J. Ray III, FTX is trying to sell, stake and hedge the exchange’s US$3 billion of crypto holdings. The Wall Street Journal reported in late June that the company is now mulling a revival.

FTX is also trying to claw back millions of dollars it paid celebrity endorsers and sports teams prior to its bankruptcy. The list includes Shaquille O’Neal, tennis pro Naomi Osaka and the Miami Heats.

See related article: Former FTX exec Ryan Salame to forfeit US$1.5 billion after pleading guilty to charges

قدمت لجنة الأوراق المالية والبورصات الأمريكية (SEC) ملفًا يوم الجمعة الماضي دفع محكمة المنطقة الجنوبية من نيويورك إلى استئناف حكمها بشأن الدعوى القضائية التي رفعتها الوكالة ضد شركة Ripple Labs.

انظر المقال ذو الصلة: الرئيس التنفيذي السابق لشركة FTX، ريان سلامة، سيخسر 1.5 مليار دولار أمريكي بعد إقراره بالذنب في التهم الموجهة إليه

حقائق سريعة

وطلبت هيئة الأوراق المالية والبورصات من المحكمة مراجعة حكمها السابق الذي أصدرته القاضية أناليزا توريس، والذي أثار "مشاكل قانونية معقدة"، وفقا للملف.

في شهر يوليو/تموز، أصدر القاضي توريس حكما موجزا يقضي بأن مبيعات XRP التي تقوم بها شركة Ripple للمستثمرين المؤسسيين تنتهك قوانين الأوراق المالية، ولكن المبيعات في البورصات العامة للمستثمرين الأفراد لا تنتهك هذه القوانين.

Former FTX top executive Ryan Salame pleaded guilty Thursday in New York to two criminal charges related to the collapse of the cryptocurrency exchange last November. Salame has agreed to forfeit approximately US$1.5 billion, including two real estate properties and a Porsche automobile, according to The New York Times.

See related article: Sam Bankman-Fried’s lawyers granted unlimited prison visits; FTX tries to sell crypto holdings

Fast facts

Salame, the former co-chief executive of FTX’s Bahamas-based subsidiary FTX Digital Markets, pleaded guilty to charges of conspiracy to operate unlicensed money transmitting business and conspiracy to make unlawful political contributions, according to the U.S. Attorney’s Office in the Southern District of New York.

Salame is the fourth FTX top-level associate to plead guilty to charges involved with FTX, following Nishad Singh, Gary Wang and Caroline Ellison. 

The court trial for FTX founder Sam Bankman-Fried is expected to take place on Oct. 3, over his alleged multibillion-dollar wire and securities fraud charges.

Bankman-Fried was jailed Aug. 11 for witness tampering, following his arrest in the Bahamas in December 2022. He maintains his innocence and has pleaded not guilty to all 13 charges brought against him.

FTX and its sister hedge fund Alameda Research filed for Chapter 11 bankruptcy protection on Nov. 1. Allegations of misappropriation of billions of dollars in client funds and other wrongdoings soon followed.

Now led by corporate restructuring expert John J. Ray III, FTX is trying to sell, stake and hedge the exchange’s US$3 billion of crypto holdings. The Wall Street Journal reported in late June that the company is now mulling a revival.

See related article: Why FTX deserves a second chance

The Commodities Futures Trading Commission (CFTC) charged three U.S.-based decentralized finance (DeFi) protocols – Opyn, ZeroEx and Deridex – on Thursday for omitting necessary registrations as a merchant and illegal offerings of digital asset commodities.

See related article: US response to crypto is like ‘deer caught in headlights,’ says ex-CFTC chair

Fast facts

CFTC accused the projects of illegally offering “leveraged and margined” digital asset commodity transactions. Deridex and Opyn are charged with failing to register as a swap execution facility or a designated contract market, and as a futures commission merchant, according to the CFTC release.

The commission ordered Opyn, ZeroEx, and Deridex to pay penalties of US$250,000, US$200,000, and US$100,000, respectively, along with a cease and desist of operations in violation with CFTC rules.

The projects have agreed to the penalties to settle the charges.

“Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts,” said CFTC director of enforcement Ian McGinley in the press release. 

“They do not. The DeFi space may be novel, complex, and evolving, but the Division of Enforcement will continue to evolve with it and aggressively pursue those who operate unregistered platforms that allow U.S. persons to trade digital asset derivatives,” McGinley said.

See related article: Binance, Zhao sued by CFTC for alleged regulatory violations