The collapse of Terra's Luna and UST has now caught the eye of the world's top financial
leaders.
Welcome to The Daily Forkast, May 20th, 2022.
I'm Megha Chaddah of Forkast covering all things blockchain.
At a meeting in Germany, finance ministers from the G7 countries have urged swifter regulation
of cryptocurrencies.
We'll take a look at that, plus a whole lot more coming up.
Let's get you up to speed from Asia to the world.
Join thousands of NFT traders who already start their day on CryptoSlam.
Let's kick off in Australia where, according to a report in The Guardian, the country's
largest bank has paused the launch of crypto trading on its app amid heightened volatility
in the market.
The Commonwealth Bank of Australia, or CBA, announced plans to allow customers to trade
up to ten cryptocurrencies, including Bitcoin and Ethereum last November.
The plan was in its early pilot stage and users already enrolled will be allowed to
continue to trade using the bank's app.
In a tech briefing, the bank's CEO Matt Comyn explained that crypto is a very volatile sector
with an enormous amount of interest and that more regulation is needed in the space before
continuing with the plan.
The country's Treasury has opened a consulting paper for public submissions on licensing
and custody of crypto assets, with feedback being accepted until May 27.
Australia's federal election is set to happen tomorrow and while crypto has not been a major
campaign issue, the incumbent Liberal Party has taken steps towards regulating the industry
after falling in line with the stock markets on Thursday.
Most major crypto tokens were back in green Friday morning in Asia with Bitcoin and Ethereum
both up over 5% over 24 hours.
Over in South Korea, Terra CEO Do Kwon and co-founder Shin Hyun-Seong are now facing
charges that include fraud.
According to local reports, five South Korean investors in Terra Luna with an accumulated
loss of around KRW1.4 billion or about US$1.1 million have filed the complaints.
They are being represented by LKB and Partners, which claims that the project didn't notify
investors about defects in UST and Luna and deceived investors by expanding the issuance
of Luna unlimitedly.
The law firm also claims that Terra violated the country's regulation on conducting fundraising
business without permission.
LKB is recruiting more UST and Luna investors to join the legal action and says it's also
receiving inquiries from investors overseas.
The complaint has been filed to the Joint Investigation Team on financial and securities
crime in Seoul.
You can find those stories and more at Forkast.News.
The recent collapse of the Terra ecosystem has also caught the attention of regulators
worldwide, and that includes the G7 countries.
After meeting this week, the world's top financial leaders are now calling for swift and comprehensive
regulation of cryptocurrencies.
Forkast's Pradipta Mukherjee reports.
Regulations for crypto assets are taking center-stage following the downfall of the Terra Blockchain
and its Terra USD algorithmic stablecoin last week.
The latest to focus on this are the finance ministers from the Group of Seven or better
known as G7.
G7 is an inter-governmental political forum consisting of Canada, France, Germany, Italy,
Japan, the United Kingdom and the United States, with the European Union as a non enumerated
member.
Met in Germany this week and they have now urged the Financial Stability Board or FSB
to accelerate crypto regulations.
Terra's collapse pulverized an estimated US$45 billion from the blockchain's ecosystem and
it has driven the urgency for cryptocurrency regulation.
During a May 10th Senate hearing, US Treasury Secretary Janet Yellen cited Terra when she
highlighted the risks stablecoins present to the financial system and also called for
its regulation.
So I think that simply illustrates that this is a rapidly growing product and that there
there are risks to financial stability and we need a framework that's that's appropriate.
Despite the UST de-pegging fiasco, major Stablecoins, such as USDC, USDT and the algorithmic Stablecoin
Dai are currently trading at US$1.
Of course we will be keeping watch for any more developments on cryptocurrency regulation.
For Forkast, I am Pradipta Mukherjee.
And finally, experts say a lawsuit involving a lien over an NFT in Singapore could have
global implications in determining' the oversight legal institutions have over digital assets.
Forkast's Lachlan Keller reports.
In a ruling released on Monday, the High Court of Singapore placed a proprietary injunction
on an NFT which is enforceable globally.
The Honorable Justice Lee Seiu Kin blocked any sale and transfer of ownership of the
Bored Ape Yacht Club #2162 NFT, which is worth an estimated half million US dollars.
The defendant identified in court papers as crypto influencer 'chefpierre' has the right
to respond.
The ruling comes as courts around the world grapple with lawsuits in a relatively nascent
industry that has already thrived.
Global sales of NFTs reached US$18.5 billion last year, 570 times higher than the previous
year.
While Crypto Slam expects sales to surpass $30 billion this year.
In April, a court in the Chinese city of Hangzhou ruled that marketplaces for the trade of NFTs
bear responsibility for keeping out fakes.
Days later, the UK's High Court ruled that NFTs are private property in a watered down
ruling that applies the definition only to the token and not the artwork it represents.
Withers Khattar Wong, the Singapore based law firm, which represented the claimant,
told Forkast the ruling confirms that NFTs are valuable property worth protecting and
that courts are able to take jurisdiction over digital assets in the blockchain.
Their client, a high net worth NFT investor from Singapore who owns several Bored Apes,
use the NFT as collateral to borrow ether from 'chefpierre' on an Ethereum based decentralized
finance loan.
The Ether was staked back to the network to earn interest as part of the agreement with
the lender.
The NFT was placed in an escrow while it for safekeeping.
Then when 'chefpierre' foreclosed the loan, he transferred the NFT back to his personal
wallet.
But will enforcing the Singapore court's ruling prove a challenge?
One expert told Forkast it won't be easy.
Enforcing the Singapore judgment, per se, isn't an issue.
Singapore judgments are recognized all over the world.
The real issue is if Chef Pierre does not abide by the injunction, what are you going
to do?
You need to know who the person is and where they are really to enforce it.
And for that reason, enforceability is always going to be an issue when you're dealing with
someone who is essentially only a pseudonym, remains anonymous.
However, Haswell says the case does set a precedent in Singapore.
It will set a precedent in Singapore and other jurisdictions may well be guided by
that precedent.
They don't have to be.
It depends on the jurisdiction, but they may well.
That said, many jurisdictions are already taking the view that digital goods and NFT
would count as a digital good is actually property.
It can be bought, traded, sold, and it is protected by law in much the same way as physical
property, despite its intangible nature.
And really, that's the way it should be.
In the meantime, while the NFT is still listed on OpenSea and has been flagged for suspicious
activity, data shows it has been traded but not sold seven times in the past week, potentially
between accounts held by 'chefpierre' himself, perhaps in an effort to obfuscate the exact
location of the asset.
Forkast reached out to Chef Pierre for comment, but he had not responded by the time of recording.
For Forkast, I'm Lachlan Keller.
And that's The Daily Forkast.
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Thanks for watching.
I'm Forkast's Megha Chaddah, until next time.