Author: Sincerity Jahswill

Terraform Labs, the creator behind the Terra blockchain, has been granted court approval to shut down its operations. United States Bankruptcy Judge Brendan Shannon made the decision after a court hearing on Thursday, thus allowing the company to proceed with its bankruptcy plan.

Following the court’s approval to wind down its operations, the company has agreed to pay between $184.5 million and $442.2 million to investors and other stakeholders as part of its bankruptcy proceedings.

What Happened?

Several months before the recent hearing, the U.S. Securities and Exchange Commission (SEC) charged Terraform Labs and its co-founder, Do Kwon with misleading investors about the stability of their algorithmic stablecoin, Terra USD (UST), and other crypto asset securities. The collapse of the Terra in May 2022 wiped out an estimated $40 billion from the crypto market. 

Terraform Labs has agreed to pay approximately $4.5 billion in disgorgement and civil penalties to settle charges with the SEC, while co-founder Do Kwon will personally pay at least $204.32 million. As part of the settlement, Kwon and Terraform Labs will be permanently banned from buying or selling crypto and participating in crypto-asset offerings.

However, there’s a catch. The SEC’s $4.5 billion settlement with Terraform Labs may not be fully realized, as the company’s bankruptcy process prioritizes crypto loss claims, and the total losses remain unknown. This means that investors and creditors will be paid first, leaving the SEC’s payout uncertain.

What’s Next for Terra?

As part of its wind-down process, Terraform Labs will undergo a final chain upgrade under Proposal 4818, paving the way for community governance. The company’s cryptocurrency wallet still holds approximately $2 million in altcoins including Convex Finance (CVX).

Post-upgrade, the Terra blockchain’s future will rely heavily on community-led initiatives. Meanwhile, Terraform Labs is liquidating other assets to fulfill financial obligations stemming from its settlement with the SEC.

On the other hand, Kwon was arrested in Montenegro last year after evading authorities for months. Since then, he’s been in custody, awaiting a possible extradition to either the United States or South Korea.

Famous blockchain analyst ZachXBT has exposed how a creditor of Genesis, a bankrupt crypto lender, fell prey to a social engineering attack, losing  $243 million. Three masterminds identified as Greavys (Malone Iam), Wiz (Veer Chetal), and Box (Jeandiel Serrano) perpetrated the heist.  

$243M Crypto Heist Exposed

The scammers, posing as Google Support, used a spoofed number to gain the victim’s trust and compromise their accounts. Next, Box called the victim, claiming to be Gemini Exchange support, stating the user’s account had been hacked.

The scammers convinced the victim to reset their 2-factor authenticator (2FA) and send Gemini funds to a compromised wallet. Using AnyDesk, they accessed the victim’s screen and leaked private keys from the Bitcoin Core wallet. Having done this, the heist was complete. 

However, ZachXBT along with other blockchain trackers including Cryptoforensic Investigators, zeroShadow, and the Binance Security Team commenced the investigation. The scammers’ jubilation over their newly ill-gotten wealth was short-lived.

Investigation Results

Transaction records revealed the stolen funds were swiftly laundered through over 15 exchanges including eXch, a non-KYC compliant exchange, and Thorswap. The funds were swapped between Bitcoin, Litecoin, Ethereum, and Monero.  

As investigators dug deeper, Greavys’ flashy lifestyle was uncovered. He had purchased over 10 luxury cars and spent hundreds of thousands of dollars on lavish nights out in Los Angeles and Miami. His Instagram account revealed his true identity and his location was pinpointed through social media posts.

Meanwhile, Box’s careless reuse of his profile picture across platforms made it easy for investigators to track him down. His role in the scam, posing as a Gemini representative, was important to the heist’s success.

Scammers Arrested

According to ZachXBT, over $9 million in illicit funds were frozen and more than $500,000 was returned to the victim. While the report shows there were three masterminds of the scam, only Box and  Greavys have been arrested in Miami and Los Angeles respectively.

The $243 million crypto heist serves as a reminder that crypto crimes are on the rise. It shows the importance of vigilance among digital entrepreneurs and investors. While such crimes can be traced and prosecuted, individuals must take proactive measures to safeguard themselves.

Authorities in the United Kingdom have introduced a new bill that officially recognizes digital assets, including crypto and non-fungible tokens (NFTs), as personal property under English and Welsh law. This provides long-awaited legal clarity and a clear framework for these innovative and rapidly developing assets.

Bill to Recognize Crypto as “Personal Property”

In a September 11 notice, the Ministry of Justice Publicized the introduction of his new bill explaining a few major details about it. It noted that the legislation will establish a new legal classification for digital assets, formally recognizing them as a type of property, referred to as “things”.

The bill will address the growing need for legal clarity in the crypto industry, especially in cases where ownership is disputed or digital holdings are involved in settlements, such as divorce proceedings. By providing legal protection to owners and companies, the government hopes to prevent fraud as judges will have the necessary tools to address complex cases.

The recently appointed Minister of Justice, Heidi Alexander stressed the importance of keeping pace with new technologies, stating that this legislation will help maintain the UK’s position as a global leader in crypto. The bill is seen as a significant step forward in recognizing the unique features of digital assets and providing a clear legal foundation for their use and ownership. 

History of Crypto in the UK

The UK government started exploring cryptocurrencies in 2013. By 2016, the Financial Conduct Authority (FCA) was warning about risks. In 2018, a task force was formed to regulate crypto assets, marking a significant step towards formal regulation.

Since then, the UK has taken several steps to strengthen its regulatory framework. These include implementing anti-money laundering rules in 2020, banning crypto derivatives for retail consumers in 2021, introducing a bill to strengthen economic crime laws in 2022, and setting marketing rules for crypto firms in 2023. 

Its no doubt that the UK has been establishing a balanced approach to crypto regulation, promoting innovation while protecting consumers and maintaining financial stability. Other countries like Nigeria, Russia, Qatar, and Ghana keep adjusting their frameworks to accommodate Digital assets with crypto being the top on their radar.