21 February

Hong Kong looks ready to invite retail traders back to crypto. In a new consultation paper, the Securities and Futures Commission of Hong Kong (SFC) proposed ‘to allow all types of investors, including retail investors, to access trading services provided by licensed VA [virtual asset] trading platform operators.’

The proposal recommends that several conditions be met before crypto trading for retail investors is reopened, however—including knowledge and risk assessments, as well as potentially setting limits to how much exposure traders are allowed.

The SFC identified criteria for which cryptocurrencies would be available for trading, too. Trading platforms would be responsible for vetting. After that, though, the token pool appears relatively shallow, with the Commission proposing that only “large-cap virtual assets” be eligible for listing.

These and other aspects of the newly-proposed crypto regime in Hong Kong are still open for discussion. Interested parties looking to contribute to the process have until March 31, 2023. The regime is expected to come into effect on June 1, 2023.”

See Also: Huobi crypto exchange aims to expand to Hong Kong amid regulatory changes

“Saudi Arabian Oil Group (Saudi Aramco), the near $2 trillion worth state-owned energy company, has signed a memorandum of understanding (MoU) with droppGroup to explore co-developing a range of Web3 technologies.

The Web3 applications will be aimed at helping Aramco’s employees. This includes potential on-boarding, training ecosystems, as well as a tokenized network and rewards program.

droppGroup, a Web3 technology provider, has a tech stack that includes artificial intelligence (AI) and machine learning (ML), extended reality (XR), tokenized networks, and metaverse environments.”

“The number of Bitcoin (BTC) whales, or wallet addresses holding 1,000 or more BTC, hit its lowest level since August 2019 on Sunday. There were 2,027 whales on Sunday, February 19, according to crypto analytics service Glassnode. The number of Bitcoin whales peaked in February 2021 at just under 2,500 but has declined steadily since then.

The same trend doesn’t appear among so-called mega whales, those holding more than 10,000 BTC, representing an investment of over $250 million at current prices. There are just 117 mega whales, fairly close to the historical highs of 123 in November 2022, and 126 in October 2018.

However, the number of smaller investors in BTC, wallets holding over one coin, has gradually increased over the past five years. The number of wallets holding more than one BTC currently sits at 982,000, a solid rise from around 814,000 around his time last year, and 788,000 in February 2020.”

See Also: Arbitrum’s User Base Is Fastest Growing Among Leading Blockchains: Bernstein

The SEC’s findings paint a much clearer picture of the entire Terra system as a fraud, one just as elaborate and calculated as Sam Bankman-Fried’s FTX. They also point to a variety of unnamed counterparties who could eventually be targeted as collaborators in the fraud.

1. TerraUSD’s ‘stability’ was a complete and conscious fabrication.

The most important new information laid out by the SEC is that in May 2021, when it experienced a small depegging from its $1 target price, Terraform and Kwon ‘secretly discussed with a third party that the third party would purchase massive amounts of UST to restore the $1.00 peg.’ This worked, and terraUSD returned to $1.

But this bailout was not discussed publicly. Instead, Kwon and others cited the May 2021 restoration of the peg as proof that terraUSD was “automatically self-heal[ing].” This narrative, which the SEC calls a complete fabrication, was key to enticing subsequent investors into the scheme.

This is a precise analogue of the fake laboratory tests that earned Theranos founder Elizabeth Holmes a decade-plus prison sentence.

2. Do Kwon and his allies are cashing out – big time.

They claim that Kwon and accomplices ‘transferred over 10,000 bitcoin from Terraform and Luna Foundation Guard … accounts to an un-hosted wallet.’ They have, the SEC claims, converted over $100 million of that bitcoin into fiat withdrawals through a Swiss bank since June 2022.

3. The Chai ‘deal’ was even faker than we thought.

Not only did Do Kwon exaggerate the Chai-Terra relationship in his own statements, he created an entire fake server to move fake money around to simulate fake transactions, with the clear goal of deceiving investors.

4. It turns out US regulation does matter.

Kwon and his team ‘engaged in conduct within the United States that constituted significant steps in furtherance‘ of their alleged crimes. The documents detail a healthy number of U.S. victims and argue the conduct described ‘had a foreseeable substantial effect within the United States.‘”

See Also: Jump Crypto Is Unnamed Firm That Made $1.28B From Do Kwon’s Doomed Terra Ecosystem: Sources

“Binance has launched a new update to its fan token platform that focuses on helping sports teams engage with their fans by offering various rewards to tokenholders. Its fan club program will now let fans gather points they can exchange for rewards, including tickets to games, access to meet and greets, video clips from their favorite players and participation in exclusive dinners with the athletes.

Participants can collect points by participating in fan token activities like voting in polls or completing other tasks. Having a higher level of participation will allow fans to have access to better rewards.”