SEC Joins Request to Postpone Trial for Do Kwon; USDC Wallet Adoption Soars: 59%,OKX’s Dubai Subsidiary Secures Conditional Crypto License;
The United States Securities and Exchange Commission (SEC) has aligned with a request from Do Kwon’s legal team to delay the trial proceedings against the Terraform Labs co-founder until after his extradition to the United States. In a filing on January 15 in the U.S. District Court for the Southern District of New York, the SEC expressed its readiness to proceed with the trial but supported the request for an adjournment, proposing a potential start date no earlier than March 18.
Do Kwon, co-founder of Terraform Labs, is facing charges from the SEC related to alleged involvement in a “multi-billion dollar crypto asset securities fraud.” The charges are linked to the tokens formerly known as TerraUSD (UST) and LUNA. The SEC’s case against Kwon and Terraform Labs accuses them of orchestrating fraudulent activities contributing to the collapse of the Terra ecosystem in May 2022.
Extradition Challenges
Do Kwon is currently situated in Montenegro, where he was arrested in March 2023. His legal team is navigating the complexities of the extradition process, and the proceedings have reportedly progressed more slowly than anticipated. Kwon’s lawyers requested a trial delay until he could participate in his defense in person, prompting the SEC to join in supporting a postponement.
Trial Date Proposal
While the SEC indicated its willingness to proceed with the trial on the initially scheduled date of January 29, it has endorsed a potential delay until March 18 or later to accommodate Kwon’s participation. The SEC suggested a trial commencement date of April 15, 2024, if the postponement is approved.
Opposition to Severance
Despite supporting the trial delay, the SEC opposed severing Kwon’s case from Terraform Labs’ case. Both entities were named as defendants when the SEC filed charges in February 2023. The charges allege the involvement of Kwon and Terraform Labs in a significant crypto asset securities fraud.
The SEC’s collaboration with Do Kwon’s request for a trial postponement reflects the recognition of logistical challenges posed by the extradition process. As legal proceedings unfold, the trial date adjustment aims to ensure a fair and participatory defense for Kwon, who remains entangled in the legal complexities surrounding the collapse of the Terra ecosystem and the associated alleged securities fraud.
USDC Wallet Adoption Soars: 59% Growth in 2023 Despite Circulation Drop
The latest report from Circle, the issuer of USD Coin (USDC), reveals a remarkable 59% growth in the number of wallets holding at least $10 worth of USDC throughout 2023. This growth stands out even as USDC experienced a substantial $20 billion reduction in its circulating supply, indicating increased user adoption amid market capitalization fluctuations.
Circulating Supply Decline
The “State of the USDC Economy” report discloses that USDC’s circulating supply decreased from $45 billion to $25 billion in the initial 11 months of 2023, marking a notable 44% decline. Circle attributes this reduction to various factors such as rising interest rates, regulatory crackdowns, bankruptcies, and instances of fraud in the cryptocurrency space. The report suggests that users shifted their funds from the digital asset ecosystem to traditional markets due to perceived risks and opportunity costs associated with holding USDC.
Growing Acceptance and Utility
Despite the contraction in circulating supply, the report emphasizes positive signs pointing to growing acceptance of USDC. Over $197 billion worth of USDC was either minted or burned during the year, reinforcing the coin’s role as a bridge between the digital asset economy and traditional finance. Additionally, the number of wallets holding over $10 worth of USDC surpassed 2.7 million, showcasing a substantial 59% increase compared to 2022.
Tumultuous Year and Ongoing Developments
The year 2023 proved to be tumultuous for USDC, with a brief peg loss in March during a banking crisis in the United States. Despite these challenges, the coin quickly regained its peg following intervention by the Federal Reserve to reimburse depositors of affected institutions.
Looking ahead to 2024, Circle has filed for an initial public offering, indicating its commitment to further developing the USDC ecosystem. Additionally, partnerships, such as the collaboration with Yellow Card to expand USDC usage in Africa, signify ongoing efforts to enhance the utility and accessibility of the stablecoin.
OKX’s Dubai Subsidiary Secures Conditional Crypto License, Eyes Regulated Services
OKX, a prominent cryptocurrency exchange, has achieved a significant milestone as its Dubai subsidiary was granted a virtual asset service provider (VASP) license by Dubai’s Virtual Assets Regulatory Authority (VARA) for exchange services. This development marks a crucial step in the expansion of regulated cryptocurrency services in the region.
Conditional License and Operational Status
Although OKX’s Dubai subsidiary has received the VASP license, it is currently classified as “non-operational.” The company expressed its commitment to meeting the regulator’s requirements before becoming fully operational. Rifad Mahasneh, OKX’s General Manager for the Middle East and North Africa, stated that the team is actively working to fulfill these conditions, anticipating the license to be operational within the next few months.
Regulated Services and Offerings
Once operational, OKX Middle East is set to provide regulated VASP services, including spot and fiat trading services, AED (United Arab Emirates Dirham) deposits and withdrawals, and spot trading pairs. These services will cater to both retail and institutional users, offering a regulated and secure environment for cryptocurrency transactions.
Regulatory Framework in Dubai
Dubai has been proactive in establishing a legal framework for virtual assets. In March 2022, Sheikh Mohammed bin Rashid Al Maktoum, Dubai’s prime minister and ruler, approved a comprehensive virtual assets law, paving the way for regulated cryptocurrency activities within the region. VARA, with enforcement powers in special development and free zones, was appointed to oversee regulatory compliance.
Efficient License Application Process
Mahasneh commended VARA’s license application process, highlighting its efficiency and effectiveness in regulating the local virtual assets sector. The collaboration between OKX and VARA underscores the importance of clear regulations in fostering responsible growth within the cryptocurrency space.
OKX’s achievement of a conditional crypto license in Dubai signals a positive step towards regulatory compliance and the establishment of a secure and transparent crypto ecosystem in the region. As the subsidiary progresses towards full operational status, it aims to contribute to the growth and adoption of regulated cryptocurrency services in the Middle East.
