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Lawsuits aimed at recouping UST/Luna losses test uncharted waters

Quick Take A major South Korean law firm, LKB & Partners, is suing Do Kwon and co-founder Daniel Shin on behalf of five investors. Other investors are also organizing online to launch their own lawsuits; we may end up seeing cases centered around whether TFL represented its products and the risks of investing accurately. This feature story is available to subscribers of The Block News Plus. You can continue reading this News Plus feature on The Block.

CFTC charges two men with $44 million cryptocurrency ‘Ponzi scheme’

The Commodity Futures Trading Commission (CFTC) on Thursday charged two US residents with fraud “akin to a Ponzi scheme” in soliciting about $44 million from at least 170 investors through a website and YouTube videos. Sam Ikkurty of Portland, Oregon, and Ravishankar Avadhnam of Aurora, Illinois, were identified in the CFTC announcement, which added that a restraining order had been issued by a judge freezing assets controlled by the two, preserving records and appointing a temporary receiver. The complaint alleges …

BitMEX founder Arthur Hayes avoids jail time, sentenced to six months of home detention

Arthur Hayes, one of the founders of crypto exchange BitMEX, avoided jail time Friday during his sentencing hearing in New York. Hayes was handed a sentence of six months of home detention as part of a two-year probationary period. He had previously pleaded guilty to violating the US Bank Secrecy Act (BSA). “I’m ready to turn the page,” Hayes said before the sentencing hearing. A representative for Hayes declined to comment following the hearing’s conclusion. The prosecution had asked for …

Aptos CEO faces billion dollar lawsuit by Glazer family member over equity

The co-founder and CEO of Aptos Labs, the Layer 1 blockchain startup founded by former Diem employees, faces a lawsuit from an early investor alleging she was cheated out of her fair share of equity.  Shari Glazer and her firm Swoon Capital are seeking up to $1 billion from Matonee, also known as Aptos Labs, according to a complaint filed with the Supreme Court of the State of New York in March.   Aptos Labs was founded by former Meta …

OpenSea disables Bored Ape NFT amid legal case in Singapore

OpenSea has disabled trading for a Bored Ape Yacht Club (BAYC) non-fungible token on its platform amid an ongoing court case in Singapore. The item in question, BAYC #2162, is now marked with a “reported for suspicious activity” tag on OpenSea, the world’s largest NFT marketplace. This tag prevents the current owner from being able to list the NFT for sale. Prospective buyers also cannot place offers for the item. An individual called Rajesh Rajkumar was able to secure an …

Arthur Hayes faces up to five years in his Friday sentencing, but jail time is unlikely

Former BitMEX CEO Arthur Hayes is slated for sentencing this Friday after pleading guilty to violating the US Bank Secrecy Act (BSA). Though Hayes faces a possible maximum sentence of five years in prison, it’s uncommon for BSA violations to result in jail time. The sentencing will close a legal chapter that began in October 2020, when the Department of Justice and the Commodity Futures Trading Commission (CFTC) lodged parallel actions against crypto derivatives exchange BitMEX and its owner-operators. Those …

South Korea revives ‘Grim Reaper’ financial crimes unit to investigate Terra’s collapse

A specialized financial crimes unit has been tasked with investigating last week’s collapse of the Terra blockchain’s main cryptocurrencies while founder Do Kwon faces hefty tax fines, according to South Korean media reports. The group, consisting of prosecutors and employees from the Financial Services Commission and the Financial Supervisory Service, will investigate the methods Terraform Labs used to attract investors, SBS News reported on Wednesday.  The unit’s accuracy and clinical approach has earned it the nickname “Yeouido Grim Reaper,” after …

Major Korean law firm decides to sue Do Kwon after UST collapse

LKB & Partners, one of the top law firms in South Korea, has decided to sue Terraform Labs founder and CEO Do Kwon after the sudden collapse of TerraUSD (UST) last week, Korean media reported on Wednesday. LKB will file the case against Kwon, a Korean national, on behalf of ordinary investors to the Seoul Metropolitan Police Agency, according to a report in the Munhwa Ilbo newspaper. Some of LKB’s employees may also join the case since they lost money …

Terraform Labs’ legal team resigns after UST collapse

The in-house legal team at Terraform Labs resigned shortly after the collapse of Terra’s algorithmic stablecoin wrought havoc on crypto markets. A person familiar with the matter told The Block that legal operations are now being handled by outside counsel. The LinkedIn profiles of Terraform Labs’ general counsel Marc Goldich, chief corporate counsel Lawrence Florio, and chief litigation and regulatory counsel Noah Axler show that all three stopped working for the company in May — all after less than a year …

South Korean politician calls for hearing on Terra crisis

Yun Chang-Hyun, a representative from South Korea’s ruling People Power Party, has called for a parliamentary hearing on TerraUSD (UST) after the stablecoin’s sudden collapse last week, local news outlet Newspim reported on Tuesday. “We should bring related exchange officials, including CEO Do Kwon of Terra, which has become a recent problem, to the National Assembly to hold a hearing on the cause of the situation and measures to protect investors,” Chang-Hyun reportedly said today at a plenary meeting of the …