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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.

UK financial regulator advises against rush to add crypto markets, Financial Times says

Britain’s chief financial regulator cautioned in a speech on Friday against adding crypto markets to his agency’s territory too quickly amid a government plan to make the UK a crypto hub, the Financial Times reported. The UK’s chancellor, Rishi Sunak, revealed plans in April to regulate stablecoins and issue an NFT as part of a bid to position the UK as a crypto hub, The Block reported at the time. Still, the head of the Financial Conduct Authority (FCA), Charles …

Waning institutional demand is forcing high-yield crypto accounts to slash rates

The returns available on crypto holdings have fallen to their lowest levels in more than a year on some platforms as institutional demand to borrow recedes, diminishing one of the market’s most attractive selling points for smaller investors.  Crypto lending platforms such as BlockFi and Celsius have experienced staggering growth since 2020, attracting millions of customers by providing yields to individual investors that have ranged from a few percent to as high as 17%.  These platforms take deposited funds and …

Tether reduces commercial paper holdings to improve quality of reserves

Stablecoin issuer Tether said it reduced its commercial paper holdings in the first quarter of this year to improve the quality of its reserves. Tether reported today that it had reduced its commercial paper to $19.9 billion from $24.2 billion the previous quarter, a 17% decrease. It also added U.S. Treasury bills, increasing them to $39.2 billion from $34.5 billion.  The company added that it planned to cut its commercial paper by another 20%, which would be reflected in its …

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 …

Do Kwon puts his Terra revival plan to the vote

Quick Take Terraform Labs CEO Do Kwon has put his Terra revival plan to the vote following last week’s collapse. Community members appear to be against his idea, but might not have the voting power to prevent it. Terraform Labs CEO Do Kwon has put his Terra revival plan to the vote among holders of the ecosystem’s Luna governance token. The plan is to fork the current Terra blockchain and allocate amounts of Luna to previous holders according to a …

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 …

Algorithmic stablecoins need payments adoption to succeed, Goldman argues

For algorithmic stablecoins to have a long-term future they’ll need to find wider adoption for payments in the real economy, according to analysts at Goldman Sachs.  “Stablecoins have limited use as a payments medium at this time. If that real-world use case were to grow over time, it could create a more stable demand base for these assets,” the investment bank wrote in a research report dated Monday. “Hypothetically, an algorithmic stablecoin could survive in the long-run, if it were …

Terra community seems dead set against Do Kwon’s fork proposal

The majority of the Terra community is against the idea of forking the blockchain after its collapse last week, according to a preliminary poll on the network’s research and governance forum.  As of 6:45 a.m. ET on Tuesday, 90% of the more than 1,000 votes in the online poll reject a fork, which would create a new, parallel version of the Terra blockchain. The ballot is open to anyone who logs into the Terra forum, whether or not they hold …