Market Update & Industry News - Week ending 29 December 2023

🔷 India’s Financial Intelligence Unit (FIU) issued compliance show cause notices to 9 offshore crypto exchanges alleging illegally operating in India. Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex are alleged to be non-compliant with the Prevention of Money Laundering Act and Counter Financing of Terrorism Framework enforced by India’s Finance Ministry. The FIU stated that steps have been taken to block all 9 URLs.

Appold View: Possibly a move to close the loop on citizens not declaring their taxable gains rather than just AML & KYC related. In an age of VPNs, this will not stop people from trading but is certainly a move to send a clear message to potential tax evaders

🔷 A US Federal Judge ruled that the Founder of Terraform Labs which created TerraUSD and Luna stablecoins violated US law by failing to register the two digital currencies as securities. In an ongoing case against Terraform Labs by the Securities and Exchange Commission, the SEC alleges TerraUSD and Luna were securities because they qualified as investment contracts. Both cryptocurrencies lost an estimated $40b when TerraUSD failed to maintain a $1 value.

Appold View: The Founder, Do Kwon, didn’t really help himself when he went into hiding after the crash of the Terra blockchain and was later caught in Montenegro, where he now fights extradition to the US.

🔷 US prosecutors announced that they do not plan to conduct a second trial against the founder and former CEO of FTX, Sam Bankman Fried. In a letter filed at the Federal Court in Manhattan, prosecutors alleged strong public interest outweighed the benefits of a second trial. Sam Bankman Fried faces decades in prison after being convicted of fraud and money laundering charges prior to the collapse of FTX.

Appold View: He faced 6 further charges including finance violations, conspiracy to commit bribery and conspiracy to operate an unlicenced money-transmitting business. The view appears to be that resolving the original case is more important than starting a second trial. Having been found guilty of fraud and money laundering already, he will be sentenced on the 28th of March 2024.