Singapore regulator attacks irrational oblivion to crypto risks. Korean ICO ban ineffective. Ava Labs-linked lawyer withdraws from class actions. Half of BTC trades fake? The Merge: legal questions.

CryptoLaw Newsletter #64

Hello everyone,

TLDR:

• Investors are irrationally oblivious to crypto risks, says Singapore regulator

• Ethereum’s much-anticipated Merge: legal consequences

• CryptoLeaks alleges dirty legal tricks by Avalanche against competitors

• South Korea says ICO ban is ineffective

• More than half of bitcoin trades are fake, says Forbes

• Can you deduct crypto losses from your (US) tax bill?

• Iran inspires Russia to use crypto for import payments

Top-5:

1. Bank of Korea concluded its 2017 ICO ban is ineffective: it did not stop stablecoin issuer Terra from offering its tokens through overseas corporate entities. It wants to regulate rather than ban token issues and views the EU’s MiCA Regulation as a source of inspiration for stablecoin regulation.

2. Investors are irrationally oblivious to crypto trading risks, according to Singapore’s market regulator. The Monetary Authority of Singapore (MAS) wants to restrict retail access to crypto products even further and is considering customer suitability tests and limiting access to credit facilities. MAS is in favour of digital asset and blockchain innovation, but not of cryptocurrency speculation, according to its managing director Menon. Cryptocurrencies are “unsuitable for use as money and as highly hazardous for retail investors” and “serve no useful function except as a vehicle for speculation” outside of the blockchain network. Menon’s speech was an attempt to clarify Singapore’s stance on crypto, which some accused of making a crypto U-turn.

3. What are the legal implications of Ethereum’s planned Merge? Law firm Latham & Watkins discusses the legal consequences of the scheduled hard fork, which range for NFT IP ownership potentially existing on two competing chains to redeemability of US-backed stablecoins.

4. Crypto Leaks alleges Ava Labs used dirty legal tricks against Avalanche competitors. Secretly recorded footage shows lawyer Kyle Roche boasting about his legal tactics to keep Avalanche off the regulatory radar and using US discovery rules to obtain information on crypto companies on the receiving end of his class action litigation, in return for a nice equity and token compensation. Reactions to the allegations were mixed. In the aftermath of the crypto storm, Roche withdrew from a number of the crypto class actions he had initiated.

5. More than half of bitcoin trades are fake, says Forbes. Its analysis of 157 crypto exchanges found that 51% of the daily bitcoin trading volume being reported is likely bogus, including non-economic or wash trading. The problem is particularly accute for “firms that tout big volume but operate with little or no regulatory oversight that would make their figures more credible”, including Binance.

And also…

• Is this stakeholder theory versus shareholder primacy but in DAO form?

eaglelex @eaglelex_eth

1/10 The @CreamdotFinance WHALE vs. @Balancer DAO fight is becoming one of the most interesting cases in DeFi. 👉A thread on DAO governance and veTokenomics 🧵

• Dubai’s Virtual Asset Regulatory Authority issued crypto marketing and promotion guidelines.

• The US FBI warned cyber criminals are increasingly exploiting vulnerabilities in DeFi.

• Paraguay’s president vetoes the crypto mining bill.

• The SEC of Thailand fined a Bitkub executive over $200K for insider trading.

Watcher.Guru @WatcherGuru

JUST IN: 🇮🇷 Iran approves the use of #Bitcoin and #cryptocurrency for imports and trading goods.

• Iran’s decision to use crypto for imports reportedly inspired Russia’s prime minister to consider a similar move.

• Is the UAE as crypto-friendly as it seems?

• Crypto lender Hodlnaut was granted judicial management by a Singaporean court.

• The Taliban reportedly shuts 16 crypto exchanges operating in Afghanistan, arresting staff.

• Argentinia’s Mendoza province allows residents to pay taxes in stablecoins.

• India’s Enforcement Director raided the offices of Coinswitch Kuber, accusing the crypto company of violating forex laws.

CoinDesk @CoinDesk

The Dutch authorities have stated there may be additional arrests in the @TornadoCash case. "They're particularly interested in ... people who are [a] member of the DAOs" that develop the protocol, @jackschickler explains. Listen: trib.al/mfP0QV4

• The US SEC delayed its decision on Vaneck‘s bitcoin ETF application by an extra 45 days.

• OptiFi accidentially cut the life of its DEX short after an upgrade gone wrong locks over 600K worth of USDC stablecoins on the mainnet.

• Bloomberg talked to Sarah Green and Matthew Kimber of the Law Commission of England & Wales on labelling crypto a “separate category in English property law, a move that could pave the way for setting an international standard.”

• Can you write off your losses from crypto lender Celsius on your (US) taxes? LexDAO investigates.

Blockworks @Blockworks_

Two sisters in Melbourne used $10 million they accidentally received from @cryptocom to buy a luxurious mansion A judge ruled they must now sell it and return the funds. Via @shaliniX0

blockworks.coCrypto.com Sues User After Refunding $10M Instead of $100Crypto.com reportedly didn’t realise it had sent $10 million to one of its users by mistake for seven months. They bought a mansion.

• The chairman of a US congressional committee asked four US agencies and five crypto exchanges, including Coinbase, Binance and FTX, how they combat fraud and scams.

• Australia’s digital asset research program officially kicked off this week.

• El Salvador’s bitcoin bond stalls amid legislative hurdles and cooling investor interest.

• Want to read more crypto legal news? Check out the latest edition of Around the Blockchain:

  Edition No. 17

Thanks for reading!