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Singapore Will Be Eyeing Locally Registered Crypto Firms

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After the Terra blockchain was halted for nine hours, restarted and then halted again, LUNA and UST were de-list from most exchanges with the market seeming to reject a recovery plan.

The question is how will token holders be made whole? 

There is no formal headquarters for Terraform Labs, the Singapore-registered company behind the Terra protocol

The Luna Foundation Guard is the only asset the company has. This organization, also registered in Singapore and overseen by Do Kwon, manages the wallets used to support the UST peg during times of extreme volatility. Overall, these wallets are now empty, with the only thing of value remaining being the approximately $69 million in avalanche token (AVAX).

Singapore’s regulators are aware of the trend of crypto companies using a Singaporean entity to conduct business overseas without material ties to the country. In April, Singapore Parliament enacted a  law requires domestically registered crypto companies that do business abroad to be licensed primarily for anti-money laundering reasons.

Terra’s LUNA token had a market cap of $33 billion in the year beginning. Its UST stablecoin had a market capitalization of $10 billion. Now, both have a virtual value of $0.

What kind of assets could be seized from the companies behind the protocol, should token holders bring a legal case against them. Is Do Kwon and co-founder Daniel Shin subjected to Singapore government jurisdiction? 

Terraform Labs and Do Kwon asserted that American regulators don’t have jurisdiction over Kwon, a Korean residing in Singapore with its lawsuit against the Securities and Exchange Commission (SEC). They claimed that they have no ties to the U.S., so how can they be targeted by regulators? They might however find themselves dealing with Singapore’s justice system, and while the country’s court is known to be strict and has a favorable securities framework compared to the U.S.

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  • Source: https://cryptoverze.com/singapore-will-be-eyeing-locally-registered-crypto-firms/

This Post was originally published on Cryptoverze

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