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Factbox: Singapore’s rise, and falter, as Asia cryptocurrency hub

Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 14, 2018. REUTERS/Dado Ruvic

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HONG KONG/SINGAPORE, July 12 (Reuters) – Singapore’s burgeoning cryptocurrency sector has been shaken by the recent collapse of Three Arrows Capital, a cryptocurrency hedge fund, and signs of tighter scrutiny by regulators at the Monetary Authority of Singapore. read more

Following are key facts about the rise of Singapore as an Asian cryptocurrency hub, and the fallout from the Three Arrows collapse.

HOW IMPORTANT IS SINGAPORE TO ASIA’S CRYPTO SECTOR?

Investment in Singapore’s crypto and blockchain companies surged to $1.48 billion in 2021, according to KPMG, ten times the previous year and nearly half the Asia Pacific total for 2021.

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PwC says 6% of the world’s crypto funds are based in Singapore, ranking it a joint third globally – along with Switzerland and Hong Kong – behind the U.S. and UK.

Singapore, one of Asia’s main investment banking and asset management centres alongside Hong Kong, is keen to establish a leading role in financial technology, including blockchain and crypto.

WHY HAS SINGAPORE ATTRACTED CRYPTO BUSINESS?

The scale and range of Singapore’s crypto companies and service providers attracted digital asset companies fleeing regulatory crackdowns elsewhere.

These include Huobi, a crypto exchange initially focused on China that now has a major presence in Singapore.

U.S. firms like crypto exchange Gemini have set up regional Asia headquarters in Singapore.

The citystate was also a forerunner in developing a licencing regime for crypto companies, which attracted many companies hoping the endorsement of a leading regulator would help them to win business.

Other industry leaders such as crypto exchange Coinbase (COIN.O) have applied for licences in Singapore.

DBS (DBSM.SI), Singapore’s largest bank, has launched its own crypto exchange.

WHY DID 3AC COLLAPSE?

Digital currencies have been on the backfoot for months, with Bitcoin losing roughly half its value since the start of May.

The sell-off was triggered by the collapse of stablecoin TerraUSD and its paired token Luna, resulting in large losses for holders such as 3AC. The company lost about $200 million of its investment in Luna, an executive told the Wall Street Journal last month, adding that the company was still trying to quantify its losses.

According to U.S. court filings, several of 3AC’s lenders have issued it notices of default.

WHAT IS SINGAPORE’S REGULATORY STANCE?

The Monetary Authority of Singapore’s statements have indicated a welcoming approach, encouraging crypto-related services.

At the same time, some companies say the authorities’ soothing rhetoric belies an occasionally harsh regulatory stance.

Only a handful of approvals have been granted so far among well over 100 applicants for new crypto payments licences.

Chia Hock Lai, co-chairman, Blockchain Association Singapore, said there were currently well over 200 crypto businesses in Singapore, but several had shut down or moved out after the licencing regime came in.

The most high-profile of these is Binance, the world’s largest crypto exchange, which left Singapore last year as it came under close scrutiny around the world. read more

Like regulators elsewhere, MAS has also indicated that it would take a tough stance on money laundering, consumer protection, and other risks that may be associated with the digital currency sector.

Tharman Shanmugaratnam, Senior Minister and chairman of the MAS, told parliament last week that the regulator was considering additional consumer safeguards for cryptocurrency trading, although he did not mention 3AC.

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Reporting by Alun John and Chen Lin; Editing by Edmund Klamann

Our Standards: The Thomson Reuters Trust Principles.


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Explainer: Can crypto holders recoup losses in court?

June 24 (Reuters) – A downturn in cryptocurrency prices and crash of one stablecoin has led some investors to try to recover their losses in U.S. court. Here is how cryptocurrency litigation has fared so far and the challenges investors may face.

WHO IS BEING SUED?

Companies that created cryptocurrencies, exchanges that facilitated their sale, and individuals who promoted them have all been sued.

Kyle Roche, who represents cryptocurrency holders in several lawsuits, said U.S. claims over cryptocurrency often involve alleged violations of federal securities or commodities laws, which prohibit fraud and manipulation and require products and operators to be registered with U.S. authorities.

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The latest lawsuit took aim at Terraform Labs, the company behind Terra USD, over the stablecoin’s recent collapse.

A crytocurrency investor sued the Seoul-based company and its Chief Executive Do Kwon on June 17, alleging they failed to register the company’s digital assets as securities and worked with several venture capital funds that backed Terra USD to defraud investors.

A Terraform Labs spokesperson called the claims meritless.

Tether, which is behind the world’s largest stablecoin, has been accused of rigging cryptocurrency markets in a lawsuit in New York. And Ripple, whose founders created the token XRP, has been hit with a lawsuit in California, claiming it sold unregistered securities.

Both lawsuits have survived motions to dismiss.

A spokesperson said Ripple disputes the allegations and will defend against them. Tether did not respond to a request for comment.

Cryptocurrency exchanges have been another target for investors seeking to recoup losses.

Binance U.S. was sued on June 13 by investors claiming it falsely marketed TerraUSD as a safe asset ahead of its collapse. And in March, investors accused Coinbase of selling 79 digital assets as unregistered securities. read more

Binance and Coinbase have denied the allegations.

Investors are also suing celebrities who have publicly touted cryptocurrency. A lawsuit filed in Los Angeles claims Reality TV star Kim Kardashian and boxing legend Floyd Mayweather Jr. engaged in a cryptocurrency pump and dump. Representatives for Kardashian and Mayweather did not respond to requests for comment. read more

LEGAL HURDLES

A wave of lawsuits brought in 2020 against exchanges alleging they fueled an illegal boom in digital coins largely failed after judges found some of the claims were filed too late or had too little connection to the United States.

Timing should not be an issue for newer lawsuits, but cryptocurrency holders seeking to sue overseas companies in U.S. court could still face hurdles.

Token holders won a default judgment in New York against Singapore-based exchange KuCoin, but dropped the case after a Singaporean court would not make the company provide information to enforce the judgment.

KuCoin did not respond to a request for comment.

Another potential hurdle for investors filing claims under securities or commodities laws will be showing their tokens meet the legal definition of those assets. Some courts have ruled that certain cryptocurrencies fit the bill, but the issue remains unsettled.

Cryptocurrency holders may face additional obstacles when going after exchanges. In the Coinbase lawsuit, the exchange has argued that it was not a party to the transactions, and that private litigants cannot enforce registration requirements.

HAVE ANY CRYPTO HOLDERS WON MONEY IN COURT?

While many cryptocurrency lawsuits are pending, the SEC has reclaimed some funds for investors in a handful of digital assets through settlements.

But even after a settlement, investors may face long waits and still end up with less than they shelled out.

Last year, blockchain company Block.one agreed to pay $27.5 million to settle token holders’ lawsuit alleging it had violated securities law.

More than 100 token holders filed claims worth more than $75.7 million, according to court filings. The settlement has not yet received final approval.

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Reporting by Jody Godoy;
Editing by Noeleen Walder and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.


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Bored Ape NFT company raises around $285 million of crypto in virtual land sale

A representation of cryptocurrency Ethereum is seen next to non-fungible tokens (NFTs) of Yuga Labs “Bored Ape Yacht Club” collection displayed on its website, in this illustration picture taken March 24, 2022. REUTERS/Florence Lo/Illustration/File Photo

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LONDON, May 1 (Reuters) – The company behind the “Bored Ape” series of NFTs has raised around $285 million worth of cryptocurrency by selling tokens which represent land in a virtual world game it says it is building.

Last year, U.S. start-up Yuga Labs created the Bored Ape Yacht Club NFTs, blockchain-based tokens representing a set of 10,000 computer-generated cartoon apes.

As non-fungible tokens (NFTs) – crypto assets that represent digital files such as images, video, or items in an online game – exploded in popularity, Bored Ape prices surged to fetch hundreds of thousands of dollars each. read more

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They became one of the most prominent NFT brands, with Apes sold at top auction houses and owned by celebrities including Paris Hilton and Madonna. read more

Now, Yuga Labs – which raised $450 million in March in a funding round led by Andreessen Horowitz – has set its sights on the so-called “metaverse”. read more

In an online sale on April 30, Yuga Labs sold NFTs called “Otherdeeds”, which it said could be exchanged as plots of virtual land in a future Bored Ape-themed online environment called “Otherside.”

The “Otherdeeds” could only be bought using the project’s associated cryptocurrency, called ApeCoin, which launched in March.

There were 55,000 Otherdeeds for sale, priced at 305 ApeCoin each, and the company wrote on Twitter that these had sold out.

This means the sale raked in 16,775,000 ApeCoin, worth around $285 million as of Sunday, according to Reuters calculations based on the price of ApeCoin on cryptocurrency exchange Coinbase at 1210 GMT.

It was not clear how the funds would be distributed, although the company said the ApeCoin would be “locked up” for one year.

The sale indicates the continued high demand for speculative, high-risk crypto assets related to online virtual worlds. NFTs are largely unregulated, and reports of scams, fakes and market manipulation are common. read more

While many are baffled by the idea of paying real money for land which does not physically exist, some virtual land NFTs have already fetched millions of dollars. read more

The Otherside metaverse will be a multi-player gaming environment, according to its website, which says it is currently under development.

Yuga Labs declined to say how many people were working on building Otherside or when it would be launched.

Yuga Labs’ Otherdeeds sale comes shortly after the Bored Ape Yacht Club official Instagram account was hacked and a phishing link posted, allowing scammers to steal victims’ NFTs.

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Reporting by Elizabeth Howcroft; Editing by Hugh Lawson

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Payments company Bolt to buy Wyre in cryptocurrency push

Bitcoin cryptocurrency representation is pictured on a keyboard in front of binary code in this illustration taken September 24, 2021. REUTERS/Dado Ruvic/Illustration

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April 7 (Reuters) – Online checkout company Bolt Financial Inc said on Thursday it is buying cryptocurrency infrastructure provider Wyre Payments Inc in a bid to enable digital-currency payments on its platform.

The company did not disclose the terms of the deal, but a Wall Street Journal report earlier in the day said it was valued at $1.5 billion. (https://on.wsj.com/3xeWbhE)

San Francisco-based Bolt was last valued at $11 billion after a funding round in January. It provides online retailers and shoppers a checkout service for payments.

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The company, which counts apparel retailers Forever 21, Juicy Couture and Lucky Brand among its customers, expects to close the deal by the end of the year.

Founded in 2013, Wyre provides payments infrastructure for cryptocurrencies.

Since last year, the crypto market has seen a surge of investor interest with large venture investors, celebrities and blue-chip companies doubling down on crypto investments.

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Reporting by Niket Nishant in Bengaluru; Editing by Devika Syamnath

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Crypto exchange FTX US valued at $8 bln as first fundraise draws SoftBank, Temasek

A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken October 19, 2021. REUTERS/Edgar Su

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Jan 26 (Reuters) – Cryptocurrency exchange FTX US said on Wednesday it had notched a valuation of $8 billion after raising $400 million in its first funding round from investors including Japan’s SoftBank Group Corp (9984.T) and Singapore’s Temasek Holdings (TEM.UL).

The Series A funding also includes investments from crypto investment firm Paradigm and Multicoin Capital.

“What this raise means to us is that we are officially establishing ourselves on the stage of the largest competitors of cryptocurrency exchanges in the U.S., and signaling to the world that we are going to continue to expand very rapidly,” FTX US President Brett Harrison said.

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With the value of cryptocurrencies surging, surpassing $3 trillion in November, venture capital investors are increasingly looking to put down stakes in the industry.

Venture capital firms invested $30 billion in crypto in 2021, according to research firm PitchBook.

Chicago-based FTX US was launched in 2020 by former Wall Street high frequency trading executives, and competes with leading crypto exchanges Coinbase and Binance.

In October, FTX US acquired LedgerX in a move to expand into crypto futures and options trading.

FTX US had an average daily volume of about $360 million in the third quarter, according to the company. Its users increased by 52% quarter over quarter, though the company has declined to share how many users it has overall.

FTX US said it intends to use the funds to grow its user base and launch new business lines, and will also consider strategic investments and acquisitions.

It also plans to expand its 100-strong staff, said Harrison, who previously worked at Citadel Securities.

“By having this capital, we’re able to go out and be competitive and hire the best people,” he said.

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Reporting by Hannah Lang in Washington; Editing by Himani Sarkar

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