The nightmare continues for Sam Bankman-Fried and FTX — Law Decoded, Nov. 14-21

The nightmare continues for Sam Bankman-Fried and FTX — Law Decoded, Nov. 14-21

As much as we wish this last week was about something else, it was still about FTX. The Bahamas Supreme Court has authorized two temporary liquidators from PricewaterhouseCoopers to oversee the assets of the country-based crypto exchange. A few days later, the Bahamas Securities Commission ordered the transfer of digital assets from FTX Digital Markets to a commission-owned digital wallet to “protect the interests of customers and creditors. Turkey’s Financial Crimes Investigative Agency is the latest agency to join the investigation into the collapse of FTX.

The regulator also monitored FTX’s activities by the country’s anti-money laundering (AML) laws. Meanwhile, authorities in the United States and the Bahamas are discussing the possibility of extraditing Sam Bankman-Fried, the company’s former CEO, back to the United States for questioning.

Given the possible extradition, the resignation of the law firm Paul Weiss from representing the entrepreneur’s interests does not seem very optimistic. The reason for the removal is SBF’s cryptic tweets, which its former attorney, Martin Flumenbaum, said were “relentless and disruptive” and negatively impacted FTX’s reorganization efforts. It would certainly be interesting to hear Bankman-Fried in Congress, and the invitation is already there: 

The United States House of Representatives Financial Services Committee has scheduled a December session. Hearing set to explore crypto exchange FTX collapse and “further implications for digital asset ecosystem.” The committee looks forward to hearing from the people and companies involved in the events, potentially involving not only SBF but also Binance CEO Changpeng Zhao.

NY Fed launches CBDC pilot program with major banks

The Innovation Center of the Federal Reserve Bank of New York is launching a 12-week proof-of-concept pilot for a central bank digital currency (CBDC). Banking giants such as BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Trust, U.Bank, and Wells Fargo will participate in the pilot program by issuing tokens and settling transactions through simulated central bank reserves. 

 Distributed ledger technology, as well as the simulation of tokens and research into regulatory frameworks.

Russian bill could legalize crypto mining

A new bill tabled in the Russian State Duma, the lower house of parliament, would legalize cryptocurrency mining and the sale of mined cryptocurrencies. Chairman of the Duma Committee on Financial Markets Anatoly Aksakov told the local press he was waiting for the law. Approve the three parliamentary readings in December, which will come into force in February. According to additional sources, the law would go into effect in January. A Russian cryptocurrency market will be established if the law is passed, giving Russian miners access to international markets. In the latter case, Russian currency controls and regulations would not apply to the transactions but would have to be reported to the Russian Tax Authority.

South Korea investigates crypto exchanges for listing native tokens

Korea’s financial authority, the Korea Financial Intelligence Unit (KoFIU), has launched an investigation into cryptocurrency exchanges related to listing their self-issued internal tokens. While Korean cryptocurrency exchanges are prohibited from issuing native tokens, KoFIU’s research aims to ensure compliance with investor safety regulations. Flat exchange is one of the prime suspects and is under investigation for listing its internal token FLAT in January 2020, local media Yonhap reported. Authorities have cleared large exchanges like Upbit and Bithumb, and investigations will focus more on smaller exchanges.

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