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Token2049 captivates Singapore, Huobi rebrands on 10th Anniversary: Asia Express

The 3AC saga continues, Token 2049 kicks off in Singapore and CoffeeDAO gives mom-and-pop cafes a leg up on Starbucks.
Our weekly roundup…



The 3AC saga continues, Token 2049 kicks off in Singapore and CoffeeDAO gives mom-and-pop cafes a leg up on Starbucks.

Our weekly roundup of news from East Asia curates the industrys most important developments.

Token 2049, one of the largest crypto conferences of the year, attracted a record 10,000 attendees, 300 speakers and 5,000 companies during the two-day event in Singapore.

From Sept. 1314, attendees entering the majestic Marina Bay Sands Convention Expo and Center were greeted by the energetic beats from the Polyhedra DJ, then to a hall of booths showcasing the latest innovation in the blockchain industry. Aside from the main show, over 400 side events took place this year.

Among the biggest announcements during the event, KXVC, a subsidiary of Kasikornbank, the largest bank in Thailand with 20 million customers, launched a $100 million fund dedicated to Web3, AI and deep tech firms based in Southeast Asia. KXVC wrote:

“For Web3, KXVC targets Web3 infrastructures, nodes validators, RPC providers, middlewares, modularity technologies, privacy, ZKP, wallets, alternative L1/L2s, shared securities, LsdFi and consumerization of NFTs.”

As for AI, the firm said it would prioritize investing in “consumer-focused AI, cybersecurity, AI/ML tools (e.g., deployment platforms, data annotation, model optimization), and problem-specific AI startups.”

The fund will be led by Krating Poonpol group chairman of Kasikorn Business Technology Group, and Jom Vimolnoht, managing director of KXVC. According to KXVC, Poonpol has over 100 investments, four unicorns, and 10 exits across five funds as a venture capitalist. Meanwhile, Vimolnoht has managed $400 million in startup investments and has backed 35 startups in the region.

Token2049 Main Event in Singapore (Cointelegraph)

On Sept. 15, Ethereum layer-two scaling solution Mantle Network,launcheda $200 million development fund for ecosystem acceleration. Among the first recipients are LiquidX, an application layer-focused venture studio building Web3 companies; Valent, a decentralized money market exploring liquid staking derivatives finance (LSDFi); and Range Protocol, an all-in-one on-chain asset management platform and ecosystem.

Previously known as BitDAO, the Mantle Network has been a maverick in reinvigorating blockchain communities, with the launch of a $500 million blockchain gaming fund in November 2021.

In May 2023, BitDAO (BIT) passed a “One brand, One token” unity governance proposal rebranding the network to Mantle with 235 million BIT tokens voting yes and 988 BIT voting no.

Token2049’s OKX Main Stage (Cointelegraph)

CoffeeDAO tokenizes marketing potential of cafes

A new decentralized autonomous organization, dubbed CoffeeDAO, is partnering with cafes around the world to unravel their market potential in exchange for free coffee.

In a live demonstration at Chye Seng Huat Hardware coffee store in Singapore, Cheney Cheng, co-founder of CoffeeDAO, showed Cointelegraph how to receive up to four free coffees at the store with a simple scan of a bar code, yielding four COFFEE tokens minted on Polygon, which could then be directly exchanged for coffee. Not only do customers receive airdrop tokens per visit, but the “loyalty points” can then be spent at other cafes.

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According to Cheney, the concept is all about the neighborhood, which would allow community-based mom-and-pop stores to compete with the likes of Starbucks and McDonald’s. Customers aside, a referral program exists where individuals can receive up to 200 COFFEE tokens (200 cups of espresso) for onboarding cafes to the program. So far, over 15 cafes have partnered with CoffeeDAO throughout Singapore and Hong Kong.

CoffeeDAO at the Chye Seng Huat Hardware coffee store in Singapore (Cointelegraph)

Huobi Global changes name to… HTX? 

Cryptocurrency exchange Huobi Global is changing its name to a word where “H” represents the first letter of Huobi, “T” represents Justin Sun’s blockchain project Tron, and “X” represents the exchange’s 10th anniversary; the new name also happens to be eerily similar to the now bankrupt crypto exchange FTX.

According to the Sept. 13announcement, the rebranding coincides with the exchange’s goals in its new era to further “global expansion, thriving ecosystem, wealth effect and security and compliance.”

Justin Sun, de facto owner of HTX, said during a Token2049 press conference that the new name is also designed for non-Chinese users of the exchange, citing the difficulty of pronouncing “Huobi” for foreigners.

HTX has been in turmoil since the beginning of the year, shortly after Sun acquired the exchange and reportedly crushed an employee revolt. Despite touting stellar revenue and profit figures, Edward Chen, managing director of HTX Ventures, revealed that the exchange had cut its staff count down to 900 from 2,500 at the beginning of the year. Last month, the exchange denied it was close to insolvency and that Chinese police had arrested its senior executives. 

Justice’s late arrival for 3AC

It seems that some mild justice has finally arrived for Zhu Su and Kyle Davies, both co-founders of Singaporean crypto hedge fund Three Arrows Capital (3AC), who blew up the $3.5 billion firm in 2022 and then embarked on a game of catch-me-if-you-can with creditors.

In a September 14 statement, the Monetary Authority of Singapore (MAS) reprimanded both Zhu and Davies, barring the two from enterprise activities in the city-state’s regulated capital markets for nine years. As told by the MAS, the misconduct includes:

“(i) Providing false information to MAS [on 3AC]; (ii) failing to notify MAS about changes to Mr Zhu’s and Mr Davies’ directorship and shareholdings; and (iii) exceeding the assets under management threshold allowed for a registered fund management company.”

More than a year later, 3AC’s bankruptcy is still ongoing, and no criminal complaints have been filed against either Davies or Zhu in any jurisdiction. Last month, an embarrassing mistake that assumed Davies was a U.S. instead of a Singaporean citizen invalidated Davies’ court service in U.S. bankruptcy courts, which have cost over $30 million to date. Both Davies and Zhu have now been served in Singaporean courts.

3AC co-founders Kyle Davies (first from left) and Zhu Su (second from left) (Twitter)

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SEC initiates legal action against FTX’s auditor

The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor…



The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor independence.

The United States Securities and Exchange Commission (SEC) has commenced legal proceedings against an accounting firm that had provided services to cryptocurrency exchange FTX before its bankruptcy declaration.

According to a Sept. 29 statement, the SEC alleged that accounting firm Prager Metis provided auditing services to its clients without maintaining the necessary independence as it continued to offer accounting services. This practice is prohibited under the auditor independence framework.

Extract from the SEC's September 29 statement. Source: SEC

To prevent conflicts of interest, accounting and audit tasks must be kept clearly separate. However, the SEC claims that these entwined activities spanned over a period of approximately three years:

“As alleged in our complaint, over a period of nearly three years, Prager’s audits, reviews, and exams fell short of these fundamental principles. Our complaint is an important reminder that auditor independence is crucial to investor protection.”

While the statement doesn't explicitly mention FTX or any other clients, it does emphasize that there were allegedly "hundreds" of auditor independence violations throughout the three-year period.

Furthermore, a previous court filing pointed out that the FTX Group engaged Metis to audit FTX US and FTX at some point in 2021. Subsequently, FTX declared bankruptcy in November 2022. 

The filing alleged that since former FTX CEO Sam Bankman-Fried publicly announced previous FTX audit results, Metis should have recognized that its work would be used by FTX to bolster public trust.

Related: FTX founder’s plea for temporary release should be denied, prosecution says

Concerns were previously reported about the material presented in FTX audit reports.

On Jan. 25, current FTX CEO John J. Ray III told a bankruptcy court that he had “substantial concerns as to the information presented in these audited financial statements.”

Furthermore, Senators Elizabeth Warren and Ron Wyden raised concerns about Prager Metis' impartiality. They argued that it functioned as an advocate for the crypto industry.

Meanwhile, a law firm that provided services to FTX has come under scrutiny in recent times.

In a Sept. 21 court filing, plaintiffs allege that U.S. based law firm, Fenwick & West, should be held partially liable for FTX's collapse because it reportedly exceeded the norm when it came to its service offerings to the exchange.

However, Fenwick & West asserts that it cannot be held accountable for a client's misconduct as long as its actions remain within the bounds of the client's representation.

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DOJ readies witnesses in Bankman-Fried trial, highlights FTX asset management

The DOJ intends to highlight the experiences of retail and institutional clients who entrusted substantial assets to FTX.
The Department…



The DOJ intends to highlight the experiences of retail and institutional clients who entrusted substantial assets to FTX.

The Department of Justice (DOJ) has confirmed its intention to summon former FTX clients, investors and staff as witnesses in the upcoming trial involving Sam Bankman-Fried, the former FTX CEO.

The DOJ submitted a letter motion in limine on Sept. 30 describing the witnesses it intends to call concerning FTX’s treatment of customer assets.

The testimonies intend to provide perspectives on the interactions between the accused and the witnesses. It also aims to get the witnesses’ understanding of Bankman-Fried’s remarks and conduct, particularly regarding FTX’s asset management. The DOJ intends to highlight the experiences of retail and institutional clients who entrusted substantial assets to FTX, believing that the platform would safeguard them securely.

Court filing in the United States District Court for the Southern District of New York. Source: CourtListener

Furthermore, a situation has emerged concerning one of the DOJ’s witnesses, “FTX Customer-1,” who resides in Ukraine. Given the ongoing conflict in Ukraine, traveling to the U.S. to provide testimony is associated with difficulties. The DOJ has suggested using video conferencing as a viable alternative. However, Bankman-Fried’s defense has not yet approved this proposal.

Nonetheless, the legal team representing Bankman-Fried, led by lawyer Mark Cohen, has voiced concerns about the jury questions put forth by the DOJ. According to Bankman-Fried’s defense, these interrogations insinuate guilt on Bankman-Fried’s part, potentially undermining the principle of “innocent until proven guilty.“

Additionally, the defense contends that these inquiries may not effectively uncover the jurors’ inherent biases, especially related to their encounters with cryptocurrencies. Moreover, specific questions could inadvertently guide the jury’s perspective instead of eliciting authentic insights, possibly compromising the trial’s impartiality.

Related: Sam Bankman-Fried’s lawyer challenges US gov’t proposed jury questions

With the jury selection scheduled to start on Oct. 3, closely followed by the trial, the spotlight is firmly on this high-stakes legal confrontation. This case underscores not only its immediate consequences but also underscores the vital importance of transparent communication and unbiased questioning in upholding the principles of justice.

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Vitalik Buterin voices concerns over DAOs approving ETH staking pool operators

The Ethereum co-founder proposes a solution that could lower the likelihood of any individual liquid staking provider growing to a point where it poses…



The Ethereum co-founder proposes a solution that could lower the likelihood of any individual liquid staking provider growing to a point where it poses a systemic risk.

Vitalik Buterin, the co-founder of Ethereum, has expressed worries regarding decentralized autonomous organizations (DAOs) exerting a monopoly over the selection of node operators in liquidity staking pools.

In a September 30 blog post, Buterin issues a warning that as staking pools adopt the DAO approach for governance over node operators—who are ultimately responsible for the pool's funds—it can expose them to potential risks from malicious actors.

“With the DAO approach, if a single such staking token dominates, that leads to a single, potentially attackable governance gadget controlling a very large portion of all Ethereum validators.”

Buterin highlights the liquid staking provider Lido (LDO) as an example with a DAO that validates node operators. However, he emphasizes that relying on just one layer of protection may prove insufficient:

“To the credit of protocols like Lido, they have implemented safeguards against this, but one layer of defense may not be enough,” he noted.

ETH staked by category chart. Source: Vitalik Buterin

Meanwhile, he explains that Rocket Pool offers the opportunity for anyone to become a node operator by placing an 8 Ether (ETH) deposit, which, at the time of this publication, is equivalent to approximately $13,406.

However, he notes this comes with its risks. "The Rocket Pool approach allows attackers to 51% attack the network, and force users to pay most of the costs," he stated.

On the other hand, Buterin highlights that having a mechanism to ascertain who can act as the underlying node operators is an inevitable necessity:

"It can't be unrestricted, because then attackers would join and amplify their attacks with users' funds."

Related: Ethereum is about to get crushed by liquid staking tokens

Buterin further outlines that a possible approach to address this issue involves encouraging ecosystem participants to utilize a variety of liquid staking providers. 

He clarifies this would decrease the likelihood of any one provider becoming excessively large and posing a systemic risk.

“In the longer term, however, this is an unstable equilibrium, and there is peril in relying too much on moralistic pressure to solve problems," he stated.

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