Asia Express – Cointelegraph Magazine
Our weekly roundup of news from East Asia curates the industry’s most important developments.
Chinese crypto billionaire sued by SEC
On March 22, the US Securities and Exchange Commission, or SEC, announced charges against Chinese blockchain personality and billionaire Sun Yuchen – better known as Justin Sun – and three of his wholly-owned companies Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. ( formerly known as BitTorrent).
The complaint alleges that Sun and his companies “fraudulently” manipulated the secondary market for Tron (TRX) tokens through “extensive wash trading”, citing more than 600,000 such trades, and paid celebrities to promote TRX and BitTorrent (BTT) tokens with zero disclosure.
Several prominent American celebrities, such as Lindsay Lohan and Jake Paul, were named as defendants in their alleged roles in promoting TRX and BTT without proper disclosure. Some have since settled with the SEC. In addition, the SEC claims that bounty programs and airdrops used to promote TRX and BTT were unregistered investments. Gary Gensler, Chairman of the SEC, commented:
“As alleged, Sun and his companies not only targeted American investors in their unregistered offers and sales, generating millions in illegal income at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading. i TRX.”
Justin Sun is an active figure in the crypto industry who rose to prominence via Tron’s $70 million initial coin offering (ICO) in 2017. The ICO was reportedly conducted a day before the Chinese government’s announcement of a blanket ban on all ICOs within the country. Sun, who reportedly left Beijing shortly after and moved to San Francisco, used his newfound fortune from the successful Tron ICO to acquire peer-to-peer download platform BitTorrent.
Sun reportedly laid low while in the US and presented himself as an honest businessman fleeing the specter of communism. US authorities have heard this kind of rhetoric before, and on March 15 the US Department of Justice announced that it had arrested Chinese billionaire Guo Wengui for his role in an alleged $1 billion stock and crypto fraud scheme. Just days before his arrest, Guo revealed to viewers the importance of the crypto exchange, blockchain technology and tokens he had created in the fight against communism.
Interest from US authorities may have been behind Sun’s decision to move out of the US in 2020 to the sunny Caribbean island of Grenada. He has since become the country’s ambassador to the World Trade Organization. Aside from foreign relations and the granting of the fancy title of “His Excellency,” the role grants Sun a diplomatic passport that theoretically confers immunity from prosecution.
Despite the controversies, Sun seems to be doing quite well in his new home. Last November, Sun reportedly bought 100% of the co-founders’ stake in cryptocurrency exchange Huobi Global, although he publicly claims he is only a humble “advisor” in Huobi’s day-to-day affairs.
In January, Asia Express reported that the benefits of many Huobi employees were allegedly removed via direct orders from Sun. Elsewhere, cryptocurrency exchange Binance has also significantly limited its use of Tron Tether (TRC-20 USDT) following regulatory backlash on its own stablecoin Binance USD.
Make Kwon’s bad bet at Casino Royale
If Do Kwon has something in common with James Bond in the 2006 hit film Casino Royale, it’s that both found (or currently find) their stay in the beautiful coastal nation of Montenegro deeply uncomfortable. March 23, Filip Adzic, Minister of the Interior of Montenegro, announced that a South Korean national suspected of being the wanted fugitive Terraform Labs co-founder Do Kwon had been arrested at Podgorica airport due to forged documents.
Shortly after the announcement, South Korean authorities confirmed that the detainee is indeed Do Kwon based on a positive match between name, date of birth, nationality and photographic evidence. Police say they are awaiting a fingerprint check from Montenegrin authorities to definitively identify the arrested person.
Do Kwon is currently wanted by Interpol, as well as South Korean, Singaporean and US authorities, for his role in the collapse of the $40 billion Terra Luna ecosystem in May 2022. Last October, South Korean prosecutors reportedly revoked Kwon’s passport. was hiding in Serbia at the time.
Serbia shares borders with Montenegro, a Balkan country that gained independence in 2006 and as a result has signed few extradition treaties with other nations. However, an extradition agreement only facilitates the process and is not a requirement for extradition to take place. Interestingly, South Korea does not have an embassy in Montenegro, and vice versa.
Kwon had not been seen since late 2022 prior to the news of his reported arrest. If anything, the blockchain boss has proven to be a bit of a weak gambler. Aside from what appears to be a failed attempt to avoid arrest and attempts to double the Terra Luna (LUNC) ecosystem, Kwon recently, and ultimately, lost an $11 million bet that the price of LUNC will be over $90 per token by mid-March 2023. LUNC’s price is $0.0001259 at time of publication.
Maplestory is moving into GameFi
On a happier note, South Korean gaming giant Nexon announced on March 22 that it had chosen Ethereum tier-two scaling solution Polygon (MATIC) to power the blockchain ecosystem for multiplayer 2-D fantasy role-playing game Maplestory.
According to Nexon, a Polygon supernet, created by Polygon Labs, will be deployed in Maplestory to allow players to earn and collect in-game items as non-fungible tokens. Ryan Wyatt, president of Polygon Labs said:
“Nexon choosing Polygon Supernets to power its worldwide hit MapleStory Universe sends a strong message to the entire gaming industry about the future of blockchain gaming.”
In January, Wyatt announced that he was stepping down as head of gaming at YouTube and joining Polygon Studios as its new CEO.
Established in 2003, MapleStory enjoys immense popularity in the Asia-Pacific region and has surpassed 180 million registered players. In-game items are currently purchased with Nexon’s currency NX. The company reported $2.6 billion in revenue by 2022 and has developed over 50 games since its inception.
