Nigeria lifts crypto ban, Do Kwon’s extradition canceled, 3AC assets frozen | Weekly Recap

In today’s weekly recap, the focus is on the proliferation of global regulatory efforts, with Nigeria finally lifting its ban on cryptocurrency transactions. Post-implosion developments surfaced, involving Do Kwon, 3AC and Sam Bankman-Fried. 

Do Kwon extradition overturned

• Recall that the Podgorica High Court approved the extradition of Terra founder Do Kwon to either South Korea or the United States. Subsequent reports suggested that the U.S. might be the favorite to receive the former fugitive.

• While both countries vied to secure custody of Do Kwon, reports from this week confirmed that the Montenegro Court of Appeal had overturned the earlier extradition approval. The court cited violations of criminal procedures.

Court freezes assets belonging to 3AC

• Hedge fund Three Arrows Capital (3AC) saw a court in the British Virgin Islands freeze over $1 billion in assets belonging to the imploded hedge fund.

• As a result of this asset freeze, executives at 3AC — including Su Zhu and Kyle Davies — the fund’s co-founders, would not be able to legally transfer the assets, totaling $1.14 billion, or sell them off. Recall that the fund owes its creditors $3.3 billion.

Bankman-Fried tries to delay sentencing

• Judge Lewis Kaplan, Senior Judge of the SDNY District Court, denied Sam Bankman-Fried’s request to delay a sentencing hearing by four to six weeks.

• Bankman-Fried, the founder and former CEO of FTX, was found guilty of all charges in November. His sentencing hearing is scheduled for March 31, 2024.

• FTX’s new management is making plans to end the company’s bankruptcy case on good grounds. This week, they amended the plan to calculate the worth of their crypto assets at their values when FTX collapsed.

US SEC makes headlines

• This week, the U.S. Securities and Exchange Commission (SEC) also took the spotlight for its regulatory and enforcement actions. The regulatory agency made a deal with legal representatives of Terraform Labs to maintain the confidentiality of certain documents, as the trial of Do Kwon approached.

• In addition, the securities regulator was reported to have met with the asset managers looking to launch spot BTC ETFs on Dec. 21. The meeting featured discussions about the potential products, with the SEC requesting that the firms modify their products to make for cash-based redemptions.

• The crypto community leveraged an opportunity to intensify its criticism of the SEC’s shortcomings this week following a report involving the agency’s case with crypto project DEBT Box. An SEC director issued an apology after the court found that it lied in its request for a restraining order on the project.

• Meanwhile, crypto-friendly SEC Commissioner Hester Peirce expressed displeasure at the agency’s move to fine BarnBridge DAO, a DeFi entity, to the tune of $1.7 million. Peirce noted that she voted against the idea, attributing it to an “imprecise legal reasoning.”

Nigeria lifts ban on cryptocurrencies

• Nigeria, the most populous African country, is now having a more favorable outlook on cryptocurrencies. The country lifted its two-year ban on crypto transactions this week. 

• The Central Bank of Nigeria imposed an implicit ban on these transactions in February 2021, mandating banks to close accounts involving crypto fund movements. The relaxation of the ban comes a few months after the Central Bank welcomed a new governor.