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Our weekly roundup of news from Asia curates the industry’s most important developments.
South Korean metaverses are closing amid scandals and disinterest
South Korea’s tech-savvy population, blazing-fast internet, and deep-rooted gaming culture made it the ideal testbed for metaverse applications. Despite these advantages, some of the country’s top metaverse platforms are now closing their doors.
The latest casualty is 2nd Block, a metaverse built by Dunamu, the operator of South Korea’s largest cryptocurrency exchange Upbit.
Dunamu announced that it will be shutting down its metaverse services on Sept. 9 due to weak engagement since the pandemic began to wane.
This comes on the heels of a similar move by Seoul’s metropolitan government. Last month, the city said its metaverse project, which cost $4.5 million to build, will be locking its virtual doors on Oct. 16. The digital version of Seoul, designed to offer residents and tourists a digital space to interact and explore, lasted less than two years.
Even the surviving metaverses are battling their issues.
Zepeto, a metaverse developed by South Korean internet giant Naver, has managed to thrive by shifting its focus to the global market. As of last year, it had 20 million monthly visitors from overseas and just 1.2 million local users, according to data analytics firm Sensor Tower.
At home, the platform has come under fire after several parents reported that their children’s avatars were sexually harassed by other users.
In severe cases, predators reportedly coerced minors into sharing explicit images in exchange for in-game items.
In response to these incidents, South Korean lawmakers proposed amendments to existing laws to prison times and fines on virtual sex offenders.
However, the draft bill ultimately failed to pass the National Assembly, leaving the issue unresolved.
Most complaints are left unsolved due to difficulties in tracking predators in digital spaces that span across international borders.
3AC liquidators sue Terra for $1.3 Billion over Terra collapse
Liquidators of the defunct Singapore crypto hedge fund Three Arrows Capital (3AC) have filed a $1.3 billion lawsuit against Terraform Labs.
In their court filing, 3AC liquidators Russell Crumpler and Christopher Farmer of Teneo Holding allege that Terraform Labs misled 3AC about the stability of its algorithmic stablecoin TerraUSD (UST) and its sister token LUNA, prompting the hedge fund to make substantial bets on the assets.
The liquidators are seeking damages not only for the direct purchases of UST and LUNA but also for the subsequent losses to 3AC’s crypto investments caused by Terra’s collapse.
The turmoil for 3AC began in May 2022, when Terra’s UST lost its peg to the greenback, leading to a $40 billion loss for the Terra ecosystem.
Despite alleged assurances from Terra’s co-founder Kwon Do-Hyung (better known as Do Kwon), the stablecoin’s failure triggered a chain reaction in the crypto market, ultimately leading 3AC to file for bankruptcy in July 2022.
The hedge fund, which once managed up to $18 billion in assets, argued that the Terra collapse caused irreversible financial damage.
Terraform Labs filed for bankruptcy in January. In June, the company agreed to a $4.47 billion settlement to resolve an SEC civil suit.
Meanwhile, Kwon was found guilty of defrauding investors by a US jury in April and remains in Montenegro, awaiting extradition decisions. Last week, his extradition to South Korea was delayed by the Montenegrin Supreme Court.
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Malaysian Police manhunt after crypto kidnappings
Malaysian police are searching for four individuals suspected of involvement in the kidnapping of a Chinese man and a Malaysian woman. The victims were abducted on July 11 and released four days later, on July 15, after a ransom was paid in cryptocurrency, according to state-backed news agency Bernama.
The four wanted suspects are part of a group of 18 implicated in the crime. Earlier in August, police killed four suspects in a shootout, and 10 others have been arrested. Among those involved was a man who worked as the male victim’s chauffeur.
The ransom, amounting to $1.2 million in cryptocurrency, was reportedly divided among the suspects following the release of the victims.
On Aug. 15, six of the arrested suspects pleaded not guilty to charges under Malaysia’s Kidnapping Act. If convicted, they could face up to 40 years in prison and caning, a form of corporal punishment involving whipping.
In the course of the investigation, police confiscated 1.65 million Malaysian ringgit ($372,500) in cash and other assets, including vehicles worth approximately $700,000.
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SBI’s everlasting love for Ripple
SBI Holdings, the parent company of Japan’s largest online brokerage SBI Securities, has announced a strategic partnership with Ripple Labs aimed at expanding the use of non-fungible tokens (NFTs) on the XRP Ledger (XRPL).
The partnership will see subsidiary SBI Digital Community educating its Bto3 community members on how to buy and trade digital assets on xrp.cafe, an NFT marketplace on XRPL.
SBI’s relationship with Ripple and XRPL is not new.
The company’s remittance arm, SBI Remit, has been using XRP for cross-border transactions since 2017, making it one of the earliest adopters of the Ripple-backed technology.
In April, SBI became the first Japanese corporation to use XRPL supply chain services.
Over in the US, Ripple’s years-long legal battle against the Securities and Exchange Commission is winding up.
In an Aug. 7 filing, Ripple was ordered by US Judge Analisa Torres to pay a $125 million civil penalty and permanently enjoined the company from violating securities laws. The penalty is much, much lower than the $2 billion sought by the SEC.
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Yohan Yun
Yohan Yun is a multimedia journalist covering blockchain since 2017. He has contributed to crypto media outlet Forkast as an editor and has covered Asian tech stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking, and experimenting with new recipes.
