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The court has also ordered the confiscation of two Costa Rican passports, two Belgian passports and two identity cards belonging to Kwon and fellow Terra executive Han Chang-Joon.

U.K.’s Financial Conduct Authority said Binance’s local unit is no longer authorized to provide any regulated services in the country.

Do Kwon has been found guilty by a court in Montenegro of using a fake Costa Rican passport in an attempt to leave the country in March.

The former co-founder and CEO of Terra Labs was sentenced to four months in jail, according to a court statement.

Do Kwon pleaded not guilty on Friday, according to local media reports. He was already being held in custody in Montenegro for six months while the courts are considering an extradition request from South Korea. 

This is a developing story.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Episode 58 of Season 5 of The Scoop was recorded with The Block’s Frank Chaparro and Associate Professor of Law at George Mason Law School and former Advisory Committee Member to the U.S. Securities and Exchange Commission J.W. Verret.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher, or wherever you listen to podcasts. Please send feedback and revision requests to podcast@theblock.co.

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Professor J.W. Verret teaches corporate and securities law and financial accounting at George Mason Law School.

From May 2018 to March 2022, Professor Verret served as an Advisory Committee Member to the U.S. Securities and Exchange Commission where he represented the interests of investors in making recommendations to SEC Chair Gensler and other Commissioners.

In part one of this two part interview, Verret explains how a principle of administrative law in the United States known as the ‘major questions doctrine’ could challenge the SEC’s use of the Howey Test to determine if an asset is a security under federal law.

According to Verret, the major questions doctrine is a way for the court to check the power of independent agencies:

“If Congress has not given you specific authority to regulate a thing as an agency and you’re seeking to regulate it, if it involves a major question of national, economic or political importance, then you need to get authorization from Congress before you do anything.”

The major questions doctrine will likely not be discussed until the SEC’s lawsuits against Coinbase and Binance.US reach the appellate courts, says Verret, “but it’s one of the things that looms over these cases, without a doubt.”

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About CleanSpark

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© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

BNB Chain, a blockchain ecosystem powered by Binance’s BNB token, has launched a Layer 2 network called opBNB on testnet.

opBNB is an Ethereum Virtual Machine (EVM)-compatible scaling network that’s based on Optimism’s OP Stack and uses optimistic rollups, BNB Chain said Monday. Its purpose is to help increase transaction speed and reduce fees.

The current speed of its Layer 1 network BNB Smart Chain is about 2,000 transactions per speed, and the average cost per transaction is around $0.109, Arnaud Bauer, senior solution architect at BNB Chain, told The Block in an exclusive interview. opBNB, however, will support over 4,000 transactions per second and cost less than $0.005 per transaction on average, Bauer said.

BNB Smart Chain is part of the BNB Chain ecosystem, along with BNB Beacon Chain (the staking and governance layer of the BNB Chain ecosystem), BNB Greenfield (a decentralized data storage system) and zkBNB (a Layer 2 network based on zero knowledge or zk rollup technique). zkBNB is also currently in testnet form, having launched last September.

The mainnet of opBNB is expected to launch in the third quarter of this year.

EVM-compatible opBNB

When asked why BNB Chain was launching another Layer 2 network, Bauer said zkBNB is not EVM-compatible, but opBNB is, which will help the ecosystem grow further. EVM compatibility refers to the ability of a blockchain to support and interact with applications developed for blockchains that are compatible with the Ethereum computing environment.

The EVM compatibility is significant because it allows developers to easily port their existing Ethereum-based applications to other compatible platforms, enhancing interoperability and expanding the reach of decentralized applications, Bauer said.

With both zkBNB and opBNB now in place, Bauer sees BNB Chain directly competing with the Ethereum Layer 2 ecosystem that includes projects such as Arbitrum and Optimism. Even though opBNB is based on Optimism itself, Bauer said it offers a higher gas limit or block space of up to 100 million versus 30 million for Optimism. A higher gas limit indicates a larger capacity for computational work within a block, allowing for increased scalability and the processing of more transactions on the blockchain.

BNB Chain vs. Ethereum 

The BNB Chain ecosystem is still tiny compared to the Ethereum ecosystem. The total value locked or TVL in Ethereum-based applications is over $24 billion, and the TVL of BNB Chain-based projects is over $3 billion, according to DefiLlama data. Bauer said BNB Chain is “trying to push heavily on the innovation part” to bring more user-friendly applications into the ecosystem and grow its TVL.

The BNB token was recently deemed a security by the United States Securities and Exchange Commission (SEC) when it sued Binance, Binance.US, and their owner Changpeng Zhao on June 5. Bauer declined to comment on the lawsuit’s implications on the BNB Chain ecosystem, saying the project is focused on continuing building.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The international organization wants to help cut the cost of cross-border transactions, without abandoning compliance checks or capital controls.

Developers expect the opBNB blockchain to reach speeds of 4,000 transactions per second at a targeted cost of 0.005 U.S. cents per transaction.

The Aave community has rejected a proposal from Gauntlet designed to address the risk arising from a substantial loan acquired by Curve founder Michael Egorov.

On June 18, the community passed a vote unanimously, with every single vote opposing the proposal, firmly establishing its stance.

Last week, Gauntlet, a DeFi risk management project, had proposed freezing CRV tokens on Aave v2 and reducing the loan-to-value ratio for CRV to zero.

This recommendation came in the wake of a large CRV loan linked to Egorov, who has borrowed approximately $60 million in USDT, providing a collateral of 285 million CRV tokens, valued around $176 million. This substantial loan drew attention due to the size of the collateral, which represents over 30% of the total circulating supply of CRV.

Gauntlet argued that the proposed freeze on Aave v2 could incentivize Egorov to decrease his borrowing or diversify his collateral types, thereby safeguarding Aave from the accumulation of bad debt resulting from a potential decline in the liquidity of CRV tokens. The firm added that a CRV freeze would encourage the migration of the aforementioned loan position to Aave version 3, which is designed for better risk management. 

Egorov’s loan account has maintained a health factor above 1.6, indicating no immediate bad debt risk to Aave.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The latest price moves in bitcoin (BTC) and crypto markets in context for June 19, 2023. First Mover is CoinDesk’s daily newsletter that contextualizes the latest actions in the crypto markets.

Low validator limits have led to waiting times of over one month, as of Monday.