Kwon’s trial, China’s blockchain plan

The U.S. criminal fraud trial of Terraform Labs co-founder and former CEO Do Kwon is tentatively scheduled for January 2026. The timeline would give prosecutors and Kwon’s defense team time to review the six terabytes of data expected during discovery.

At a hearing in Manhattan federal court, lead prosecutor Jared Lenow said prosecutors needed time to process encrypted data and four locked phones provided by Montenegrin authorities after Kwon’s extradition on Dec. 31, 2024 The government also faces the challenge of translating documents into Korean. .

District Judge Paul Engelmayer said the length of the trial was “unprecedented” and urged Kwon’s attorney, Michael Ferrara, to consult with his client, currently being held without bail, about whether he would prefer an earlier date. The defense has one week to propose an early trial.

Kwon has pleaded not guilty to nine counts, including securities fraud, wire fraud and money laundering, stemming from the $40 billion collapse of Terra/LUNA in 2022. A civil jury previously ordered Kwon and Terraform Labs to pay a fine of $4.5 billion.

The next status conference is scheduled for March 6.

Ahead of Russia’s upcoming crackdown on illegal cryptocurrency mining, authorities have fined an unnamed electricity supplier in Siberia more than 330,000 rubles (about $3,000) for leasing to an unlicensed mining operation. authorized state land intended for public services. The Prosecutor General’s Office of the Irkutsk region announced the sanction in a post on social networks. Local prosecutors will also initiate administrative proceedings against the supplier.

Siberia’s low operating costs, due to cool temperatures and cheap electricity, have made it a hot spot for cryptocurrency mining. Residents blame these operations for power outages and grid instability, particularly during harsh winters. Russia legalized cryptocurrency mining last year and approved its use in international trade, generating $550 million in tax revenue, but illegal mining operations evade taxes and exacerbate power grid problems. Russia is set to ban cryptocurrency mining in 10 regions for six years and impose seasonal restrictions in regions like Irkutsk.

Last year, fraudsters stole $494 million in cryptocurrency through wallet drain attacks, targeting more than 300,000 wallet addresses, web3 anti-scam platform Scam Sniffer said. This represents a 67% increase in stolen funds compared to 2023, despite only a 3.7% increase in victims, suggesting that individual losses were higher.

Wallet drainers are phishing tools designed to steal digital assets from users’ wallets, often deployed on fake or compromised websites. Scam Sniffer reported 30 large-scale thefts exceeding $1 million each, including a $55.4 million theft in early 2024. In the first quarter alone, $187 million was stolen, rising prices of Bitcoin having fueled phishing activity.

Phishing activity fell in the second quarter after the Pink Drainer shutdown service, but increased again in the third quarter with Inferno causing $110 million in losses. By the end of the year, Acedrainer had captured 20% of the dish rack market, contributing to total losses of $50.8 million in the fourth quarter.

Ethereum was the main target, accounting for 85.3% of losses, with staking and stablecoins being hit the hardest. Fraudsters used fake CAPTCHA and Cloudflare, IPFS pages to evade detection, and used Google and Twitter ads to drive traffic to phishing sites. Signature exploits such as “Permit” and “setOwner” were key methods of draining funds.

A US banking regulator has reportedly advised banks to suspend direct involvement in crypto in 2022 and 2023, but has stopped short of requiring a halt to banking services for crypto companies, refuting claims of widespread “debanking.”

The Federal Deposit Insurance Corporation has sent “pause letters” to banks, advising them to exercise caution when engaging directly in crypto assets. The disclosure of the letters follows a lawsuit filed by History Associates Incorporated, hired by Coinbase, to make the letters public. A court ordered the FDIC, which released redacted versions in December 2024, to reissue them with fewer redactions.

The new batch of 25 letters includes two previously unpublished missives. Coinbase General Counsel Paul Grewal criticized the letters, saying they showed a “coordinated effort to stop crypto activity.”

In response, the FDIC issued a 2022 internal memo outlining supervisory guidance. It distinguished between banks engaged directly in crypto activities, such as custody services, and those providing traditional banking services, such as lending and deposit accounts for crypto customers. The memo emphasized stricter scrutiny of direct crypto involvement due to evolving risks.

This disclosure comes ahead of President-elect Donald Trump’s expected executive order to ease crypto regulations, expected after his inauguration on January 20.

Gemini Trust Company reportedly agreed to pay a $5 million civil penalty to resolve charges brought by the U.S. Commodity Futures Trading Commission regarding its Bitcoin futures contract in 2017. Gemini also agreed to a permanent injunction. The CFTC sued Gemini in 2022, accusing the company of making false or misleading statements and omitting material facts during its 2017 effort to launch the Bitcoin futures contract.

China has reportedly announced a roadmap for a national blockchain infrastructure as part of its data governance strategy, with full implementation planned by 2029. The national guidelines for building data infrastructure , released by the National Development and Reform Commission, outline a phased approach to building one of the largest blockchain-powered data networks in the world. Zhulin Shen, deputy director of the National Data Administration, forecasts annual investments of 400 billion yuan ($54.5 billion) over the next five years.

The Hong Kong Monetary Authority has introduced the Monitoring Incubator for Distributed Ledger Technology to help banks integrate DLT into their operations securely. The initiative has two main components. Firstly, it offers one-on-one banking support, providing access to a dedicated HKMA team for live trial advice. These trials will evaluate banks’ risk management systems before rolling out DLT services, initially focusing on tokenized deposits. Second, the incubator will advance industry-wide adoption by sharing best practices, offering oversight guidance, and conducting research to deepen understanding of the DLT sector.

Carmen Chu, executive director of HKMA, said DLT could revolutionize asset management through real-time ledger updates, autonomous accounting and streamlined reconciliation. She said tokenizing real-world data could enable banks to create bespoke financial products using smart contracts, unlocking new revenue streams and enabling innovative transactions beyond traditional infrastructure.