Here are some of the major developments in the world of crypto over the past few days.
Bitcoin financial services firm Unchained and University of Austin have partnered to launch a long-term endowment fund with the value of 68,178 BTC. On May 31, Austin, Texas-based cryptocurrency services and custody company Unchained announced a new partnership with University of Austin (UATX) for the next five years.
Unchained CEO Joseph Kelly launched the fund with a personal donation of 2 BTC, equivalent to approximately $137,000 at current prices. The program intends to promote community engagement through cooperative marketing initiatives, events, guest lectures, and discussions targeted at educating the public about Bitcoin's benefits and potential to transform finance and education.
University endowments are collections of money or other financial assets contributed to an academic institution that serve as a self-sustaining source of revenue by not consuming the entire endowment. UATX isn't the only US university investing in cryptocurrency. In addition, Ivy League universities such as Harvard, Yale, and the Massachusetts Institute of Technology (MIT) invested in cryptocurrencies in 2018.
Terraform Labs and its former CEO, Do Kwon, have reached an agreement in principle to resolve a fraud case with the U.S. Securities and Exchange Commission according to court filings. Lawyers for both parties announced the agreement in principle in a conference call with Judge Jed Rakoff on May 29. Terraform Labs and CEO Do Kwon are expected to settle with the SEC by June 12.
The SEC’s case against Terraform and Kwon focused on the misleading promotion and sale of crypto tokens, particularly the algorithmic stablecoin TerraUSD (UST) and Terra-related tokens. The collapse of Terraform Labs in May 2022 triggered the latest crypto winter, leading to a sharp downturn across markets and affecting multiple crypto firms and investors.
Kwon and Terraform could face significant penalties as the SEC sought approximately $5.3 billion in disgorgement, interest and civil penalties. Kwon was arrested in March 2023 while attempting to leave Montenegro on suspicion of forging travel documents and may also face prosecution there. He was later released on bail and the U.S. is seeking his extradition.
Securities and Exchange Commissioner Commissioner Hester Pierce recently published a letter pitching a cross-border sandbox program between U.S and U.K. blockchain firms experimenting with tokenized securities. During a recent panel at Consensus 2024 Hester Pierce said her “sandbox” pitch would offer opportunities for cross-border collaborations between blockchain firms without fear of regulatory threats.
Pierce's letter follows a joint proposal made by the Bank of England (BOE) and the UK Financial Conduct Authority (FCA) to create a safe environment for UK blockchain startups to test the real-world implementation of issuing and trading tokenized securities, citing concerns about retaliation from the state regulator. Furthermore, the SEC might develop its micro innovation sandbox in the United States, allowing participants to set their own parameters and perform experiments within specific boundaries to gain insights.
The Commissioner proposed a set of requirements for a cooperative digital securities sandbox program between blockchain enterprises with good standing in the United States and the United Kingdom. The pro-crypto regulator's letter also emphasized the advantages of security tokenization, including as lower transaction costs, enhanced settlement finality, and greater transparency for investors and market participants.