Crypto Exchange Zipmex Under Fire: Thai SEC Charges Ex-CEO

A number of former crypto titans are grappling with legal challenges, including fraud charges and extradition delays.

The law has been pushing back hard against some of the (former) big players in the crypto space. Former executives from Zipmex, Terraform Labs, and FTX are facing serious legal challenges. Akalarp Yimwilai, former CEO of Zipmex Thailand, has been charged with fraud by the Thai SEC for allegedly spreading false information about the handling of customer assets.

Meanwhile, in Montenegro, the extradition of Terraform Labs co-founder Do Kwon has been delayed due to procedural violations, continuing the legal saga after Terra's collapse in 2022. In the United States, Sam Bankman-Fried, former CEO of FTX, is due for a Curcio hearing to address potential conflicts of interest with his legal team, after his conviction on multiple felony counts related to the collapse of FTX.

Former Zipmex CEO Faces Fraud Charges

The Thai Securities and Exchange Commission (SEC) has taken legal action against Akalarp Yimwilai, the former CEO of crypto exchange Zipmex Thailand, accusing him of fraud. The allegations center around Yimwilai's purported spread of false and misleading information about the handling of customers' digital assets.

Specifically, the SEC pointed out that Yimwilai falsely claimed assets held in user Z Wallets were being transferred to overseas crypto wallets, a move that contravened Zipmex's terms and conditions and amounted to what the regulator called "corruption and deception."

This deceit, according to the Thai SEC, involved withholding crucial information from customers, leading to the referral of a complaint against Yimwilai to Thailand’s Office of the Provincial Crime Suppression Division for potential legal proceedings. Alongside the accusations against Yimwilai, Zipmex Thailand itself also faces similar fraud allegations after reports of discrepancies between customer asset reports and findings from the SEC's investigation.

Akalarp Yimwilai, who served as CEO of Zipmex Thailand from August 2018 until November 2023, has a very diverse background including roles as a legal counsel and political correspondent with the Thai government. The company, a subsidiary of the Singapore-based crypto exchange Zipmex, also came under scrutiny from financial regulators concerning its acquisition by V Ventures in 2023. Adding to the company's regulatory challenges, on Feb. 2, the Thai SEC issued an order for Zipmex to halt its digital asset trading and brokerage services temporarily, with a demand to align its operations with regulatory standards within 15 days.

Montenegro Court Halts Do Kwon's Extradition Again

Meanwhile, in Montenegro, the extradition of Terraform Labs co-founder Do Kwon has been put on hold once again. This comes after a successful appeal by Kwon’s defense team, leading the appellate court of Montenegro to overturn a prior extradition decision on Feb. 7. The court highlighted "significant violations of the provisions of criminal procedure" in the previous ruling by the High Court in Podgorica, also pointing out its "incomprehensible" wording and lack of clear reasoning for its decisions.

This latest ruling effectively annuls the High Court's decision from Dec. 29, 2023, and mandates a retrial of the case. The appellate court’s decision is the most recent episode in the ongoing legal saga surrounding Kwon, who has been embroiled in an obviously very complex extradition process after the dramatic collapse of the Terra crypto platform in May of 2022. This event triggered global financial regulatory scrutiny, with authorities in South Korea and the United States accusing Terraform Labs and Kwon of orchestrating a fraudulent scheme that resulted in multibillion-dollar investor losses.

Kwon's arrest in Montenegro in March of 2023 for attempting to use falsified travel documents only ended up complicating matters even more. This arrest underscored the international scope of the legal efforts to hold him accountable, with both South Korea and the United States seeking his extradition.

Another co-founder of Terraform Labs, Shin Hyun-Seong, also known as Daniel Shin, is facing trial in South Korea as well. Shin has pointed fingers at Kwon, blaming him for the Terraform collapse through what he described as "external attacks."

Former FTX CEO Sam Bankman-Fried, known as SBF, is set to appear in person before a judge on Feb. 21, after an order by Judge Lewis Kaplan of the United States District Court for the Southern District of New York. This appearance, one of the first since the conclusion of his initial criminal trial, is scheduled for a Curcio hearing to address potential conflicts of interest concerning his legal team, specifically lawyers Marc Mukasey and Torrey Young.

The hearing stems from concerns raised by U.S. prosecutors regarding Mukasey and Young's representation of both Bankman-Fried and former CEO Alex Mashinsky, given the intertwined legal issues between FTX, its sister company Alameda Research, and Celsius, a firm that had financial dealings with Alameda.

Prosecutors are worried about a possible "contrary position" that might pop up during trial or sentencing, considering Mashinsky has partly blamed SBF for the collapse of his company, Celsius. The Curcio hearing will try to ensure that Bankman-Fried is fully aware of any potential conflicts of interest with his legal representation.

Bankman-Fried's legal troubles began after the collapse of FTX in November of 2022, leading to his arrest in the Bahamas, extradition to the United States, and subsequent charges related to the misuse of funds between FTX and Alameda. He faced 12 charges across two criminal trials, with the first trial ending in a conviction on seven felony counts. Sentencing is set for March 28, though it's suggested that the second trial in March may not proceed due to the existing conviction.

Since his conviction, Bankman-Fried has been detained at the Brooklyn Metropolitan Detention Center, where he has been notably absent from court proceedings. His time in jail has been characterized by very limited information, though reports have humorously noted his adaptation to trading packets of Mackerel for services, a stark contrast from his golden days as cryptocurrency bigshot.