The indictment stems from an FBI probe into alleged illegal donations from the Turkish government back in 2021. Adams maintained his innocence and vowed to fight the charges. Meanwhile, Curve Finance is reassessing the collateral used for its stablecoin crvUSD after the SEC charged TrueCoin with securities violations. Terraform Labs also announced plans to shut down services by Oct. 30 after losing its own battle with the regulator, unless a buyer steps forward. Wallet in Telegram announced that it restricted access for UK users while complying with new FCA regulations.
NYC Mayor Faces Federal Charges
New York City Mayor Eric Adams has been indicted in connection to a federal corruption investigation, making him the first sitting mayor in the city's history to face charges while in office. Although the specific charges are still sealed, Adams is expected to appear in court on Sept. 26 when the details of the indictment will be revealed.
In response to the indictment, Adams maintained his innocence, and stated that he expected to become a target for his advocacy for New Yorkers and will fight to clear his name. The charges reportedly stem from an FBI investigation in November of 2023, which involved a search of Adams' electronic devices as part of a probe into suspected illegal donations from the Turkish government in 2021.
Adams has been a very vocal supporter of cryptocurrency, and took his first three mayoral paychecks in Bitcoin (BTC) and Ethereum (ETH). He also pledged to establish New York as a hub for the crypto industry after his election in 2021.
SEC Charges Push Curve to Reassess TUSD Collateral
In other legal news, decentralized exchange Curve Finance is considering removing TrueUSD (TUSD) from the list of tokens serving as collateral for its stablecoin, crvUSD, after the US Securities and Exchange Commission (SEC) charged TUSD’s issuer, TrueCoin, with securities law violations.
A proposal was submitted on Curve’s governance forum on Sept. 25 by Wormhole. It recommended reducing the upper limit on crvUSD’s TUSD backing to zero, mostly because of regulatory and solvency concerns. Currently, up to $10 million worth of crvUSD can be minted with TUSD as collateral. The proposal also suggested lowering the amount of crvUSD that can be minted with Paypal’s stablecoin, PYUSD, from $15 million to $5 million, adjusting the reliance on each collateral pool.
Proposed changes to current crvUSD backings (Source: Curve)
The move comes after the SEC settled charges against TrueCoin and TrustToken for fraudulent and unregistered sales of investment contracts involving TrueUSD. According to the SEC, TrueCoin and TrustToken misled investors by claiming that TUSD was fully backed by US dollars, when in reality, 99% of TUSD’s reserves were invested in a speculative offshore investment fund.
TrueCoin and TrustToken did not admit or deny any of the allegations but consented to pay civil penalties. Curve’s crvUSD stablecoin is currently backed by several types of collateral, including Ethereum and Wrapped Bitcoin, with Wrapped Bitcoin accounting for the largest portion at over $68 million in total value locked. The proposal is especially concerned over crvUSD’s overexposure to minor stablecoins, particularly TUSD, and called for greater diversity among its collateral pools.
The top crvUSD collateral tokens (Source: Curve)
Terraform Labs to Shut Down Services by Oct. 30
Terraform Labs is also currently dealing with its own legal consequences. The company announced on Sept. 25 that it will shut down several of its products and services by Oct. 30 if no third-party buyers step forward.
This move is part of Terraform’s ongoing wind-down after its settlement with the SEC in June. Despite ongoing discussions with third parties, Terraform indicated that these talks have not progressed as they hoped, and time is quickly running out for the community and potential buyers to act.
The company listed four services and four products currently under negotiation for potential takeovers, including the Luna Foundation Guard, blockchain explorer, and API services. Terraform CEO Chris Amani previously outlined these plans in June, and is disappointed over the company’s inability to continue operating after losing its legal battle with the SEC.
As part of the company’s bankruptcy plan, the Terraform community is expected to assume responsibility for some network services, and discussions are already underway in the forums. Pisco testnet APIs were shut down in early September in line with the plan, while Pulsar Finance may already have a buyer.
Terraform filed for bankruptcy in January and agreed to pay $4.47 billion in its settlement with the SEC, which included disgorgement, penalties, and interest. A Delaware bankruptcy judge also approved the company’s bankruptcy plan on Sept. 20.
Wallet in Telegram Restricts UK Access Due to Regulatory Changes
Meanwhile, Wallet in Telegram will temporarily restrict access for users in the United Kingdom because of regulatory restructuring. The wallet provider announced on Sept. 25 that it will register as a crypto asset provider under the Financial Conduct Authority (FCA) regulations.
Until the registration is complete, UK users will be unable to use the in-app wallet features. They will, however, be able to withdraw funds to external wallets without fees during this period.
(Source: TradingView)
Wallet in Telegram is not operated by Telegram itself, and its decision to comply with FCA regulations is unrelated to any policy changes involving Telegram founder Pavel Durov.
Despite this, it is clear that the company took Durov’s arrest seriously as Telegram recently implemented big changes after the CEO’s arrest. The platform announced that it will share user data, like phone numbers and IP addresses, with law enforcement upon receiving valid legal requests. On the other hand, this did raise some concerns among privacy advocates.
Durov defended the decision, and stated that the measures are there to protect users by discouraging criminal activity. Additionally, Telegram disabled its personal geolocation feature, and replaced it with a “Businesses Nearby” option. It also discontinued support for its “Telegraph” blogging tool, which was often misused by a small minority to spread illicit material. Durov firmly believes that these changes were very necessary to protect the platform’s integrity for its user base.
