Skip to main content

New York Judge Orders Terraform Labs to Comply With SEC’s Investigative Subpoenas

New York Judge Orders Terraform Labs to Comply With SEC's Investigative Subpoenas

A recent court filing stemming from the Southern District of New York shows that a U.S. district judge has ordered the crypto startup Terraform Labs to comply with the Securities and Exchange Commission’s (SEC) subpoenas. During the second week of November 2021, the U.S. regulator filed a subpoena enforcement action against Terraform Labs and the startup’s CEO, Do Kwon.

U.S. Regulator Gets New York Judge to Side With Investigative Subpoenas Plea

On February 17, 2022, a court order signed by the United States district judge J. Paul Oetken details that the startup Terraform Labs must comply with the SEC’s investigative subpoenas. In mid-November last year, the SEC filed subpoenas that attempted to compel Terraform Labs and its CEO Do Kwon to comply with the “fact-finding investigation.”

The investigation is due to Terraform Lab’s Mirror Protocol, an application that was launched in 2020, allowing users to trade mirrored assets tied to the price of U.S. securities. The SEC wants Terraform Labs and Kwon to explain why the court “should not compel them to produce documents as required by the subpoenas and compel Kwon to appear for testimony.”

A month prior to the enforcement action by the SEC, in October, Terraform Labs and Kwon revealed they were suing the U.S. regulator over serving the CEO the subpoena at a conference in New York. Terraform Labs (TFL) and Kwon insisted that the SEC lacks jurisdiction over the companies and the subpoenas were not served through the proper channels. The lawsuit against the SEC states:

The SEC attorneys were well aware that TFL and Mr. Kwon had consistently maintained that the SEC lacked jurisdiction over TFL and Mr. Kwon, and at no time asked Dentons lawyers whether it was authorized to accept service of subpoenas.

New York Judge: ‘Terraform and Kwon Are Hereby Ordered to Comply With the Referenced Subpoenas’

Despite the lawsuit against the SEC, last Thursday the Southern District of New York judge J. Paul Oetken ordered TFL and Kwon to comply with the regulator’s subpoenas. After the court had reviewed all the filings between both parties and listened to an oral argument by telephone conference, Oetken granted the SEC its wishes.

“For the reasons stated on the record at the February 17, 2022 conference, the SEC’s application is granted, and Terraform and Kwon are hereby ordered to comply with the above-referenced subpoenas,” Oetken’s order explains. The court filing adds:

This order is stayed for 14 days to permit further briefing regarding a potential stay pending any appeal of this order.

Mirror Protocol is still operational today and is the fifth-largest decentralized finance (defi) protocol on the Terra blockchain today. At the time of writing, the synthetics protocol for on-chain price exposure to real-world assets has $587.34 million total value locked (TVL). The SEC accuses TFL and Kwon of participating in “the creation, promotion and offer to sell assets and MIR tokens to U.S. investors.”

What do you think about the New York judge’s court order to TFL and Do Kwon ordering them to comply with the SEC’s investigative subpoenas? Let us know what you think about this subject in the comments section below.



from Bitcoin News https://ift.tt/ZJy7nlL
Labels:

Comments

Post a Comment

Popular posts from this blog

Mt Gox Creditors Updated, Trustee Says Rehabilitation Custodian Is ‘Currently Preparing to Make Repayments’

On August 31, 2022, the Mt Gox trustee Nobuaki Kobayashi explained in a recent letter that the rehabilitation custodian is “currently preparing to make repayments” to Mt Gox creditors. Trustee Updates Mt Gox Creditors — Repayment Date and Exchange Still Unknown Last week speculation and rumors concerning the release of 140K bitcoin ( BTC ) from Mt Gox littered social media platforms and headlines. Bitcoin.com News covered the situation six days ago as a number of people and Mt Gox creditors called the rumors “ fake news .” During that same period of time, a bitcoin whale transferred 10,000 BTC to unknown wallets, and a 2018 annotation , heuristics, and clustering methods show the funds likely originated from the June 2011 Mt Gox hacks. Following the mysterious whale transfer, last Wednesday, Mt Gox published an official update from the court trustee Nobuaki Kobayashi that explains the court is “currently preparing to make repayments” to creditors. Mt Gox creditors have been wait...
Post a Comment
Read more

Fidelity Discusses Bitcoin as Portfolio Insurance — Could Soon Stand in ‘Stark Contrast’ to Path Fiat Currencies Take

Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be considered portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.” Fidelity Says Bitcoin Could Be Portfolio Insurance Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently published a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio insurance” as the rising dollar impacts global currency markets. “The strengthening U.S. dollar is wreaking havoc among other countries and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Accord,” Fidelity explained. In addition, “more monetary debasement may be needed to ...
Post a Comment
Read more

Economists Discuss Russia, China Potentially Developing Gold-Backed Currency That Could Undermine US Dollar

Economists have weighed in on reports that China and Russia may be developing a new gold-backed currency that could undermine the U.S. dollar’s status as the world’s primary reserve currency. Russia and China May Be Developing Gold-Backed Currency Several experts have shared their views on Russia and China potentially creating a new gold-baked currency, Fox Business reported Saturday, emphasizing that China has been buying up huge quantities of gold while Russia was forced off the U.S. dollar due to sanctions imposed on the country following its invasion of Ukraine. The news outlet noted that some experts have cautioned that these moves, along with the closer relationship that has developed between Moscow and Beijing, point to the likelihood of China attempting to launch a gold-backed currency. However, neither Russia nor China has officially confirmed plans for such a currency. Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. diplomat,...
Post a Comment
Read more