The US Court ordered Do Kwon’s Terra to comply with the SEC subpoenas which were issued at a crypto conference last year as we reported in our cryptocurrency news.
The US Court ordered Terraform Labs and the CEO Do Kwon to comply with the subpoenas issued by the US SEC. The subpoenas were issued in relation to the SEC investigation of the DEFI project built on Terra called Mirror Protocol. According to the court filings, the court reviewed the relevant parties’ filings and held an oral argument recently. District Judge Paul Oetken noted:
“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.”
The SEC served Kwon with subpoenas at the Messari Mainnet crypto conference in New York with the SEC’s focus being on Mirror PRotocol which is a platform for creating synthetic crypto-versions of popular stocks such as Microsoft, Tesla, and Airbnb. In other words, the users can buy and sell versions of stocks that will typically be sold somewhere else like a Tesla stock on the New York Stock Exchange at identical prices on a blockchain. Terra’s Kwon who denied receiving the subpoenas reacted by suing the SEC and claimed that the subpoenas were improperly issued and served with the lawsuit adding that the SEC failed to keep the investigation confidential:
“The subpoenas were served on Mr. Kwon in public. Mr. Kwon was approached by the process server as he exited an escalator at the Mainnet summit while on his way to make a scheduled presentation that was not about the Mirror Protocol.”
After Kwon sued the SEC over receiving the subpoena in public, the CEO opined about the rest of the regulatory landscape. Speaking at the Yahoo Fiannce All Markets Summit in October, Kwon said friction between regulators and the crypto industry leads to frameworks that are a bit more accepting of innovation and change. He also added that the tension between regulators and the DEFI space is an occuring trend across the world with the US being no exception.
As recently reported, Terraform Labs is running the algorithmic stablecoin Terra which keeps the peg to the dollar via the mechanism that destroys the secondary currency LUNA which is the 12th biggest crypto by market cap. The SEC is concerned about stablecoins so the related Terraform Labs project garnered the attention for its Mirror Protocol.