United States Securities and Exchange Commission (SEC), has brought an action against Terraform Labs and Do Kwon its cofounder and CEO. Kwon is being asked by the SEC to obey a number of subpoenas that he has not responded to. The investigative subpoenas seek Kwon’s testimony and the production of documents from Terraform Labs
SEC Takes Action Against Terraform Labs And Do Kwon
The United States Securities and Exchange Commission has moved on to the next stage in their battle against Terraform Labs and Do Kwon, its founder and CEO. The SEC is seeking to make the company comply with several subpoenas that it has issued to Kwon and which have not been addressed. According to the document, these subpoenas include petitions for Kwon’s testimony and also the production of documents from Terraform Labs.
These actions are part of an investigation that the SEC is currently undertaking regarding Mirror Protocol, a synthetic asset protocol that lets users trade “massets” — tokens with price equivalence to stocks traded on U.S. soil. The SEC stated it has reason to believe that Terraform Labs and Do Kwon “participated in the creation, promotion, and offer to sell massets and MIR tokens to U.S. investors.”
It would constitute a violation to U.S. federal law by selling securities or offering them without first having registered them. This could also be considered unlicensed brokerage. The document says:
SEC continues its investigation into factual matters and has yet to conclude that anyone or any entity violated federal securities laws.
Do Kwon’s Lawsuit Still Ongoing
Do Kwon has also filed a lawsuit challenging the delivery of his subpoena, as well as other factors. The documents were served to him while he was presenting at a conference in the country, Messari’s Mainnet. According to Kwon’s legal counsel, the delivery of this subpoena was illegal, because Kwon was served the subpoena in public.
It is against SEC policy that these procedures should be confidential. Many assistants were present at the delivery. Kwon’s filing stated he had been in conversation with the SEC regarding Mirror Protocol since some time ago, and that he was surprised by the actions.
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