Do Kwon must comply with the SEC investigation into Mirror Protocol as he was ordered to comply with subpoenas issued bу the regulator back in February so let’s read more today in our latest cryptocurrency news.
The appeal filed on behalf of Terraform Labs CEO Do Kwon was overruled on June 8 by a US court which stated that he and his company have to comply with investigations by the US SEC into the company’s Mirror Protocol. The latest development in legal tensions between Kwon and the SEC only affirms the ruling from February that both Kwon and his company have to hand over documents related to the Mirror Protocol and provide testimony to the SEC.
Mirror Protocol is a decentralized finance platform that is built on Terra and enables users to exchange synthetic versions of stocks like Apple, Tesla, and more. Kwon’s appeal was filed on the basis that the SEC violated rules when he delivered the subpoena at the Messari Mainnet conference back in 2021. the Terraform Labs CEO argued that the company lacked enough presence in the US markets and the appeal also argued that the appeal should have been delivered to Kwon’s legal counsel and not him personally. Today, the US Court of Appeals for the Second Circuit upheld the February ruling.
It said that the SEC was justified in subpoenaing Kwon and Terraform Labs based on the marketing and promotion to US consumers, retention of US-based employees, and contracts with the US-based entities as well as business trips to the US all of which related to the Mirror Protocol and the digital assets at issue with the SEC investigation. The court dismissed the argument that it was not right for him to be served papers in person because of a lack of complaince with the SEC subpoenas delivered electronically.
The court dismissed the argument that it was improper for him to be served papers in person because of a lack of complaince with the SEC subpoenas that were delivered electronically. The determination was based on a few other contacts in the US including the director of Special Projects that are working for Terraform Labs which promoted the company’s digital assets in the country, the ruling read. The court also stated the busienss arrangements with the US companies to trade assets from the Mirror Protocol justified the SEC investigation where $200,000 with one US-based trading platform was made and also Terraform Labs indicated that 15% of the users of the Mirror Protocol are within the US during negotiations.
Do Kwon had a rough year it seems since today’s ruling adds more pressure to the scrutiny, following the collapse of TerraUSD and the Terra native coin LUNA. The implosion sparked commentary from the regulators around the world which took place as the government officials spotlighted stablecoins as unstable and risky.
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