Terraform Labs Loses US Appeal Over SEC Subpoena

Jun 10,2022
KingData News: The U.S. Securities and Exchange Commission’s (SEC) serving of Terraform Labs CEO Do Kwon at the Mainnet Conference last year in New York was legitimate, and the company must cooperate with the commission’s investigation, the Court of Appeals for the Second Circuit has ruled. Kwon and Terraform Labs contested the validity of the subpoena, but lost the case in February and appealed. On appeal, the court found that the SEC followed its own rules on serving subpoenas, and Terraform Labs’ counsel was not authorized to receive subpoenas. The court also agreed that Kwon and Terraform Labs had enough ties to the U.S. because the company has employees based in the country and had previously indicated that 15% of users of its Mirror Protocol are located there. This lawsuit is unrelated to the recent collapse of the Terra ecosystem. Nor is it related to the criminal investigation into Kwon and Terraform Labs by South Korean authorities. (CoinDesk)
This indicator provides follow-up on the depg of Terra's stablecoin UST on May 8th. Terra's stablecoin UST briefly lost its peg to the U.S. dollar on May 8th, dipping as low as $0.985. The depeg event came after a series of multi-million dollar UST selloffs as one account traded about $85 million worth of UST for USDC on Curve Finance, while another user reportedly sold $108 million worth on Binance. UST posted a slight recovery shortly after Terraform Labs CEO Do Kwon posted a tweet calling out the stablecoin's critics.