The United States Securities and Exchange Commission (SEC) subpoena served to the Terraform labs and its CEO, Do Kwon has been found to be in order by the second circuit court. Do Kwon claimed the SEC lacked Jurisdiction over his company and filed an appeal.
Court throws out Do Kwon’s arguments
The US court of Appeals for the Second Circuit has ruled that Terraform labs must cooperate with the SEC subpoenas which seek to investigate Terra’s Mirror Protocol, a DeFi platform that allows users to create and trade “mirrored assets,” or mAssets, which are unregistered securities that represent popular stocks like Apple and Amazon.
Both arguments presented by Do Kwon’s Lawyers were overturned by the court, the court stated that the SEC followed the rules and that Terraform’s counsel was not authorized to receive filings, which was why he was served in person at the Messari Mainnet Conference.
The second argument of jurisdiction was also thrown out of court, the judgement read “Appellants purposefully availed themselves of the U.S. by promoting the digital assets at issue in the SEC’s investigation to U.S.-based consumers and investors.”
Other arguments were outrightly concluded to have no merit. This lawsuit also has no relation with Terra’s recent crash.
