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Terra (LUNA) founder Do Kwon has filed a lawsuit against the United States Securities and Exchange Commission (SEC), arguing that the agency does not have the authority to take legal action against him.
In the lawsuit, Mr. Do Kwon confirmed in September that he was subpoenaed by the SEC shortly before stepping on the Mainnet Conference stage, as reported by CHK.
The reason for the lawsuit is that as a citizen of South Korea, Mr. Do Kwon believes that he is not obligated to appear before a US court. In addition, Terra’s founder also accused the SEC of violating the confidentiality requirement of the investigation into Terra by sending subpoenas directly at a conference with many participants.
– Mr. Whale (@CryptoWhale) October 23, 2021
In the lawsuit, Terra further revealed that the focus of the SEC investigation against the company revolves around Mirror Protocol, a DeFi protocol that specializes in creating cryptocurrencies that mimic the value of many famous stocks. eyes in December 2020. This protocol promises to provide global users with the ability to participate in investing in the US stock market. However, if there are Americans using Mirror Protocol, Terra is required by law to register with the SEC because the shares listed on Mirror will be classified as securities or tradable investment contracts.
The commission even threatened to sue Terra if the company failed to comply with SEC requirements. Therefore, many legal experts believe that Terra’s reverse action is to “pre-empt” the upcoming moves of the SEC.
Earlier, at the Mainnet Conference 2021 taking place in September, the crypto community was shocked by the news that one (or more) participants was subpoenaed by the SEC just before stepping on the pitch. discount.
In particular, Do Kwon is the most suspected person, because he is the founder of Terra (LUNA), the issuer of the stablecoin TerraUSD (UST). This hypothesis is possible because in the past time, the US government is increasing legal activities around stablecoins. The SEC itself has repeatedly warned that DeFi projects may be subject to the agency’s management because in their view, many projects can be “disguised securities”. UST is an algorithmic stablecoin pegged to the US dollar but does not actually use the USD for collateral, so it may be closed by the SEC to the securities bracket. The market leading DEX platform Uniswap itself is also being investigated by the SEC for suspicions of trading tokens that are considered securities.
Even so, answering the interview Defiant Within the framework of Mainnet 2021, Mr. Do Kwon denied the information that he was the recipient of the subpoena.
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