SEC investigates Terra project explosion, $60 billion loss
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Answer SEC investigates Terra project explosion, $60 billion loss
Bloomberg reports that the US Securities and Exchange Commission (SEC) has begun an investigation into Terra’s implosion.
The Securities and Exchange Commission is working to determine whether Terraform Labs has violated federal investor protection rules.
Terraform Labs had no knowledge of the investigation into the Terra LUNA cryptocurrency.
Last Wednesday, Terra co-founder Do Kwon lost an appeal to block subpoenas from the agency over another ongoing Mirror Protocol investigation.
The SEC began investigating Kwon in the middle of a crypto conference last November.
The SEC has been investigating whether the Mirror Protocol, which allows the issuance of synthetic assets representing shares of large companies, violated securities laws.
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The controversial founder decided to sue the authority, accusing it of violating its rules by improperly filing a subpoena.
He also argued that the authority’s jurisdiction is limited in the United States of America and that the Terraform Labs project is based in South Korea.
However, the Court of Appeals for the Second Circuit has ruled that the SEC’s subpoenas are valid.
So Terraform Labs has to cooperate with the regulator.
Several ongoing SEC investigations add to a slew of legal problems Terraform Labs and founder Kwon faced earlier and meant there were red flags even before the disaster.
We previously discussed in the Arab Bitcoin about the focus of the South Korean authorities also on the failed cryptocurrency project “Terra” recently.
The local police are investigating allegations of embezzlement against an unnamed employee.
Meanwhile, the co-founder of Terraform Labs has dismissed the growing accusations of fraud, claiming that the company never intended to defraud users.
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