US SEC Investigating Do Kwon's Terraform Labs and UST
The U.S Securities and Exchange Commission (SEC) is reportedly investigating Terraform Labs and the collapse of algorithmic Stablecoin terrausd (UST) SEC is investigating whether Terraform Labs broke securities and investment products rules.
UST lost its peg to the U.S dollar in early May, The Stablecoin quickly lost its value and collapsed alongside cryptocurrency terra (LUNA) Both coins were created by Terraform Labs CEO Do Kwon who has since Launched LUNA 2.0
The SEC is investigating whether the marketing of UST before it crashed violated federal investor protection regulations the publication conveyed SEC enforcement attorneys are investing whether Terraform Labs broke securities and investment products rules.
The implosion of the two cryptocurrencies prompted lawmakers in different countries to look into regulating Stablecoins. in the U.S Treasury Secretary Janet Yellen said the regulation of Stablecoin is urgent SEC Chairman Gary Gensler subsequently said that a lot of crypto tokens will fail.
The latest court ruling comes shortly after a U.S District Court in February 2022 ordered Do Kwon and Terraform Labs to cooperate with SEC's investigative subpoenas into Mirror Protocol.
The appellants later challenged the court's decision but lost the appeal case. An excerpt from the court order said:
“We have considered all of Appellants’ remaining arguments and conclude they are without merit. For the foregoing reasons, we conclude that the district court properly granted the SEC’s application for an order requiring compliance with the investigative subpoenas and we AFFIRM the order of the district court.”
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