Terraform Labs’ Appeal Against The SEC Was Dismissed By The US Court
Mirror Protocol is a sub-project of Terraform Labs, which has been investigated by the US SEC for providing US stock trading products to US investors without registering with this agency. The two have been caught up in a legal battle ever since.
US court rejects Terraform Labs’ appeal
On the evening of June 9, it was reported that the US court had rejected Terraform Labs‘ appeal about the SEC’s legal actions against Mirror Protocol.
Mirror Protocol is a sub-project of Terraform Labs, which has been “touched” by the US SEC for providing US stock trading products to US investors but has not registered with this agency. The two have been caught up in a legal battle ever since.
According to the latest court ruling, two of Terraform Labs’ complaints with the SEC have been denied. The first is that the SEC subpoenaed Mr. Do Kwon directly at the Mainnet Conference in September 2021. The court declared Mr. Do Kwon to be the Mirror Protocol’s representative; therefore, the summons was sent directly to him under the law rather than to a lawyer.
The second complaint is about Mirror Protocol not providing service to US users. The court pointed to the evidence that Terraform Labs promoted Mirror Protocol to US investors, recruited US employees, and reached token trading agreements with many US companies (a deal valued at up to $200,000). During negotiations with a specific company, Terraform Labs confirmed that 15% of Mirror’s users are American. Because of these circumstances, the court dismissed Terraform Labs’ complaint.
Terraform Labs and Mr. Do Kwon will have to comply with the US SEC’s summons request.
The source also claimed that the SEC interviewed Terra employees, and they revealed that in the months leading up to the crash, the company was withdrawing $80 million a month for no particular reason, leading to more allegations of money laundering.
According to Bloomberg sources, the SEC is also interested in the UST model.
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