Terra is a decentralized financial payment network that rebuilds the traditional payment stack on the blockchain. Luna is the reserve currency of the Terra platform. It has three core functions: i) mine Terra transactions through staking, ii) ensure the price stability of Terra stablecoins and iii) provide incentives for the platform’s blockchain validators.
A court on Wednesday ordered Terraform Labs and its CEO to cooperate with the SEC in an investigation into alleged sales of unregistered securities.
- The SEC initiated an investigation into Terraform in 2021.
- The regulators’ problem is the federal securities violation question in Mirror Protocol.
- Kwon y Terraform han sido ordenados a cooperar con los reguladores.
After the dramatic implosion of Earth last month, the project’s problems seem far from over.
Terraform Labs and its founder, Do Kwon, have been summoned to comply with subpoenas from the U.S. Securities and Exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. Commission (SEC) in connection with an investigation into Mirror Protocol the set of rules that define interactions on a network, usually involving consensus, transaction validation, and network participation on a blockchain. .
In a ruling Wednesday, the U.S. Court of Appeals for the Second Circuit ordered the company behind Earth and its director to cooperate with an investigation by regulators. The news outletThe Bloc k he said.
The investigation into Kwon and Terraform Labs dates back to 2021 and has no connection to the recent collapse of the stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. UST and the token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. native LUNA. Instead, it relates to an alleged violation of the federal securities law through Mirror a decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. finance platform a place to buy, sell and store cryptocurrency (DeFi) that offered trading of synthetic stock market an area or arena, online or offline, in which commercial dealings are conducted. equity equity is the funds that would be returned to a company's shareholders if all of the company's assets were dissolved and all debts were paid off in the event of liquidation. derivatives.
SEC Investigates Unregistered Sale of Securities in Mirror Protocol
As reported by DiarioBitcoin the SEC initiated an investigation to investigate whether the company had carried out an illegal sale of unregistered securities through Mirror Protocol . The regulators had sent two subpoenas to Kwon in September last year while he was attending the conference of Messari in New York.
However, Terraform and its founder disagreed and filed a motion in December opposing the SEC’s subpoena efforts. . At that time, they argued that the court lacked jurisdiction because of the lack of contact from Terraform with the United States. Kwon also filed his own lawsuit against the regulator, claiming that the subpoenas were “ incorrectly issued and notified”. by looking for him in person during the event.
This week, the court overturned both arguments and argued that the SEC was indeed following the rules. The court added that Terraform was not authorized to receive the subpoenas, so Kwon had to be served in person. It also dismissed arguments that U.S. authorities lacked jurisdiction over the Singapore-based company.
According toThe Block a file containing information on transactions completed during a given time period. Blocks are the constituent parts of a blockchain.citing court documents, the court noted that Terraform Labs and Kwon promoted the tokens between U.S. consumers and investors, who retained U.S. employees and had arrangements with U.S.-based entities to exchange the tokens (noting a $200,000 deal with an unspecified exchange). They also said that 15% of the users of Mirror Protocol are based in the USA.
Kwon Must Comply With SEC Subpoena
As he points out Ethereum a decentralized open-source blockchain with smart contracts functionality. World News In February 2022, the initial ruling issued in February 2022 requested that both Do Kwon and Terraform Labs comply with the SEC’s subpoenas. At this week’s hearing, the court again reiterated this order, asking the company and its founder to cooperate with regulators in the investigation.
Earth has faced increased regulatory scrutiny since the historic collapse of UST and LUNA last month. However, this investigation is unrelated to that matter. Instead, it is part of a broader line of investigation by Gary Gensler’s SEC related to the classification of cryptocurrencies as securities.
From December 2020, Ripple is going through a lawsuit with the agency over the sale of its token XRP. More recently, it was reported that the exchange Binance is also the subject of an investigation about an alleged securities law violation in connection with the sale of your token native BNB.
- Terra’s Do Kwon Now Accused of Alleged Laundering Through South Korean Shell Company
- Terra and its CEO ordered to comply with SEC subpoena in the U.S.
- A Terra DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. protocol was hacked in October for $90 million, but was never notified
Article by Hannah Estefania Perez / DiarioBitcoin
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