On Thursday, the US Court of Appeals for the Second Circuit ruled that Terraform Labs CEO Do Kwon must comply with a subpoena handed down by the SEC back in September.
The SEC is reportedly investigating the market meltdown led by Terra last month, causing additional trouble for Do Kwon and its co-founders.
Sources told Bloomberg that the US agency would investigate whether the marketing of the TeraUSD stablecoin violated federal investor-protection regulations prior to the massive market catastrophe. It will investigate to determine whether other regulations surrounding securities and investment products have been violated, including suspicions of money laundering by CEO Kwon.
Report claims the SEC has evidence of money laundering
With new allegations of money laundering against Do Kwon, the SEC is reportedly looking at the figure of nearly $80 million as evidence. Reports claim that a few months before the collapse, money was flowing into several crypto wallets as the company’s monthly operating expenses.
Internal statements with local reporters claim the SEC said “money flowed into dozens of cryptocurrency wallets.”
While anonymous sources in some media outlets also alleged that Kwon did not receive any official remuneration from Terra.
In addition, local reports claim that the SEC recently conducted video inquiries from some of Terra’s leading designers. Journalists at JTBC claim that the lead designers predicted Terra and Luna’s downfall before it actually happened, and that nothing was done to avoid the debacle.
“We are not aware of any SEC investigations into TerraUSD at this time – we have not received any such communication from the SEC and there are no new investigations outside the Mirror Protocol,” TerraForm Labs previously said.
Mirror is a DeFi protocol on Terra that replicates the performance of stocks using UST as stable collateral.
Does Kwon dismiss most of the bullshit as “misinformation”
Meanwhile, Do Kwon recently said on Twitter that “we will soon be more proactive in communicating with the press and getting the right information out there.” After maintaining silence for a while, the co-founder remarked that “there’s a lot of misinformation and lies out there,”
Meanwhile, South Korean authorities have already launched a formal investigation into Terraform Labs, with several class-action criminal charges against co-founders Do Kwon and Daniel Shin seeking to seize assets for alleged ‘fraud’ .
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