Under the auspices of its new Chairman, Gary Gensler, the Securities & Exchange Commission of the US has been vigilant in not letting any financial or security mishap go unchecked. Even if the matter involves an inquiry or an investigation against an alleged crypto fraudster, the authority of the SEC is wielding full power against persons who hold any information about the fraudster(s). Do Kwon, who is the CEO and the founding member of Terraform Labs has been subjected to enforcement action on the part of the SEC because the CEO failed to respond to the notices sent to him by the SEC.
It has been a long time since SEC is after Terraform Labs, its founder member and CEO, Do Kwon. Primarily the issue of SEC is with another company namely “Terra”, however, Terra hasn’t been paying any heed to SEC’s demands. But SEC is in the knowledge of the fact that Terra was single-handed developed by Do Kwon. This meant that the Terra was originally developed by the company in which Do Kwon is presently the CEO.
SEC, however, requires some answers from Terra and in this connection has sent multiple subpoenas to Terra. Till to date, however, not a single response has been issued by Terra in response to the queries raised by SEC. Left with no option, SEC has now found a middle way which involves going to the Court for necessary directions.
It has been confirmed that SEC has filed court proceedings in which Terra along with Do Kwon and Terraform Labs have been impleaded as parties. Though the filing is primarily against Terra, yet in an effort to force Terra to respond, Kwon and his firm have been made parties. Before the Court, SEC has been praying that orders be passed against Kwon to record his testimony in the matter of Mirror Protocol. In addition, SEC has prayed that through court orders, Kwon is made to produce certain documents relating to the investigation against Mirror Trading.
It is assumed by SEC that Kwon and his company have something to do with Mirror Trading. On the other hand, Mirror Trading which is also known by its name “MTI” was a known crypto fraud. It was a scheme that was designed to defraud the general public for their investments in cryptocurrencies. It became one of the most notorious and biggest scams of all time which involved victims from the entire world.
SEC’s investigations lead the authority to Do Kwon wherein SEC believes that he has the information SEC seeks. However, since nobody was cooperating with SEC, therefore, the authority had to seek redressal through the Court orders. It is very likely that considering the necessity of investigation, the Court will direct Kwon to cooperate with SEC.