Judge Approves Terraform Labs’ Subpoena Request in SEC Case
U.S. Bankruptcy Court Judge John Dorsey has granted Terraform Labs’ request to subpoena crucial documents as part of its defense against fraud allegations by the SEC. Here are the key points:
- Terraform Labs’ claim is that its algorithmic stablecoin and governance token failed due to an organized attack by short-sellers, not internal mismanagement.
- Judge Dorsey’s approval allows subpoenas to be sent to FTX Trading and FTX US.
- The obtained information will be subject to confidentiality agreements between FTX and Terraform Labs.
- FTX did not raise any objections to the court order.
- Terraform Labs intends to investigate digital wallets linked to short-sellers associated with FTX entities.
Terraform Labs’ request comes as the company faces legal troubles and its co-founder, Do Kwon, serves a sentence for fraudulent travel documents.
Hot Take: The approval of the subpoena request is a significant development in Terraform Labs’ defense against the SEC’s fraud accusations. It provides an opportunity to gather crucial evidence and potentially shed light on the alleged attack by short-sellers.
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