TerraUSD Creator Opposes SEC’s Request for Questioning
The founder of Terraform Labs, Do Kwon, has asked a federal court to reject the U.S. Securities Exchange Commission’s (SEC) request to question him in the U.S. regarding the crash of his company’s stablecoins Terra and Luna. Kwon’s lawyers have filed a document opposing any opportunity for him to provide testimony to U.S. regulators, citing his indefinite detention in Montenegro as a barrier to his presence in the U.S. They also argue that written testimony would violate Kwon’s due process rights under U.S. law.
Impossible Mandate
In the filing, Kwon’s lawyers state that an order mandating something that is impossible serves no practical purpose and risks undermining judicial authority.
SEC’s Request for Interview
Last week, the SEC requested permission from the court to interview Kwon before October 13, which is the cut-off date for discovery in the case.
Terra/Luna Collapse Lawsuit
In February, the SEC sued Terraform Labs, alleging that the company misled investors about the safety of investing in its TerraUSD stablecoin. The token was marketed with high yields and a peg to the U.S. dollar through a mint-burn system involving Luna. However, both coins crashed in May 2022, resulting in a loss of $50 billion in market value.
Hot Take: TerraUSD Creator Fights Back Against SEC
Terraform Labs founder Do Kwon is pushing back against the SEC’s attempts to bring him back to the U.S. for questioning about the collapse of his stablecoins Terra and Luna. His lawyers argue that it is impossible for him to appear in person due to his indefinite detention in Montenegro. They also claim that written testimony would violate Kwon’s due process rights. This legal battle highlights the regulatory challenges faced by cryptocurrency creators and the complexities surrounding stablecoin projects. The outcome of this case will likely have significant implications for the future regulation of stablecoins and the crypto industry as a whole.
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