The U.S. Securities and Exchange Commission has reportedly launched an investigation into the Terra implosion, according to Bloomberg.
The securities watchdog is working to determine if Terraform Labs, the developer of the failed blockchain, violated federal investor protection rules.
Terraform Labs isn’t aware of an investigation into Terra’s LUNA cryptocurrency.
On Wednesday, Terra co-founder Do Kwon lost an appeal to block the agency’s subpoenas over another ongoing investigation into the Mirror Protocol. Kwon was served by the SEC right in the middle of a cryptocurrency conference last November. The SEC was investigating whether or not the Mirror Protocol, which allows issuing synthetic assets representing stocks of major companies, violated securities laws. The controversial founder decided to sue the agency, accusing it of violating its own rules by improperly serving the subpoena. It also argued that the agency’s jurisdiction was limited since Terraform Labs is incorporated in South Korea.
Alex DovbnyaSeveral ongoing SEC investigations add to a slew of legal troubles faced by Terraform Labs and Kwon.
As reported by U.Today, South Korean authorities have also zeroed in on the failed cryptocurrency project. The local police are investigating embezzlement allegations against an unnamed employee.
In the meantime, Terraform Labs co-founder Daniel Shin dismissed mounting accusations of fraud, claiming that the company never intended to defraud users.
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
Yuri Molchan
Tomiwabold Olajide
Dan Burgin
Vladislav Sopov