Do Kwon of Terraform Labs Launches Lawsuit Against the SEC

Co-founder and CEO of Terraform Labs, Do Kwon has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC). Kwon took this step following SEC serving him a subpoena while he was presenting, during Messari’s Mainnet conference. He thought the behavior was absolutely unprofessional and against the policies of the SEC itself.

Do Kwon Confronts the SEC

Do Kwon, CEO Terraform Labs, is suing the SEC for scenes that happened at the most recent installment of Messari’s Mainnet conference. As admitted by Do Kwon, he had been in talks with the SEC about the latter’s intentions to take possible actions against Mirror Protocol, a decentralized app linked to Terraform, that tracks prices of stocks for synthetic assets.

According to the lawsuit, the SEC first contacted Kwon back in May to discuss the operations of Mirror Protocol, and its links with Terraform Labs. Kwon had since met with SEC lawyers however, voluntarily going forward to answer questions asked of him during a five-hour long interrogation. After the interrogation, the SEC would then ask Terraform to voluntarily provide documents relating to the subject.

Unfortunately, the failure to find a common ground by the SEC and Kwon’s lawyers meant that the whole process deteriorated, reaching a breaking point in September. This was when the SEC reportedly made a mistake, deciding to issue subpoenas for Terraform Labs and the CEO while conversations were still ongoing.

Reports have it that the subpoenas were delivered using a private courier services company called “Cavalier Courier And Process Services”.

Unlawful Actions By the Commission

While maintaining that the SEC lacks jurisdiction over both the Terraform Labs and the CEO, the lawsuit also states that, the public manner in which the subpoenas were delivered (publicly), makes them void. In fact, reports have it that the subpoenas were delivered in the presence of one of the assistants at Messari’s Mainnet. Now, this goes against established policies of the SEC that says formal matters as this should be kept under the rug until stated otherwise by the institution.

As a result, the lawsuit is asking that the subpoenas be considered void, while also asking for damages, including attorney fees and other relief, however way the court deems appropriate.

Recall that TheCoinrise has reported that it may seem like the SEC has a personal campaign against the Decentralized Finance sector.