The show-cause notice issued by the Securities & Exchange Commission of the US (SEC) to the CEO and co-founder of Terraform Labs, Do Kwon, has been challenged before a Court of law in a lawsuit. Kwon was attending Messari’s conference as a speaker at Mainnet where he was delivered the notice. Kwon says that such behavior on the part of SEC is unacceptable and if any notices were to be delivered then the process should have been done through proper channels of delivery but not like this.

Terra is a cryptocurrency that was developed and designed in the labs of Terraform under the auspices of Do Kwon. Do Kwon is therefore not only a co-founder of Terraform Labs and Terra but he is also the CEO of Terraform Labs.

Kwon is aggrieved that his integrity was lowered in the eyes of others by none other than the Securities & Exchange Commission (SEC). He has alleged that SEC delivered him the notice when he was attending a conference of Messari’s Mainnet as a guest speaker. Such an act of SEC is non-appreciable, libelous, damaging and unfounded. As a result of SEC’s unfounded behavior he told that he has sued SEC in a court of law.

Background of the issue between SEC and Kwon started when SEC asked him to assist them in an investigation against Mirror Protocol.

In the lawsuit, Kwon has been arguing that SEC had time and again called him for discussing the matter of Mirror Protocol. People in SEC wanted to know if there was any relationship between Kwon’s company with the Mirror Protocol. He has mentioned in the case that he met with the legal counsels of SEC many times voluntarily. They asked him several questions and the interrogation segment sometimes went onto to 3 to 5 hours. However, he answered each and every question that were asked by SEC’s legal counsels. Even he was asked to submit the documents voluntarily which Kwon would think would be helpful for the SEC.

He argues in the case against SEC that he was voluntarily called upon by SEC many times till the month of September. However, very surprisingly, in the month of September Kwon was sent a subpoena without mentioning any reason at all. He feels that SEC is abrogating its authority and misusing it against people who were assisting it voluntarily.

However, what really depressed Kwon was the method of delivery of subpoena. He was attending a conference and was about to address the gathering, when he was handed over the SEC notice. Kwon believes that firstly it was very unprofessional on the part of SEC to send someone a notice while the person is in a public gathering. Secondly, he argues that SEC has no jurisdiction over him nor on his company, Terraform Labs. Kwon is therefore praying to the Court to nullify the notice of SEC for being illegal and void ab initio.


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