Do Kwon, co-founder and CEO of Terraform Labs, the company behind the Terra blockchain, is suing the US Securities and Exchange Commission (SEC). Kwon, who was summoned when he spoke at Messari’s Mainnet, says the behavior was contrary to SEC policy.
Do Kwon embarked on a fight with the SEC
Do Kwon, co-founder and CEO of Terraform Labs, the company behind the design and creation of cryptocurrency Terra (LUNA), is suing the SEC over an incident that occurred during the last sequel to Messari’s Mainnet.
Some time ago, the Kwon SEC was questioned and informed about possible measures against the Mirror Protocol, a decentralized application that monitors stock prices.
The SEC contacted Kwon in May to discuss the operation of the Mirror Protocol and the Terraform Labs connection. Kwon volunteered with SEC lawyers and answered their questions during the five-hour interrogation. The SEC then asked Terraform to submit documents on the subject voluntarily.
The discussion between SEC and Kwon lawyers reached a turning point in September, when the SEC, still in talks with Terraform stakeholders, decided to summon Terraform Labs and Kwona through a private company called Cavalier Courier And Process Services to deliver them to Messari’s Mainnet. .
According to court documents, the SEC lacks jurisdiction over Terraform Labs and Kwone. The application states that:
“The SEC’s lawyers were well aware of how TFL and Mr. Kwon had consistently argued that the SEC lacked jurisdiction over both TFL and Mr. Kwon, and never asked the company’s attorneys (Dentons) if it was authorized to accept summonses.”
In addition, the action alleges that the SEC also infringed its own rules regarding the management of these incidents. The summons was made in public, and in fact one of Messari’s Mainnet assistants witnessed the delivery. This is contrary to the SEC’s principles that these formal matters should be kept confidential unless the institution provides otherwise.
The action claims that the summons be considered invalid and also seeks damages, including legal fees and other relief.