Do Kwon, the CEO of Terraform Labs, issued a complaint against the Securities and Exchange Commission of the United States (SEC). Kwon and Terraform Labs’ complaint confirms that Terraform Labs’ creator of the DeFi technology verified he received an SEC subpoena during Messari’s Mainnet conference last month.
According to the complaint, the case dates all the way back to a May 2021 email from the SEC’s Enforcement Division to Kwon. There is a dispute over Terra’s Mirror Protocol, a decentralized financial (DeFi) platform on which synthetic equities reflecting the price of big U.S. corporations are issued and exchanged.
Kwon has been subpoenaed to testify before US authorities. Kwon, who is a South Korean citizen, disagrees.
An Unusual Set of Subpoenas
There are two subpoenas that were unlawfully issued and served, according to Terraform Labs and Kwon’s subpoena to the SEC, submitted on Friday. In addition, the inquiry of Terraform’s Mirror Protocol was not kept discreet, according to the report. According to the complaint, Mr. Kwon was served with subpoenas in the open.
Terra USD, the algorithmic stablecoin from Terraform Labs, maintains its dollar peg by burning LUNA, a secondary currency that is presently the 12th-largest cryptocurrency in terms of market capitalization.
Stablecoins have the interest of the SEC and other financial authorities, but it’s Terraform Labs’ Mirror Protocol project that has the agency’s attention. The Mirror Protocol (not to be confused with the crypto blogging site Mirror) was launched in December 2020 as a platform for the creation of synthetic copies of equities. Mirror Protocol is not a blogging platform. Stablecoins are a kind of synthetic asset, however this one tracks the price of equities rather than currencies. As a result, rather than purchasing Tesla stock, investors may instead choose to purchase mTSLA.
What is Terra Protocol?
In order to create a currency that can be algorithmically coded across several blockchains, the Terra Protocol is being developed. Terra Protocol includes a crypto-asset called LUNA that acts as a native stabilizer, and it’s quite similar to its more well-known counterpart, Maker (MKR). Binance Labs has provided financial support for the project.
TerraUSD’s (UST) market value has risen to $2.75 billion in the past year, a remarkable achievement considering the stablecoin was just created a year ago.
It was created by a group of 15 big Asian e-commerce companies, and it serves over 30 million clients. Performance, scalability, and competitiveness are given top priority in the ecosystem’s design and implementation phases.
XRP Arrington Capital raised $32 million in its March 2019 ICO from investors like as Hashed, Polychain Capital, Huobi, and others. The Chai payments app, which has over a million downloads on the Google Play store, is at the heart of Terra’s primary offering. Customers may earn points that can be redeemed for gifts from participating businesses by shopping with Chai and its partners.
Collaborations have already been inked with TMon, Qoo10, Yanolja, Megabox, and Musinsa among others. These companies reward Chai members for their marketing efforts by offering incentives. Moreover, the Chai Card, a new debit card, was just unveiled. SoftBank and Hanwha Investment & Securities made a $60 million Series B investment in Chai.