US District Judge Rejects Do Kwon and Terraform’s Requests in SEC Investigation

On April 18th, according to court records, US District Judge Jed Rakoff rejected the requests of Do Kwon and Terraform during Friday’s hearing. Do Kwon and his company had previously requested an order to force the SEC to withdraw the documents it had requested from the defendant and Luna Foundation Guard from Singapore’s regulatory authorities. It is currently unclear which records the US Securities and Exchange Commission requests from Singapore, but Terraform is headquartered in Singapore.

US judge ruled that the SEC can request Do Kwon related case documents from Singapore regulatory authorities

Introduction

On April 18th, 2021, US District Judge Jed Rakoff rejected the requests of Do Kwon and Terraform during Friday’s hearing regarding a Securities and Exchange Commission (SEC) investigation. The defendants had previously requested an order to force the SEC to withdraw the documents it had requested from the defendant and Luna Foundation Guard from Singapore’s regulatory authorities. In this article, we will explore the details of this case and examine its potential impact.

The Background of the Case

Do Kwon is a prominent figure in the technology industry, having co-founded Terraform Labs, the company behind the Terra blockchain. In December 2020, news broke that Terraform Labs was under investigation by the SEC. The investigation was triggered by Terraform’s initial coin offering (ICO), in which the company raised $32 million in funding. The SEC is looking into whether Terraform Labs broke any securities laws or regulations during its ICO and other fundraising activities.

Do Kwon and Terraform’s Requests

In February 2021, Do Kwon and Terraform made a request to the court, asking for an order to force the SEC to withdraw documents it had requested from the defendants and Luna Foundation Guard. Terraform is headquartered in Singapore, and the records requested were from Singapore’s regulatory authorities.
The defendants argued that the records requested by the SEC were irrelevant to the case and could harm their reputation. They claimed that the SEC’s requests were overly broad and violated their privacy rights. However, the court rejected their requests, stating that the records were relevant to the case and did not pose any undue burden to the defendants.

The Implications of the Judge’s Decision

The judge’s decision is a blow to Do Kwon and Terraform’s efforts to limit the scope of the SEC’s investigation. The defendants had hoped that the court would restrict the SEC’s access to information, but the judge’s ruling allows the SEC to continue its investigation unimpeded.
The decision also serves as a reminder that regulatory agencies have broad powers and can access information from multiple jurisdictions. In today’s digital age, it’s easier than ever before for regulators to collect data from around the world, and companies must be prepared to comply with requests from regulatory authorities in multiple jurisdictions.

Conclusion

The SEC’s investigation into Terraform Labs and Do Kwon is ongoing, and it remains to be seen what the outcome will be. However, the judge’s decision to reject Do Kwon and Terraform’s requests is a reminder that regulatory agencies have broad powers and can access information from multiple jurisdictions. Companies must be prepared to comply with requests from regulatory authorities, including those in other countries.

FAQs

1. What is the SEC investigating in the Terraform case?
The SEC is investigating Terraform Labs’ initial coin offering (ICO), in which the company raised $32 million in funding, and other fundraising activities.
2. Why did Do Kwon and Terraform request that the SEC withdraw documents?
They claimed that the records requested were irrelevant to the case and could harm their reputation. They also argued that the SEC’s requests were overly broad and violated their privacy rights.
3. What is the significance of the judge’s decision?
The decision allows the SEC to continue its investigation unimpeded and serves as a reminder that regulatory agencies have broad powers and can access information from multiple jurisdictions.