The SEC’s summons, issued in November, aimed to compel Terraform Labs to answer “fact-finding” questions concerning its DeFi and Mirror protocols (MIR). The mirror protocol, which is still in use, allows users to exchange assets that are linked to the price of US equities. The TFL and Kwon were charged by the SEC with developing, advertising, and proposing to sell assets and MIR tokens to US investors.
TFL was ordered by the court to comply with the SEC’s desires. The ruling also granted TFL a 14-day stay to allow for more briefing or an appeal.
The Court has examined all of the parties’ pleadings and will have oral argument by telephone conference on February 17, 2022. Judge Oetken decided that the SEC’s application had been approved, and Terraform and Kwon have to follow the subpoenas that were sent to them.
Kwon and TFL had sued the SEC for harassment in September, before the SEC issued the summons in November. Kwon stated that the SEC had contacted him through an unusual means. While he was attending a conference in the United States, the SEC presented him with a summons in public, all while the firm was still in discussions with the commission.