The U.S Court of Appeals for the Second Circuit rejected Terraform Labs CEO Do Kwon’s dispute of a subpoena by the Securities and Exchange Commission .
The federal agency was seeking documentation and testimony in connection with its investigation of whether Terra used the Mirror Protocol to sell unregistered securities.
Do Kwon was served with the subpoena while he was attending a conference in New York City. He claimed in a filing that the SEC had violated its own rules, the Administrative Procedure Act and other regulations by serving the subpoena in person. He later disputed the court’s jurisdiction over the case due to Terraform Labs lack of contact with the United States.
The appeals court ruled that the subpoena was properly served and that the SEC could serve Terraform as a corporate entity through Kwon. Furthermore, the appeals court found that the district court did have jurisdiction over Terraform Labs and Kwon.
Besides the collapse of the $40 billion Terra ecosystem, Kwon and Terraform have faced charges of tax evasion and market manipulation in South Korea.
