US Judge Directs Genesis to Adhere to Subpoena Amid SEC Lawsuit Against Terraform Labs
Summary:
A US judge has mandated Genesis Global entities to produce certain documents as per a subpoena requested by Terraform Labs. The order is connected to a civil lawsuit filed by the SEC against Terraform and its CEO, Do Kwon. The lawsuit alleges that Terraform and Kwon deceived investors with fraudulent claims about their stablecoin, which contributed to the 2022 crypto crash. Besides, Genesis is facing bankruptcy proceedings with liabilities around $1 billion, and along with Gemini, is embroiled in a separate SEC suit for allegedly offering unregistered securities.
A Genesis Global entities order to produce certain documents has been approved by a U.S. court judge, following a subpoena issued by Terraform Labs, as detailed in the Oct. 13 filing in the Southern District of New York U.S. District Court. This filing stipulates that Genesis was given until Oct. 18 to meet the terms of the subpoena. The subpoena, issued on Sept. 12, required Genesis to provide records by Oct. 9, specifics of which are not clear in the order.
U.S. Securities and Exchange Commission (SEC) initiated the order as part of a civil lawsuit against Terraform Labs and its co-founder and CEO, Do Kwon, which began in February. Kwon is presently serving a four-month sentence in Montenegro for the misuse of travel documents, whilst his legal proceedings carry on in the U.S.
U.S. watchdogs claim that Terraform and Kwon misrepresented investors by making false claims about their algorithmic stablecoin, Terra USD (UST). The fall of Terraform Labs played a pivotal role in the 2022 cryptocurrency market crash, a seismic event that led to the insolvency of FTX, BlockFi, Celsius Network, Voyager Digital, among others.
In January, Genesis sought bankruptcy protection, estimating its liabilities at about $1 billion, compared to assets valued at $10 billion. Both Gemini and Genesis have been sued by the SEC, who allege that they offered unregistered securities through Gemini's Earn program.
The pressure is being ramped up on crypto-related crimes by U.S. law enforcement agencies.
Published At
10/16/2023 7:59:29 PM
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