Terraform Labs and Terra's Founder Do Kwon are now required to comply with investigations by the US Securities and Exchange Commission (SEC) into Mirror Protocol after a US court overruled Kwon's appeal.
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According to Law360, Kwon now has to hand over documents related to the Mirror Protocol and personally provide testimony to the SEC. The watchdog wants to find out whether Terraform Labs and Kwon violated federal securities laws in their participation in the creation, promotion, and offer to sell various tokens related to the Mirror Protocol, a decentralized finance protocol on Terra that allowed users to exchange tokenized stocks.
The Terraform Labs CEO claimed that Mirror Protocol's lacked US clients as only 15% of them were from the US. But the US court took the SEC's stand, which emphasized that Terraform Labs focused its marketing on US consumers.
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