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Much of the magic behind Terra LUNA and TerraUSDs success has been its widespread adoption in Asian markets. TerraUSD boasts the ability to serve as a base layer Stablecoin for all users looking to switch from one digital asset to another, and those hoping to make some profit off it through the process of arbitrage.
Terra LUNA v. SEC
While 2021 appears to be a successful year for Terraform Labs, — the parent company of Terra LUNA — it has been all but rosy for the three-year-old company founded by South Korean, Do Kwon and Daniel Shim. In November, Terralabs was served with a lawsuit by the US Securities and Exchange Commission (SEC) as part of a string of haphazard clampdowns on possible violators of the US crypto laws.
In the case of Terra LUNA and Terralabs, the SEC alleged it may have violated laws in the launch and operation of its Mirror protocol DeFi, which Terralabs built to create and trade a mirror version of top US exchange stocks known as ‘synthetic stocks’ or mAssets. A total capitalization of over $924.3 million has now been recorded, marking mAssets fast growth and pithing the fledgling initiative at loggerhead with SEC value limit for designated commercial crypto projects.
Do Kwon, Terralabs Fights Back
Following the subpoena issued by the SEC, Do Kwon has come out to declare that both himself and Terralabs are under no obligation to report to the SEC since the company is incorporated in Singapore and not in the US.
 
 
The timing and manner in which the subpoena was served — at a public Mainnet conference — is one of the reasons Do Kwon is suing the SEC for what he believes is a breach of privacy, intent to humiliate, and a lack of jurisdictional powers to compel the company to cooperate.
Gary Gensler’s SEC, in defense, claimed the subpoenas were served in-person to the co-founder making the manner of service valid, and that Terra LUNA does not place restrictions on US customers despite its overseas headquarters, making it answerable to the SEC.
A formal response from the SEC is expected by Friday, 24th of December.
The ongoing legal row will make Terra LUNA the second crypto-asset company to be caught under the SEC’s legal radar, following the highly embattled Ripple Labs (XRP) whose case has continued to linger since 2020.
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