The Securities and Exchange Commission is reportedly probing Terraform Labs on whether its marketing of the TerraUSD stablecoin before it crashed last month violated federal investor-protection regulations, according to a Bloomberg report. The SEC is also looking into whether the company broke any securities and investment products rules.
On top of the new investigation, Terraform is also battling an ongoing investigation from the SEC relating to whether the crypto company was involved in selling unregistered securities through the Mirror Protocol.
Terraform argued in the ongoing investigation that the SEC lacked jurisdiction over the company and founder Do Kwon, since the company is based in Singapore and Kwon is a South Korean national residing in Singapore. An appeals court ruled that Terraform would have to comply with the SEC's requests, as the company was in business with U.S.-based consumers, investors, employees and entities.
Terraform doesn’t look like it's getting off scot-free elsewhere either. South Korean law enforcement agencies are investigating Terraform Labs and its ecosystem, including its founders, alleging that an estimated 280,000 citizens were affected by the stablecoin collapse.
The Seoul Metropolitan Police Agency is also investigating a Terraform employee for allegedly embezzling bitcoin from the company’s treasury.
Singapore's Straits Times noted last month that a police report had been filed against Terraform Labs in connection with the collapse of UST but reported that police were not investigating the company. The Monetary Authority of Singapore's list of enforcement actions did not show any actions against Kwon or Terraform as of Thursday.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE