DeFi ‘May Not Fit In Nicely’ With Current Regulations

Three days after suing the U.S. Securities and Exchange Commission over receiving a subpoena from the agency, Terraform Labs co-founder and CEO Do Kwon struck a more conciliatory tone about the regulatory landscape.
Speaking at the Yahoo Finance All Markets Summit today, Kwon suggested that friction between regulators and the crypto industry typically leads to “frameworks that are a little bit more accepting of innovation and change.”
On Friday evening, Kwon and Terraform Labs filed a complaint against the SEC in the U.S. District Court for the Southern District of New York claiming that the agency’s issuance of two subpoenas violated the 14th amendment’s due process clause as well as SEC rules and federal regulations. The lawsuit further contends that the agency “could not secure personal jurisdiction over” Singapore-based Terraform Labs or Kwon, but that Kwon and attorneys attended a 5-hour interview in July.
Ultimately, a process server served Kwon with an SEC subpoena on September 20, as he was preparing to speak at the Messari Mainnet conference, according to the lawsuit.
It’s not hard to see why the SEC would be interested in Terraform and Kwon. Last December, the project launched Mirror Protocol, which enables synthetic versions of U.S. stocks and other assets so that people outside America can easily trade them; instead of buying and selling TSLA on the New York Stock Exchange, you can buy and sell mTSLA at nearly identical prices via blockchain .


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