Terraform Labs CEO Do Kwon is suing the U.S. Securities and Exchange Commission (SEC).
The builder of decentralized finance (DeFi) platform Terra confirmed he was served with an SEC subpoena at Messari’s Mainnet conference last month, according to a lawsuit filed Friday.
The matter stretches back to May 2021, when SEC’s Enforcement Division emailed Kwon, according to the filing.
At issue is Terra’s Mirror protocol, a decentralized finance (DeFi) protocol in which synthetic stocks mirroring the price of major U.S. firms are minted and traded.
Read more: Terra Brings 24-Hour Trading to Synthetic Versions of Stocks Like TSLA and AAPL
The subpoena request that Kwon provide testimony to U.S. regulators. As a resident of South Korea Kwon is contesting that.
Terraform’s suit against the SEC is unusual but, according to crypto lawyer Stephen Palley, preemptive legal action might make sense in this case.
“It’s a reminder to regulators that there are rules of engagement that they need to abide by as well,” Palley told CoinDesk.
Nikhilesh De and Cheyenne Ligon contributed reporting.
This is a developing story and will be updated.