The purpose of this investigation is to find out if there was a violation of federal investor protection rights before the mind-boggling collapse of a stablecoin in May.
According to Bloomberg, the SEC lawyers began investigating TerraForm Labs company which holds responsibility for TerraUst. Stablecoin should’ve been tied to the U.S dollar with the aid of another token Luna. However, something went wrong and an incredible collapse, which began May 7, turned the tables extremely quickly.
It was a hair-raising situation for all crypto investors around the world. Treasury Secretary Janet Yellen spoke out harshly about such stablecoins that have no legal ground.
SEC will continue to investigate Terraform Labs and its CEO Do Kwon since the latter has already taken serious measures to promote his other project, called the Mirror Protocol through — the worldwide investors can track the price of U.S. shares with its help. No official accusations so far have been issued.
Terraform Labs does not yet know the course of the inspection which is conducted by SEC. The Singapore-based company has not received any official letters about the investigation of TerraUst. However, they are aware of the hitherto fact that SEC is having a look at the Mirror Protocol, according to the company’s representatives.
We’ve reported that global regulators are going to rule the cryptocurrency market with a rod of iron.