Chain News Update, the Securities and Exchange Commission (SEC) announced that it filed a subpoena enforcement action against Terra development company Terraform Labs and its co-founder and CEO Do Kwon, requiring Terra to comply with investigative subpoenas regarding documents and testimony, and is investigating whether Terraform Labs, Do Kwon violated federal securities law rules, including unregistered sales of securities, unregistered broker or dealer, and unregistered investment companies engaging in securities transactions. However, the SEC is currently continuing its fact-finding investigation and, to date, has not concluded that any individual or entity has violated the federal securities laws.

The SEC states that based on the investigation currently underway, there is reason to believe that Terraform Labs and Do Kwon promoted and sold distributions of mAssets and MIR tokens to U.S. investors. The filing will further seek a court order directing Terraform Labs and Kwon to fully comply with the subpoena upon a ruling.