A U.S. judge has given approval to an order mandating Genesis Global entities to furnish specific documents in response to a subpoena issued by Terraform Labs. This development emerged from a court filing made on October 13 in the U.S. District Court for the Southern District of New York, where Judge Jed Rakoff presided. The judge specified that Genesis must deliver the documents in response to Terraform Labs' subpoena within five days, potentially by October 18. The nature of the documents requested was not entirely clear in the order, but it pertained to documents that Genesis failed to provide by the October 9 deadline as originally stated in a subpoena issued on September 12.
This order is part of the ongoing civil case brought by the U.S. SEC against Terraform Labs and its co-founder and CEO, Do Kwon. Notably, Kwon is currently serving a four-month sentence in Montenegro for the use of fraudulent travel documents, while legal proceedings against Terra are continuing within the United States.
The U.S. regulatory body had previously accused Terraform Labs and Kwon of engaging in misleading and deceptive practices with investors. These misleading actions involved claims about their algorithmic stablecoin, Terra USD (UST). The collapse of the Terra ecosystem served as one of the triggering events of the 2022 cryptocurrency market crash, preceding the bankruptcies of prominent platforms such as FTX, BlockFi, Celsius Network, Voyager Digital, and others.
Genesis had filed for bankruptcy protection back in January, expecting liabilities of approximately $1 billion and assets valued at $10 billion at that time. Additionally, the company, along with the cryptocurrency exchange Gemini, had been the target of a civil lawsuit filed by the SEC in January. Regulators had leveled allegations against these companies for offering unregistered securities via Gemini’s Earn program.
