Bankruptcy judge signs off on order allowing Terraform Labs to subpoena FTX crypto entities.
Bankruptcy judge signs off on order allowing Terraform Labs to subpoena FTX entities

Crypto Exchange FTX Bankruptcy Case

A ruling from the bankruptcy court overseeing FTX’s case has allowed Terraform Labs to issue subpoenas in order to collect evidence for their defense against the US Securities and Exchange Commission’s (SEC) fraud allegations. On July 31, Judge John Dorsey granted permission for the subpoenas to be served to FTX Trading and FTX US. According to the court order, FTX can designate any production in response to the subpoenas in accordance with the Protective Order entered in the SEC Action or any confidentiality agreement between FTX and Terraform Labs.

FTX’s lawyers agreed to the court order without any objections and Terraform Labs requested to subpoena records related to digital wallets used by short sellers connected to FTX entities in May 2022, during the time of its failure.

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In 2022, Terraform Labs became one of the first crypto firms to collapse, leading to a major market crash and causing the price of many tokens to plummet. FTX declared bankruptcy in November of that year.

Do Kwon, one of the co-founders of Terra, is currently serving a four-month sentence in a Montenegrin prison after being convicted of using false travel documents. He may also face extradition to the United States or South Korea for crypto scam related charges.

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