Key Takeaways
- Genesis alleged to have withheld specific documents tied to the sudden downfall of TerraUSD.
- Genesis has a strict five-day deadline from October 13th to produce the requested documents
In a noteworthy legal development, a district judge in New York has directed cryptocurrency lending firm Genesis to comply with a subpoena. This action comes in response to Genesis allegedly withholding specific documents linked to the sudden downfall of algorithmic stablecoin TerraUSD.
Judge Jed Rakoff of the U.S. District Court for the Southern District of New York issued a firm and unequivocal order. Genesis has a five-day timeframe, commencing from October 13th, to provide the requested documents, as they had previously failed to do so by the initial October 9th deadline.
The order explicitly states, “The Court grants the Defendants’ motion to enforce the Subpoenas and orders the Genesis Entities to produce, within five (5) days of this Order being served on the Genesis Entities, all documents that are responsive to the Subpoenas.”
This legal development is directly related to the U.S. Securities and Exchange Commission’s (SEC) civil case against Terraform Labs and its co-founder and CEO, Do Kwon. The SEC initiated this case back in February. Notably, Do Kwon is currently serving a four-month prison sentence in Montenegro due to his use of falsified travel documents, while the lawsuit against Terra is ongoing in the United States.
Genesis Global Capital found itself in financial turmoil earlier this year, with several of its entities seeking Chapter 11 bankruptcy protection in January. Court filings estimated the lender’s assets and liabilities to be in the range of $1 billion to $10 billion.
This legal development adds complexity to the ongoing investigation into the TerraUSD collapse, garnering attention from regulators and the cryptocurrency industry. Genesis now faces a crucial five-day deadline to comply with the subpoena, a significant step in shedding light on the events leading to the TerraUSD collapse.
