Court orders Genesis to produce subpoenaed documents in Terraform Labs case

Genesis and its associated companies were ordered by a judge to produce documents on Oct. 13, as part of a securities case initiated by the U.S. Securities and Exchange Commission (SEC) against Terraform Labs.

The U.S. Securities and Exchange Commission (SEC) initiated proceedings against Terraform Labs, the creator of the failed TerraUSD stablecoin, in February 2023.

Later, on Sept. 12, Terraform Labs attempted to subpoena three companies under the Genesis umbrella: Genesis Global Capital, Genesis Global Holdco, and Genesis Global Trading. The subpoena required Genesis to provide the relevant information by Oct. 9.

Genesis apparently failed to comply, as the judge’s latest order indicates that Genesis has not produced the relevant documents or, in fact, responded to the subpoena at all. The order says that the court can enforce the subpoena as both it and Genesis’ offices are located in the same district of New York. The latest order says that Genesis must produce the relevant documents within five days of the order being served.

The specific information sought through the subpoena is yet to be made public. Nor is it clear how Terraform Labs and Genesis were involved with each other. Terraform Labs has also attempted to subpoena other parties, including FTX and Michael Arrington.

Genesis and Terraform have experienced failures

Each firm has experienced significant failures while remaining partially operational. Terraform Labs dissolved its Korean offices in 2021, months before TerraUSD lost virtually all of its value. Terraform Labs, nevertheless, has avoided bankruptcy.

The lending arm of Genesis, meanwhile, filed for bankruptcy in January 2023. Though Genesis’ other divisions remained operational, the company announced in September that it would soon halt all trading services. It is unclear to what extent Genesis’ various divisions are still operational and providing other services.

Though the current case concerns an SEC complaint against Terraform Labs, the SEC filed a separate case against Genesis in January. Genesis attempted to dismiss that case in May but has not succeeded.