The U.S. Court of Appeals for the Second Circuit on Thursday dismissed a lawsuit filed by Terraform Labs CEO Do Kwon to subpoena the Securities and Exchange Commission (SEC). The federal agency was seeking documents and testimony in connection with an investigation into whether Terra used the Mirror protocol to sell unregistered securities.

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Kwon was served with the subpoena in September 2021 while attending a conference in New York. Kwon argued in an October statement that the SEC violated its own rules, the Administrative Procedure Act, and other rules by personally serving the subpoena. Later he also disputed court jurisdiction over the case due to Terraform’s lack of contact with the United States. This court rejected these claims in February.

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Court of Appeal rules that the subpoena was delivered properly and that the SEC can serve Terraform as a legal entity through Kwon. In addition, the appellate court found that the district court had jurisdiction over Terraform Labs and Kwon.

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The SEC began engaging with Terraform and Kwon on this case in May 2021, according to a petition filed in October. The SEC emailed Kwon requesting his voluntary cooperation in the investigation, and acting on that request, Kwon and his legal representatives spoke with SEC attorneys in July. Terraform’s lawyers were actively negotiating with the SEC at the time the subpoena was served.

In addition to the collapse of the $40 billion Terra ecosystem, Kwon and Terraform have faced allegations of tax evasion and market manipulation in South Korea. local media connected Terraform with money laundering in a May 30 report. A series of tweets a week earlier also leveled accusations of malfeasance against Terraform.

Bloomberg informed On Thursday, citing an unnamed source, the SEC is also investigating whether Terraform violated investor protection rules prior to Terra’s collapse. Terraform told Bloomberg in a statement that it had no knowledge of the investigation.