Federal judge gives Genesis 5 days to comply with Terraform Labs subpoena
A United States judge has approved an order requiring Genesis Global entities to produce certain documents in accordance with a subpoena requested by Terraform Labs.
In an Oct. 13 filing in U.S. District Court the Southern District of New York, Judge Jed Rakoff said Genesis would have 5 days — likely until Oct. 18 — to produce documents following a subpoena from Terraform. According to the filing, Genesis failed to provide records by Oct. 9 as was required by an Sept. 12 subpoena, though the order was unclear as to what documents the crypto firm was seeking.
The order was part of the U.S. Securities and Exchange Commission’s (SEC) civil case against Terraform and co-founder and CEO Do Kwon first filed in February. Kwon is currently serving a four-month prison sentence in Montenegro for using falsified travel documents while the lawsuit against Terra continues in the United States.
Related: Terraform Labs contends Citadel Securities had a hand in its stablecoin collapse
U.S. regulators have alleged Terra and Kwon “misled and deceived investors” with claims about its algorithmic stablecoin Terra USD (UST). The collapse of Terraform Labs was one of the precipitating events in the crypto market crash of 2022, prior to the bankruptcies of FTX, BlockFi, Celsius Network, Voyager Digital, and others.
Genesis filed for bankruptcy protection in January, estimating its liabilities to be roughly $1 billion with $10 billion in assets at the time. Both the firm and cryptocurrency exchange Gemini have been the targets of a civil suit filed by the U.S. Securities and Exchange Commission in January. The regulator alleged the companies offered unregistered securities through Gemini’s Earn program.
Magazine: US enforcement agencies are turning up the heat on crypto-related crime
According to the US Department of Justice, Wolf Capital’s co-founder has pleaded guilty to wire fraud conspiracy for luring 2,800 crypto investors into a Ponzi scheme.
Making Britain better off will be “at the forefront of the chancellor’s mind” during her visit to China, the Treasury has said amid controversy over the trip.
Rachel Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned venture because of market turmoil at home.
The past week has seen a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
The Tories have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats say she should stay in Britain and announce a “plan B” to address market volatility.
However, Ms Reeves has rejected calls to cancel the visit, writing in The Times on Friday night that choosing not to engage with China is “no choice at all”.
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The chancellor will be accompanied by Bank of England governor Andrew Bailey and other senior executives.
She will meet with her counterpart, Vice Premier He Lifeng, in Beijing on Saturday to discuss financial services, trade and investment.
She will also “raise difficult issues”, including Chinese firms supporting Russia’s invasion of Ukraine and concerns over constraints on rights and freedoms in Hong Kong, the Treasury said.
But it did not mention whether Ms Reeves would raise the treatment of the Uyghur community, which Downing Street said Foreign Secretary David Lammy would do during his visit last year.
Britain’s Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi in Beijing. Pic: AP
On Friday, Culture Secretary Lisa Nandy defended the trip, telling Sky News that the climbing cost of government borrowing was a “global trend” that had affected many countries, “most notably the United States”.
“We are still on track to be the fastest growing economy, according to the OECD [Organisation for Economic Co-operation and Development] in Europe,” she told Anna Jones on Sky News Breakfast.
“China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.”
Read more – Ed Conway analysis: The chancellor’s gamble with China
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Nandy defends Reeves’ trip to China
However, former prime minister Boris Johnson said Ms Reeves had “been rumbled” and said she should “make her way to HR and collect her P45 – or stay in China”.
While in the country’s capital, Ms Reeves will also visit British bike brand Brompton’s flagship store, which relies heavily on exports to China, before heading to Shanghai for talks with representatives across British and Chinese businesses.
It is the first UK-China Economic and Financial Dialogue (EFD) since 2019, building on the Labour government’s plan for a “pragmatic” policy with the world’s second-largest economy.
Sir Keir Starmer was the first British prime minister to meet with China’s President Xi Jinping in six years at the G20 summit in Brazil last autumn.
Relations between the UK and China have become strained over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks.
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How much do we trade with China?
Navigating this has proved tricky given China is the UK’s fourth largest single trading partner, with a trade relationship worth almost £113bn and exports to China supporting over 455,000 jobs in the UK in 2020, according to the government.
During the Tories’ 14 years in office, the approach varied dramatically from the “golden era” under David Cameron to hawkish aggression under Liz Truss, while Rishi Sunak vowed to be “robust” but resisted pressure from his own party to brand China a threat.
The Treasury said a stable relationship with China would support economic growth and that “making working people across Britain secure and better off is at the forefront of the chancellor’s mind”.
Ahead of her visit, Ms Reeves said: “By finding common ground on trade and investment, while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
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