Genesis Ordered to Comply With Terra Subpoena Within 5 Days

The crypto lender and trading firm failed to comply with requests made as part of a probe into Do Kwon's collapsed stablecoin, a New York judge said

AccessTimeIconOct 16, 2023 at 4:00 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Genesis, a crypto lender and trading company, has been ordered by a New York court to comply with a subpoena within five days after apparently failing to respond by a previous Oct. 9 deadline relating to the 2022 collapse of the terraUSD stablecoin.

The dramatic failure of terraUSD, a cryptocurrency supposedly tied to the value of the U.S. dollar, sent shockwaves through crypto markets, and the Securities and Exchange Commission subsequently sued Terraform Labs, the company behind the token, and co-founder Do Kwon for misleading investors.

“As of today, the Genesis Entities have failed to produce any documents in response to the subpoenas,” Judge Jed Rakoff said in a court order dated Friday referring to legal requests for information sent by the defendants to Genesis Global Capital, Genesis Global Holdco and Genesis Global Trading on Sept. 12. Genesis shares a parent company with CoinDesk, Digital Currency Group.

The information sought isn’t detailed in the court order. The company made billions in loans to now-defunct hedge fund Three Arrows Capital, which was exposed to the stablecoin. Three Genesis entities filed for bankruptcy in January 2023 and the trading arm shuttered its U.S. spot market business in September.

Rakoff is also grappling with how to extract information from Kwon in connection with the case. Kwon’s lawyers have argued he can’t come to the U.S. as he is serving a jail sentence in Montenegro for possession of a fake passport, but “the laws of physics do not make it impossible for him” to be deposed, Rakoff said in a September order, warning that Kwon wouldn’t be allowed to make any declaration in the case without having been available for cross-questioning.

A spokesperson for Genesis did not immediately respond to a request for comment.

Edited by Sheldon Reback.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.