Hot Development: US Justice Department Investigates Do Kwon and TerraUSD (UST) Stablecoin Collapse

Sources familiar with the matter said that the US Department of Justice is investigating the collapse of the TerraUSD stablecoin last year and that TerraUSD’s founder is South Korean. cryptocurrency He said the US risks criminal charges against his entrepreneur, Do Kwon.

FBI and SDNY Question Terraform Labs Employees, According to Sources

Sources familiar with the matter said the FBI and the Southern District of New York (SDNY) had questioned former team members of Kwon’s company, Terraform Labs, in recent weeks and wanted to meet with others. The FBI and SDNY are part of the US Department of Justice, and the SDNY often plays a role in high-profile prosecutions of financial crimes.

Representatives from Terraform Labs and the US Department of Justice declined to comment on the matter.

Last month, the Securities and Exchange Commission (SEC) filed a fraud lawsuit against Kwon and Singapore-based Terraform Labs in Manhattan federal court. In the lawsuit, Kwon and the firm were accused of misleading investors about the risks of TerraUSD, a stablecoin designed to maintain a $1 price.

Sources on the matter said the US Department of Justice’s investigation covered similar areas as the SEC case. Some sources said that among the issues investigators asked was the relationship between Chai, a South Korean payment app, and the underlying blockchain Terraform built to power TerraUSD.

It was not known what charges the US Department of Justice brought. There is also the possibility that prosecutors drop the investigation without filing a criminal complaint.

*Not investment advice.