An altcoin seems to be in the focus of the US Department of Justice (DoJ) lately. Although FTX has been forgotten lately by Silvergate, Silicon Valley Bank (SVB) and general price drops; The TerraUSD stablecoin is still under the scrutiny of regulators. Here are the details…
This altcoin is under the spotlight in the USA
The U.S. Department of Justice is investigating the TerraUSD stablecoin’s collapse last year, raising the likelihood of criminal charges against the stablecoin’s creator, Do Kwon, the Wall Street Journal reported, citing relevant sources. According to the WSJ, the FBI and the Southern District of New York interviewed former employees of Terraform Labs, the company behind TerraUSD, and wanted to interview others as well.
As we reported on Cryptokoin.com, the SEC filed a civil fraud suit against Kwon and Terraform Labs in Manhattan federal court in February, accusing investors of misleading investors about the risks of TerraUSD. According to the report’s sources, the Ministry of Justice’s investigation covers a similar situation.
Recovery plans for TerraUSD under review
According to a separate report by Bloomberg, citing a person familiar with the matter, a conversation between Manhattan federal prosecutors, leading trading firms Jump Trading Group, Jane Street Group, and Alameda Research, the failed FTX “sister company,” includes a potential bailout of TerraUSD. also examines the debates. Such a rescue operation never took place. However, the investigation is trying to determine whether the firms were involved in possible market manipulation.
TerraUSD and its sister token Luna collapsed in the middle of last year, leading to the failure of leading crypto companies including hedge fund Three Arrows Capital, Voyager Digital and FTX. The AD Justice Department had previously claimed in an indictment against FTX founder Sam Bankman-Fried that an unnamed crypto firm believed to be Jump had bailed TerraUSD once before.
Terra is also being explored in South Korea and Singapore.
It was reported last week that the Singapore police also launched an investigation into Terraform Labs. South Korean prosecutors have been investigating Kwon since May last year and questioning former Terraform personnel. They recently flew to Serbia, Kwon’s last known destination, to ask local authorities to assist with their investigation and accused Kwon of fraud.
Kwon denied all charges against him. He said on the Unchained Podcast in October last year that no scams were committed on Terra-Luna. Terraform Labs’ crypto project collapsed in May of last year after the Terra stablecoin lost its $1 stablecoin. The value of the ecosystem’s LUNA cryptocurrency has dropped from about $120 to zero.
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