Report: DOJ and FBI Investigating Terraform Labs in Connection to Algorithmic Stablecoin Collapse

The Division of Justice (DOJ) and the Federal Bureau of Investigation (FBI) are reportedly investigating the collapse of the algorithmic stablecoin terra usd (UST) and the agency Terraform Labs. Unnamed sources say that former employees members from Terraform Labs, the corporate behind the Terra blockchain venture, have been questioned by U.S. legislation enforcement.

Uncommon Relationship: Report Claims Terraform Labs and South Korean Fee Agency Chai Underneath U.S. Investigation

After the U.S. Securities and Trade Fee (SEC) filed a lawsuit towards Terraform Labs and its CEO, Do Kwon, accusing them of fraud and orchestrating “a multibillion-dollar crypto-asset securities fraud,” the DOJ and FBI are allegedly investigating Terraform Labs. The Wall Road Journal’s Alexander Osipovich reports that folks acquainted with the matter have detailed that the FBI and the Southern District of New York DOJ have been questioning former members of the Terraform Labs crew.

In response to sources, the DOJ’s probe will not be a lot totally different from the SEC’s allegations, and investigators are additionally trying into the connection between Terraform Labs (TFL) and the South Korean cost agency Chai. The co-founder of TFL, Daniel Shin, created the cost agency Chai, and it has been alleged that the corporate helped Terra launder funds. Several social media reports have proven that Terraform Labs and Chai had an uncommon relationship. In mid-November 2022, it was reported that South Korean investigators had been probing Chai and Daniel Shin.

Osipovich famous that the WSJ contacted the SDNY DOJ and Terraform Labs, however each declined to remark. The report additionally famous that it “couldn’t be realized what particular fees” the DOJ could also be pursuing, and the case may very well be dropped. Do Kwon’s lawyer and the lawyer for TFL are trying to get the SEC lawsuit dismissed, and Kwon vehemently denies committing fraud. Kwon has not been energetic on social media since February 1, 2023.

At the moment, the once-stablecoin Terra USD (UST), now known as USTC, is buying and selling for $0.023 per unit. Terra’s former native asset, LUNA, now known as Luna Traditional (LUNC), is priced at $0.00013233 per coin on Tuesday. Moreover, the second iteration of Terra’s native crypto asset, LUNA 2.0, is exchanging palms as we speak for $1.42 per unit. TFL CEO Do Kwon was residing in Singapore, however his whereabouts are presently unknown. Prosecutors from South Korea suppose that Kwon could also be in Dubai and probably even Serbia.

What do you suppose the end result of the DOJ and FBI investigation into Terraform Labs can be? Share your ideas within the feedback part beneath.