Report: DOJ and FBI Investigating Terraform Labs in Connection to Algorithmic Stablecoin Collapse
The Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) are reportedly investigating the collapse of the algorithmic stablecoin terra usd (UST) and the firm Terraform Labs. Unnamed sources say that former staff members from Terraform Labs, the company behind the Terra blockchain project, have been questioned by U.S. law enforcement. Unusual Relationship: Report Claims Terraform Labs and South Korean Payment Firm Chai Under U.S. Investigation
After the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against 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 Street Journal’s Alexander Osipovich reports that people familiar 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 team. USTUSDC chart by TradingView
According to sources, the DOJ’s probe is not much different from the SEC’s allegations, and investigators are also looking into the relationship between Terraform Labs (TFL) and the South Korean payment firm Chai. The co-founder of TFL, Daniel Shin, created the payment firm Chai, and it has been alleged that the company helped Terra launder funds. Several social media reports have shown that Terraform Labs and Chai had an unusual relationship. In mid-November 2022, it was reported that South Korean investigators were probing Chai and Daniel Shin.
Osipovich noted that the WSJ contacted the SDNY DOJ and Terraform Labs, but both declined to comment. The report also noted that it “couldn’t be learned what specific charges” the DOJ may be pursuing, and the case could be dropped. Do Kwon’s lawyer and the attorney for TFL are attempting to get the SEC lawsuit dismissed, and Kwon vehemently denies committing fraud. Kwon has not been active on social media since February 1, 2023.
Currently, the once-stablecoin Terra USD (UST), now referred to as USTC, is trading for $0.023 per unit. Terra’s former native asset, LUNA, now referred to as Luna Classic (LUNC), is priced at $0.00013233 per coin on Tuesday. Furthermore, the second iteration of Terra’s native crypto asset, LUNA 2.0, is exchanging hands today for $1.42 per unit. TFL CEO Do Kwon was living in Singapore, but his whereabouts are currently unknown. Prosecutors from South Korea think that Kwon may be in Dubai and possibly even Serbia. Tags in this story Alexander Osipovich, Algorithmic stablecoin, Blockchain, CHAI, Charges, co-founder, Cryptocurrency, Daniel Shin, dismissal, DOJ, Dubai, FBI, Fraud, Investigation, investigators, lawyer, LUNA, Luna 2.0, Money Laundering, multibillion-dollar, probe, relationship, SDNY, SEC, securities fraud, Serbia, Social Media, South Korea, south korean, Terra USD, terraform labs, TFL CEO, unusual, UST, Wall Street Journal
What do you think the outcome of the DOJ and FBI investigation into Terraform Labs will be? Share your thoughts in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today. Moody"s Downgrades US Banking Sector to Negative After Collapse of Three Major Banks NEWS | 2 hours ago Federal Investigators Probe Silicon Valley Bank Collapse; SVB and Top Execs Sued by Shareholders NEWS | 4 hours ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleAlchemy Pay Partners With ZD Group, Parent Company of Mouette Securities, Shares Four Hong Kong Licenses and Receives Its Investment Next articleBiggest Movers: LTC Back Above $80, DOGE Extends Gains Following Inflation Report Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItCentral Bank of Brazil Confirms It Will Run a Pilot Test for Its CBDC This Year
The Central Bank of Brazil has confirmed that the institution will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. Roberto Campos Neto, president of the bank, also stated that this ... read more.Tony Hawk"s Latest NFTs to Come With Signed Physical Skateboards Following a Brief Fee Spike, Gas Prices to Move Ethereum Drop 76% in 12 Days Australia to List Bitcoin ETF After 4 Clearinghouse Participants Commit to Meet Stringent Margin Terms Microbt Reveals Latest Bitcoin Mining Rigs — Machines Produce up to 126 TH/s With Custom 5nm Chip Design