The collapse of the TerraClassicUSD (USTC) stablecoin, which caused a $40 billion wipeout in the Terra ecosystem last May, is apparently being looked into by the US Justice Department.
According to a March 13 Wall Street Journal story, the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Southern District of New York have both recently questioned former Terraform Laboratories employees.
According to persons familiar with the situation, the investigation is identical to a lawsuit that the US Securities and Exchange Commission filed on February 16 against Terraform Laboratories and its founder Do Kwon.
The connection between Chai, a South Korean payment platform, and the Terra blockchain, on which USTC operated, was one of the subjects that investigators have inquired about.
In its filing, the SEC said that Kwon had deceived investors into thinking that Chai transactions were carried out on the Terra blockchain.
In its lawsuit, the SEC charged Kwon with deceiving investors about the dangers associated with the algorithm-based stablecoin that is intended to be pegged 1:1 to the US dollar.
Do Kwon discussed Terra at a conference before LUNC and USTC went under. Source: Terra
What particular allegations the Justice Department may bring forth is unknown. There is no guarantee that charges will be brought based solely on the investigation.
Kwon apparently departed South Korea after the fall and traveled to Singapore, Dubai, and now Serbia, where he is presently thought to be, according to South Korean officials. Recently, two South Korean officials were dispatched to Serbia to look for Kwon, but their efforts to do so were fruitless.
Nonetheless, Kwon insists he is not “on the run” despite the South Korean prosecutors issuing Kwon an arrest order on September 14 and Interpol, the international law enforcement organization, filing a red notice on September 26.
I am not “on the run” or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide
— Do Kwon 🌕 (@stablekwon) September 17, 2022
What particular allegations the Justice Department may bring forth is unknown. There is no guarantee that charges will be brought based solely on the investigation.
Kwon apparently departed South Korea after the fall and traveled to Singapore, Dubai, and now Serbia, where he is presently thought to be, according to South Korean officials. Recently, two South Korean officials were dispatched to Serbia to look for Kwon, but their efforts to do so were fruitless.
Nonetheless, Kwon insists he is not “on the run” despite the South Korean prosecutors issuing Kwon an arrest order on September 14 and Interpol, the international law enforcement organization, filing a red notice on September 26.
