The Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) are reportedly investigating the collapse of the algorithm stablecoin Terra usd (UST) and company Terraform Labs. According to unnamed sources, former staff members of Terraform Labs, which promoted the Terra blockchain project, have been questioned by U.S. law enforcement authorities.
An unusual relationship; Terraform Labs and South Korean payments company Chai are under investigation in the U.S., reports
The DOJ and FBI are reportedly investigating Terraform Labs after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit accusing Terraform Labs and its CEO Do Kwon of fraud and orchestrating a “multibillion-dollar crypto asset securities fraud,” Wall Street Journal’s Alexander Osipovichreported in detail that people familiar with the matter have reported that the FBI and the Southern District of New York Department of Justice are questioning former members of the Terraform Labs team.
According to sources, the DOJ investigation 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 company Chai. Daniel Shin, a co-founder of TFL, founded the payment company Chai, and the company allegedly helped Terra allegedly helped launder it. Multiplesocial mediareportsrevealed an unusual relationship between Terraform Labs and Chai; in mid-November 2022, it was reported that Korean investigators were looking into Chai and Daniel Shin.
Osipovich noted that the WSJ contacted the DOJ and Terraform Labs at SDNY, but both declined to comment. The report also noted that the DOJ is “unsure of the specific charges” it will pursue and that the case may be dropped.Do Kwon’s attorneys and TFL’s attorneys are attempting to dismiss the SEC’s case, and Kwon vehemently denies any fraudulent activity.Kwon has been on the job since February 2023. 1 and has not been active on social media since.
Currently, the former stablecoin Terra USD (UST), now called USTC, is trading at $0.023 per unit; Terra’s former native asset, LUNA, now called Luna Classic (LUNC) is priced at $0.00013233 per coin on Tuesday. Additionally, LUNA 2.0, the second iteration of Terra’s native crypto assets, is changing hands today at $1.42 per unit.TFL CEO Do Kwon lived in Singapore, but his whereabouts are currently unknown. Korean prosecutors believe that Kwon may be in Dubai and possibly Serbia.
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