DOJ and FBI Investigate Terraform Labs in Connection with Stablecoin Algorithmic Collapse – Bitcoin News

DOJ and FBI Investigate Terraform Labs in Connection with Stablecoin Algorithmic Collapse – Bitcoin News

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 former employees of Terraform Labs, the company behind the Terra blockchain project, have been questioned by US law enforcement.

Unusual relationship: Report claims Terraform Labs and South Korean payments firm Chai under US investigation

After the US Securities and Exchange Commission (SEC) filed a lawsuit against Terraform Labs and its CEO, Do Kwon, accusing them of fraud and orchestrating “a multi-billion dollar crypto-asset securities scam”, the DOJ and FBI are reportedly investigating Terraform Labs. The Wall Street Journal’s Alexander Osipovich reports that people familiar with the matter have described the FBI and Southern District of New York DOJ questioning former members of the Terraform Labs team.

According to sources, the DOJ’s investigation is not much different from the SEC’s allegations, and investigators are also looking into the relationship between Terraform Labs (TFL) and South Korean payment firm Chai. TFL co-founder Daniel Shin set up payments firm Chai, and it has been alleged that the company helped Terra launder funds. Several Social Media reports has shown that Terraform Labs and Chai had an unusual relationship. In mid-November 2022, it was reported that South Korean investigators were investigating Chai and Daniel Shin.

See also  Robinhood users can now transfer Bitcoins

Osipovich noted that the WSJ contacted the SDNY DOJ and Terraform Labs, but both declined to comment. The report also noted that it “could not be learned what specific charges” the DOJ might pursue, and the case could be dismissed. Do Kwon’s attorney and the attorney for TFL are trying to get the SEC lawsuit dismissed, and Kwon vehemently denies any fraud. Kwon has not been active on social media since February 1, 2023.

Currently, one-time stablecoin Terra USD (UST), now referred to as USTC, is trading at $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 original crypto asset, LUNA 2.0, is changing hands today for $1.42 per unit. TFL CEO Do Kwon lived in Singapore, but his whereabouts are currently unknown. South Korean prosecutors believe 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, resignation, 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 Korea , 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 editor at News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for News about the disruptive protocols emerging today.

Image credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly responsible for damages or losses caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *