Media: SEC launches investigation into UST stablecoin

The U.S. Securities and Exchange Commission (SEC) has launched an investigation into the algorithmic stablecoinTerraUSD (UST), according to Bloomberg, citing sources familiar with the case.

According to the publication, the regulator is investigating whether Terraform Labs, the company behind UST, violated federal investor protection laws during the promotion of the coin.

Terraform Labs representatives said they were not aware of the SEC's investigation into UST.

The media also reported that the SEC questioned the company's employees and found that a few months before the collapse of Terra, the head of Terraform Labs, Do Kwon, began transferring about $80 million of the company's funds monthly to "dozens of cryptocurrency wallets."

In addition, the other day, an American court rejected Do Kwon's appeal and ordered him to cooperate with the authorities' investigation into the Mirror protocol.

Recall that after the collapse of Terra, financial regulatorsSouth Korea held an emergency meeting to assess the impact of the incident. According to media reports, local authorities have begun checking employees of Terraform Labs as part of the investigation.

Read more about what happened to the project and what are the implications for the crypto industry in our exclusive:

Terra's Death Spiral: How and Why LUNA and UST Failed