WSJ: US Department of Justice is investigating the collapse of Terra

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The U.S. Department of Justice is investigating last year's collapse of the TerraUSD stablecoin, the Wall Street Journal reports, citing sources familiar with the situation.

The Federal Bureau of Investigation (FBI) and the Southern District of New York (SDNY) have already questioned former Terraform Labs employees who dealt with the USTC stablecoin. Investigators talked about the relationship between the South Korean payment platform Chai and the Terra blockchain, on which USTC operated.  

The U.S. Securities and Exchange Commission (SEC) insists that the founder of the Luna/Terra project, Do Kwon, misled investors into believing that Chai transactions were processed on the Terra blockchain.

Neither Terraform Labs nor representatives of the U.S. Attorney's Office commented to the media on the information about the searches. 

In February, the SEC filed against Terraform Labs and BeforeKwon is being sued for “organizing a multibillion-dollar fraud.” The SEC statement highlighted that Terraform Labs offered and sold “an interconnected set of digital securities in unlawful transactions.” The regulator draws attention to the fact that the collapse of the algorithmic stablecoin UST resulted in the creation of the Terra Classic (LUNC) token. 

The whereabouts of company founder Do Kwon is currently unknown. Presumably he may be in Serbia. 

Do Kwon still denies any responsibility for the collapse of the Terra ecosystem. According to him, one of the catalysts for the fall of the ecosystem was the liquidity crisis of the FTX and Genesis platforms.