TerraUSD: Why The U.S. Justice Department Is Now Probing The Stablecoin’s Collapse

Read full article at Bitcoinist.

The U.S. Justice Department is investigating the 2022 collapse of the TerraUSD stablecoin and is considering bringing criminal charges against the coin’s creator, Do Kwon, as reported by the Wall Street Journal.

The move comes after the U.S. Securities and Exchange Commission filed charges against Kwon last month for allegedly misleading investors in a multibillion-dollar scam.

U.S. Justice Department Starts Move To Implicate Do Kwon

In May 2022, the two primary stablecoins of the crypto project Terra have fallen precipitously, prompting comparisons to the collapse of Lehman Brothers, which triggered the 2008 financial crisis.

At one point, the stablecoin TerraUSD, or UST, almost totally collapsed and lost its $1 peg, plummeting to $0.26. Likewise, the sibling token of TerraUSD, Luna, plummeted by more than 97%, falling below $0.22. Eventually, Luna had fallen to almost $0.

Terra was among the 10 most valuable cryptocurrencies with a price peak of around $120.

According to the Journal, the Federal Bureau of Investigation and the Southern District of New York have interviewed former workers of Terraform Labs, the firm behind TerraUSD, as part of the probe nearly a year later.

The most recent report revealed that the Justice Department’s investigation is proceeding down a similar path as the SEC’s allegations.

The actions of U.S. prosecutors and authorities against TerraForm Labs and Kwon are part of a global string of investigations and charges they face.

South Korea has already issued an arrest warrant for Kwon and obtained a Red Notice for him from Interpol, thereby alerting law enforcement agencies worldwide to his whereabouts.

The Interpol notice is a request to law enforcement agencies around the world to find and provisionally detain a specific individual pending extradition, surrender, or other legal action.

In addition, Singapore authorities confirmed their ongoing investigation into the defunct stablecoin project.

TerraUSD: Where Is Do Kwon Now?

Yonhap, a local news source in South Korea, claimed in December that Kwon has since relocated to Serbia via Dubai, as stated by South Korean prosecutors.

The Ministry of Justice of South Korea has reportedly requested the Serbian government for assistance relating to Kwon’s whereabouts.

There is a possibility that Kwon has already relocated to a nearby country, as there is no official record of his admission or exit due to the expiration of his passport.

South Korea and Serbia do not have an extradition treaty, but both have acceded to requests under the European Convention on Extradition in the past.

-Featured image from I-Sight

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

#Bitcoin #Cryptocurrency #Crypto

Related articles

Paypal CEO Says Demand for Cryptocurrencies Is ‘Multiple-Fold’ of Initial Expectations

Read full article at Bitcoin News.The CEO of payments giant Paypal, Dan Schulman, has revealed that the demand […]

Learn More

Bank of Russia’s Deputy Governor: Investing in Bitcoin is Like Entering a Minefield

Read full article at CryptoPotato.Sergey Shvetsov – a member of the Bank of Russia Board of Directors – […]

Learn More

IMF Raises Concern Over El Salvador’s Adoption of Bitcoin as Legal Tender

Read full article at Coingape.International Monetary Fund (IMF) has raised concerns over El Salvador’s adoption of Bitcoin as […]

Learn More