- he U.S. Department of Justice has launched a probe into the collapse of Do Kwon’s TerraUSD.
- Authorities are reportedly looking at chats between Alameda Research, Jane Street, and Jump Trading.
- Federal prosecutors are looking for signs of market manipulation in conversations related to the stablecoin’s bailout.
- The FBI and the U.S. Attorney’s Office have questioned former team members of Do Kwon’s company.
The United States Department of Justice has launched a probe into the collapse of TerraUSD, the stablecoin issued by Do Kown’s Terraform Labs. The investigation is believed to add potential criminal charges for founder Do Kwon, who is currently on the run. The fresh probe has named several interesting entities from TradFi as well as the crypto space.
Federal prosecutors have questioned former Terra employees
According to a report by Bloomberg, federal prosecutors from the office of the U.S. Attorney for the Southern District of New York are looking into Telegram conversations among employees at Jump Trading, Jane Street, and Alameda Research. The group chats under scrutiny are reportedly related to a potential bailout of the TerraUSD stablecoin in May last year.
People familiar with the matter revealed that the prosecutors are investigating whether possible market manipulation was involved. The report clarified that no one has been accused of wrongdoing as part of the investigation of the chats, adding that the probe won’t necessarily result in the filing of charges.
As per a recent report by the Wall Street Journal, the Federal Bureau of Investigation (FBI) and Manhattan federal prosecutors have been questioning former employees of Do Kwon’s Terraform Labs over the past few weeks. The Department of Justice is seeking interviews with other persons involved in the matter as well.
News of the probe comes barely a month after the U.S Securities and Exchange Commission (SEC) charged Kwon with orchestrating a multi-billion dollar crypto asset securities fraud. The regulator alleged that Do Kwon misled investors about the stability of UST. The lawsuit was followed by reports claiming that Jump Trading, one of the firms currently under scrutiny by the DoJ, made $1.28 billion before Terra’s collapse.