The US Department of Justice is reportedly investigating the crash of the stablecoin TerraUSD, which occurred last year.
Sources familiar with the situation revealed to the Wall Street Journal that former Terraform Labs employees who handled the USTC stablecoin have already been interrogated by the Federal Bureau of Investigation (FBI) and the Southern District of New York (SDNY).
Investigators are examining the relationship between Chai, a South Korean payment platform, and the Terra blockchain, which powered USTC.
The US Securities and Exchange Commission (SEC) claims that Do Kwon, the founder of the Luna/Terra project, misled investors into thinking that Chai transactions were being processed on the Terra blockchain.
Terraform Labs and the US Attorney’s Office have declined to comment on the information about the searches to the media.
In February, the SEC filed a lawsuit against Terraform Labs and Do Kwon for allegedly “managing a multi-billion dollar fraud” involving the illegal offering and selling of an interconnected set of digital securities.
The collapse of the UST algorithmic stablecoin led to the creation of the Terra Classic (LUNC) token, according to the regulator.
The whereabouts of Do Kwon, the founder of the company, is currently unknown, and he denies responsibility for the collapse of the Terra ecosystem.
He suggests that one of the catalysts for the ecosystem’s fall was the liquidity crisis of the FTX and Genesis sites.