- The US Department of Justice has opened an investigation into Do Kwon’s TerraUSD debacle.
- 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 bailout.
- The FBI and the U.S. Attorney’s Office have questioned former members of Dawon’s team.
The U.S. Department of Justice has launched an investigation into the debacle of TerraUSD, a stablecoin issued by Do Known’s Terraform Labs. The investigation is believed to lead to potential criminal charges against founder Do Kwon, who is now at large. The new probe named several interesting entities from within TradFi as well as the crypto space.
Federal prosecutors question ex-Terra employee
Federal prosecutors in the U.S. Attorney’s Office for the Southern District of New York are investigating Telegram conversations between employees of Jump Trading, Jane Street and Alameda Research, according to Bloomberg. The censored group chat was reportedly related to a potential bailout for the TerraUSD stablecoin last May.
Prosecutors are investigating possible market manipulation, according to people familiar with the matter. No one was accused of wrongdoing as part of the chat investigation, the report clarified, adding that the investigation would not necessarily lead to charges.
According to a recent Wall Street Journal report, the FBI and Manhattan federal prosecutors have been questioning former employees of Do Kwon’s Terraform Labs for the past few weeks. The Justice Department is also seeking to interview others involved in the matter.
News of the investigation comes less than a month after the U.S. Securities and Exchange Commission (SEC) accused Kwon of orchestrating a multibillion-dollar crypto asset securities fraud. Do Kwon misled investors about the stability of UST, the regulator said. The lawsuit followed reports that Jump Trading, one of the firms currently under scrutiny by the DOJ, made $1.28 billion before Terra collapsed.
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