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.
Image: Coincu News
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.
Crypto total market cap reclaims the $1 trillion territory following a tumultuous week | Chart: TradingView.comTerraUSD: 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
The Financial Services Commission (FSC) in South Korea issued a notice emphasising the obligation for investors in digital assets to receive interest on their deposits into exchanges by July 2024. Notably, the guidance excludes nonfungible tokens (NFTs) and central bank digital currencies (CBDCs) from this regulation.
JoyThe objective, ostensibly, is to close loopholes and bring the digital asset ecosystem into greater compliance.
BrianSouth Korea's Financial Services Commission proposes regulations, redefining cryptocurrency transactions with a focus on user protection, token exclusions, and liability measures.
Hui XinU.S. presidential candidates from both major parties discuss key cryptocurrency issues, including Tornado Cash and future legislation, at Coinbase's Stand With Crypto event.
YouQuanFIFA transitions to Polygon for its 2026 World Cup digital collectibles, aiming to revitalise its blockchain strategy and offer fans unique, tangible rewards.
YouQuanPenang Free School (PFS), Southeast Asia’s oldest English-medium school, is taking a bold leap into the future of education through a strategic alliance with Crypken Sdn Bhd, a Web3 company. This collaboration marks a pivotal moment for the Malaysian education sector, introducing blockchain-powered certificates for students—a move towards enhanced security, transparency, and a student-centric credentialing system.
JoyBinance strategically exits Russia, selling to CommEX amid regulatory challenges and speculation.
Hui XinCreta joins forces with Thomas Vu, producer of “League of Legends”, backing his game incubation projects and upcoming media ventures. Both entities synergise their Web3 incubation programs, aiming for originality and quality, eyeing the Middle East and India's emerging markets.
JoyA recent study highlights a significant vulnerability in custom GPTs, revealing the ease of extracting sensitive data through prompt injection attacks, urging stronger security measures.
YouQuanWylie Aronow, co-founder of Yuga Labs, despite making progress in his health, is not prepared to return to active work, and emphasises the need for sustained well-being.
Hui Xin