The FBI and the Southern District of New York have questioned former members of the Terraform Labs (TFL) team as part of a Justice Department-led investigation into the collapse of the TerraUSD stablecoin. This is reported The Wall Street Journal with reference to sources.
According to them, the investigation of the Ministry of Justice covers the same areas as the lawsuit. SECfiled against the company and its management in February.
In particular, the investigators became interested in the connection between the South Korean payment company Chai and the TFL blockchain. The SEC alleges that TFL CEO Do Kwon misled the public about processing Chai’s transaction through their network, when in fact the service used “more traditional technology.”
U.S. prosecutors are also looking into correspondence between trading firms, including Jump Trading Group, Alameda Research and Jane Street Group, about rescuing TerraUSD, writes Bloomberg News.
SCOOP: Jane Street, Jump and Alameda are facing scrutiny by US prosecutors for their Telegram group chats about a Terra bailout last May.
W/@avabmorrison @allyversprille @ElleBeyoud pic.twitter.com/MKZ5tjOXm8
— Yueqi Yang (@Yueqi_Yang) March 13, 2023
The SEC has now filed civil charges against TFL and Do Kwon for orchestrating a multi-billion dollar securities fraud. If charges are filed by the US Department of Justice, they will be criminal charges and may result in jail time.
Recall that in early March, the Singapore police also launched an investigation against the company.
In December 2022, the media, citing the South Korean prosecutor’s office, reported that Kwon was hiding in Serbia. Later, representatives of the Ministry of Justice and the supervisory agency clarified that these allegations “are not false.”
The head of the TFL himself said that he was not “on the run” and was cooperating with law enforcement officers. In September, Bloomberg reported on the issuance of a “red notice” by Interpol for his detention.
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