After the SEC, it is the turn of the US Department of Justice to further investigate the cause of the collapse of the LUNA – UST project pair in May 2022.
According to sources of Wall Street Journalthe US Department of Justice has opened an investigation into cryptocurrency project Terra (LUNA) and stablecoin TerraUSD (UST), raising the possibility of criminal charges against founder Do Kwon.
— db (@tier10k) March 13, 2023
Specifically, the US Federal Bureau of Investigation (FBI) and the New York Southern District Attorney’s Office have begun interviewing former employees of Terraform Labs, the company behind the two cryptocurrencies, as well as reviewing them. investigate further.
The prosecutor is said to be recounting discussions among major investment funds in the industry including Jump Trading, Jane Street and Alameda Research regarding the plan to “rescue” LUNA-UST in May 2022.
While no bailout has been announced for the $60 billion crypto ecosystem, the authorities appear to be determining whether those investment funds are manipulative. market or not.
Previously, in February 2023, the United States Securities and Exchange Commission (SEC) charged Do Kwon with billions of dollars of fraud through the LUNA-UST project pair, and affirmed that both coins are stock.
In addition, the SEC’s indictment also mentions an unnamed “American investment fund” that engaged in off-chain transactions with Terraform Labs to subsidize UST during the May 2021 depeg. That investment fund made huge profits from the agreement with Terraform Labs, and created the false impression that the stablecoin UST model of operation is stable according to the predetermined algorithm, giving investors confidence to keep pouring money in.
There is a lot of speculation that the investment fund is Jump Crypto, the subsidiary participating in the cryptocurrency market of Jump Trading.
Since the collapse of LUNA-UST, Kwon has deliberately evaded the authorities of Singapore and South Korea, with rumors that he is staying in Serbia. The South Korean authorities, which ordered Do Kwon’s arrest and canceled his passport, have sent representatives to Serbia to continue the search for Do Kwon. The CEO of Terraform Labs was recently reported to be preparing to return to the cryptocurrency market with a series of new projects.