The U.S. Justice Department is looking into the failure of TerraUSD stablecoin in 2022 and may file criminal charges against its inventor, Do Kwon, according to the Wall Street Journal.
The action follows the U.S. Securities and Exchange Commission filing a complaint against Kwon last month for purportedly deceiving investors in a multibillion-dollar fraud.
The US Justice Department is taking steps to accuse Do Kwon
In May 2022, the value of the two main stablecoins of the Terra cryptocurrency initiative dropped drastically, leading to analogies with Lehman Brothers’ failure in 2008 that set off a global financial crisis.
At one point, TerraUSD (UST) suffered a severe collapse and dropped from its $1 peg down to $0.26. Its sister token Luna also saw a drastic decline of more than 97%, falling below the $0.22 mark and eventually dropping to almost nothing.
Terra was one of the ten most highly valued digital currencies, reaching a maximum price of around $120.
The Journal reported that about a year after the investigation began, the Federal Bureau of Investigation and the Southern District of New York questioned ex-employees from Terraform Labs, which is responsible for TerraUSD.
The most recent report indicated that the Justice Department’s inquiry is following a route similar to that of the SEC’s accusations.
U.S. prosecutors and authorities have brought a range of investigations and charges against TerraForm Labs and Kwon, as part of an international effort.
A warrant for Kwon’s arrest has already been issued by South Korea, and Interpol has also released a Red Notice to inform law enforcement agencies around the globe of his location.
Interpol has asked police forces globally to look for and detain a person in question until his/her extradition or surrender is done or other legal processes take place.
Singapore officials also affirmed their continuing examination into the now-defunct stablecoin project.
TerraUSD: Where Is Do Kwon Now?
South Korean prosecutors have reported that Kwon has moved to Serbia via Dubai, according to Yonhap, a South Korean news outlet, in December.
The South Korean Ministry of Justice has asked the Serbian government for help in locating Kwon.
It is possible that Kwon has moved to a neighboring country as his passport expired, so there is no evidence of his entering or leaving the country.
South Korea and Serbia have not agreed to a formal extradition treaty, yet they have honored requests for extradition under the European Convention on Extradition in the past.
