TerraUSD: Why The U.S. Justice Department Is Now Probing The Stablecoin's Collapse

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.

Timeline of Terrausd-wormhole

The U.S. Department of Justice is reportedly investigating the collapse of TerraUSD (CRYPTO: LUNC), a stablecoin created by South Korean crypto entrepreneur Do Kwon. This could potentially result in criminal charges against Kwon.

The United States Justice Department is reportedly investigating the collapse of the once-leading algo-stablecoin – TerraUSD (UST). According to a report by Wall Street Journal, the Federal Bureau of Investigation (FBI) and the Southern District of New York (SDNY) have started to probe UST's collapse.

The crypto space is witnessing many lawsuits regarding losses of investors' funds on different platforms. Most cases are related to the misuse and diversion of customers' funds and the false promotion of crypto tokens to gain investors' trust.

TerraUSD (UST) is a cryptocurrency that is supposed to track the value of the US dollar, but it has no cash backing. It uses a unique dual token system praised as an engineering marvel in the blockchain industry. However, recent revelations have shown that the stablecoin is not as reliable as previously thought.

Binance's French subsidiary, Binance France, has been sued by fifteen investors who claim that the cryptocurrency giant violated local regulations by misleading customers. The French subsidiary of Binance has been accused of violating France's laws by promoting and distributing its cryptocurrency services before obtaining proper authorization.

A new report has claimed that Do Kwon, the fugitive CEO of Terraform Labs, is currently staying in Serbia. The report added that the South Korean government has engaged the Serbian government regarding the matter.

A third-party audit has revealed that the Luna Foundation Guard spent $2.8 billion to defend the peg of the algorithmic stablecoin TerraUSD (UST).  Audit Findings Reported The audit was conducted by JS Held, a Jericho, New York-based consultancy firm.

With the ongoing FTX collapse, some crypto investors nearly forgot about the Terra LUNA-UST collapse. In the aftermath of Terra's collapse, the Luna Foundation Guard (LFG) spent roughly $2.8 billion defending the UST's peg.

An on-chain audit commissioned by the Luna Guard Foundation (LFG) and Terraform Labs (TFL) to provide transparency into the actions of the two organizations in their unsuccessful defense of the TerraUSD (UST) peg has concluded that there was no embezzlement

Crypto hedge fund Arca has shut down its Digital Yield Fund, a $20 million fund that had exposure to terraUSD.  The post Crypto hedge fund Arca shutters down TerraUSD-exposed fund appeared first on The Block.