Justice Department investigating collapse of Do Kwon’s TerraUSD: report

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The U.S. Justice Department is investigating the collapse of the stablecoin TerraUSD, the Wall Street Journal reported late Monday, putting founder Do Kwon at risk of facing new criminal charges.

According to the Journal, the FBI and prosecutors from the Southern District of New York have met in recent weeks with former employees of Kwon’s company, Singapore-based Terraform Labs.

Last month, the Securities and Exchange Commission charged Terraform Labs and Kwon with securities fraud, alleging they deceived investors by marketing crypto assets and claiming they would increase in value. Terra collapsed last year, wiping out roughly $40 billion in market value and starting a chain reaction that tore through the crypto industry.

The Journal reported the Justice Department investigation largely focuses on the same allegations the SEC raised. Neither Terraform nor the DOJ responded to the Journal’s requests for comment, the report said.

Kwon, a South Korean national, fell out of public view last fall after South Korean authorities issued an arrest warrant for him.

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