Why is the US justice department investigating the collapse of TerraUSD?

According to the Wall Street Journal, the US Justice Department is examining the 2022 collapse of the TerraUSD stablecoin and is exploring criminal charges against the coin’s developer, Do Kwon.

The decision comes after the US Securities and Exchange Commission charged Kwon last month with defrauding investors in a multibillion-dollar scheme.

The US Justice Department has begun an investigation into Do Kwon Do.

The two principal stablecoins of the crypto project Terra fell rapidly in May 2022, evoking analogies to the collapse of Lehman Brothers, which caused the 2008 financial crisis.

The stablecoin TerraUSD, or UST, nearly completely crumbled and lost its $1 peg, plunging to $0.26 at one point. Similarly, TerraUSD’s twin token, Luna, fell by more than 97%, going below $0.22. Luna eventually fell to about $0.

Terra was one among the top ten most valuable cryptocurrencies, with a peak price of roughly $120.

According to the Journal, the Federal Bureau of Investigation and the Southern District of New York have interrogated former Terraform Laboratories employees as part of the investigation about a year later.

According to the most recent report, the Justice Department’s inquiry is following a similar course as the SEC’s charges.

The steps taken by US prosecutors and authorities against TerraForm Laboratories and Kwon are part of a worldwide investigation and charges against them.

South Korea has already filed an arrest order for Kwon and acquired an Interpol Red Notice for him, alerting law enforcement authorities throughout the world to his location.

The Interpol notice is a request to law enforcement authorities worldwide to locate and hold a specific individual pending extradition, surrender, or other legal action.

Furthermore, Singapore officials revealed that a probe into the dead stablecoin project is still continuing.

Where Is Do Kwon Currently in TerraUSD?

According to South Korean prosecutors, Kwon has subsequently traveled to Serbia through Dubai, according to Yonhap, a local news outlet in South Korea.

The South Korean Ministry of Justice has allegedly requested assistance from the Serbian authorities in locating Kwon.

Kwon may have already migrated to a neighboring nation, as there is no official record of his arrival or leave owing to the expiry of his passport.

Although South Korea and Serbia do not have an extradition treaty, both have previously granted petitions under the European Convention on Extradition.