The U.S. Justice Department is probing last year’s collapse of the TerraUSD stablecoin, including whether several prominent trading firms engaged in market manipulation, according to the Wall Street Journal and Bloomberg. By NelWang
Explore the policy fallout from the 2022 market crash, the advance of CBDCs and more.raising the possibility of criminal charges being filed against the stablecoin’s creator, Do Kwon, according toThe FBI and the Southern District of New York have interviewed former employees of Terraform Labs, the company behind TerraUSD, and sought to interview others, according to the Journal.
Manhattan federal prosecutors are also examining chat-group discussions among prominent trading firms Jump Trading Group, Jane Street Group and failed FTX affiliate Alameda Research involving a potential bailout of TerraUSD, according to a separate report from Bloomberg, citing a person familiar with the matter.
Such a bailout never took place, but the investigation is seeking to determine whether the firms were involved in possible market manipulation. TerraUSD and its sister token, Luna, both eventually collapsed, setting off a series of high-profile failures of prominent crypto firms, including hedge fund Three Arrows capital, Voyager Digital and FTX.
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