In the latest twist of the ongoing Terra saga, the Wall Street Journal (WSJ) has revealed that the Department of Justice (DoJ) has opened an active investigation into the collapse of Terraform and TerraUSD.
The news comes just a month after the Securities and Exchange Commission (SEC) brought civil charges against Terraform Labs and disgraced CEO Do Kwon.
SEC officials alleged in February that Do Kwon and Terra had defrauded investors with claims that Korean payment firm Chai were using the TerraUSD blockchain to settle millions in transactions. The civil investigation into the relationship between Terra and Chai if found to be a fabrication could result in a variety of civil charges and penalties – mostly monetary fines.
The WSJ report detailed active investigations are now ongoing at the DoJ – with both the Federal Bureau of Investigations (FBI) and the Southern District of New York interviewing former Terraform Labs team members.
If these investigations by the DoJ result in additional charges, it will be an escalation of the case to a criminal level – which could see Do Kwon behind bars in the not so distant future.
Sources used by the WSJ further revealed that the area of DoJ investigation is very similar to the above SEC investigation.
Terraform At The Heart of Alleged Insider Trading Group Chat
US prosecutors are also looking into a rumoured group chat involving the trading firms Terraform Labs, Jump Trading Group (a Jump Capital affiliate), Alameda Research (FTX affiliate), and Jane Street Group.
SCOOP: Jane Street, Jump and Alameda are facing scrutiny by US prosecutors for their Telegram group chats about a Terra bailout last May.
W/@avabmorrison @allyversprille @ElleBeyoud pic.twitter.com/MKZ5tjOXm8
— Yueqi Yang (@Yueqi_Yang) March 13, 2023
The telegram group chat was explained as a last-ditch attempt to arrange a bailout by Terra Form Labs CEO Do Kwon. However, prosecutors are now investigating whether it’s possible that market manipulation could be connected with the conversations in the channel.
But as of yet, no one has been accused of wrongdoings over the conversations in the chat and it is currently unclear whether the investigation will result in any additional charges being brought about in the already messy Terra saga.
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