Following the SEC, the US Department of Justice is to look into what led to the failure of the LUNA-UST project pair in May 2022.
The Terra cryptocurrency project (LUNA) and the stablecoin TerraUSD (UST) are the subject of an investigation by the US Department of Justice, which increases the likelihood that founder Do Kwon may be charged with a crime.
With speculations that he is residing in Serbia ever since LUNA-UST failed, Kwon has purposefully avoided Singaporean and South Korean authorities. The government of South Korea, which demanded Do Kwon's detention and cancelled his passport, has despatched agents to Serbia to continue looking for Do Kwon. Reportedly getting ready to re-enter the bitcoin industry with a number of new ventures is Terraform Labs' CEO.
In order to conduct a more thorough investigation, the US Federal Bureau of Investigation (FBI) and the New York Southern District Attorney's Office have started speaking with former Terraform Labs workers. Terraform Labs is the business that created the two cryptocurrencies.
The prosecutor allegedly related conversations about the scheme to "rescue" LUNA-UST in May 2022 amongst important investment funds in the sector, including Jump Trading, Jane Street, and Alameda Research.
The $60 billion crypto economy has not received a bailout, but the authorities are investigating whether those investment funds are part of a manipulated market.
Earlier than that, in February 2023, the United States Securities and Exchange Commission (SEC) declared both currencies stocks and charged Do Kwon with defrauding investors of billions of dollars through the LUNA-UST project pair.
Also, an unnamed US investment company worked with Terraform Labs in off-chain transactions to promote UST during the May 2021 depeg, the SEC's indictment claims. Deal with Terraform Labs resulted in significant returns for that investment fund. Investors were also given the impression that the stablecoin UST operation model is stable based on an established formula, which prompted them to continue investing.
Several people believe that Jump Crypto, a subsidiary of Jump Trading that trades cryptocurrencies, is the investment fund.