Where in the world is Do Kwon? FBI now Investigating Terraform Labs

Federal investigators are now questioning former employees of Terraform Labs, the firm behind the collapsed Terra-Luna stablecoin. As reported by the Wall Street Journal, Southern District of New York prosecutors and the Federal Bureau of Investigation (FBI) are conducting an investigation into the crypto firm behind the failed stablecoin project.

According to the SEC, Terra-Luna founder Do Kwon and Terraform defrauded investors by claiming that the South Korean payment app Chai used Terra blockchain to process payments, thus adding value to the Luna cryptocurrency. The SEC also stated that Kwon and Terraform raised billions through an unauthorized offer and sale of crypto asset securities, including the TerraUSD algorithmic stablecoin and mAssets.

Last week it was reported that Singaporean authorities had also launched an investigation into the company. Meanwhile, South Korean prosecutors have been investigating Kwon and questioning former Terraform staff since May last year, and have charged Kwon with fraud. Kwon is believed to be residing in Serbia and has denied all charges against him, which he claims are politically motivated.

In May of last year, Terra-Luna’s collapse occurred after the de-pegging of the UST stablecoin, resulting in the value of its associated cryptocurrency Luna falling to zero, wiping billions from the market within just hours.

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Weekly Crypto Policy Roundup – November 12 2021

The investigations by the SEC, FBI, and Southern District of New York prosecutors represent a further indication of the regulatory scrutiny facing the cryptocurrency industry. The case also highlights the increasing involvement of authorities across different countries, including Singapore and South Korea, in overseeing the operations of the sector.