The US Securities and Exchange Commission (SEC) has launched an investigation into the algorithmic stablecoin TerraUSD (UST), reports Bloomberg with reference to sources familiar with the case.
According to the publication, the regulator is investigating whether Terraform Labs, the company behind UST, violated federal investor protection laws during the promotion of the coin.
Terraform Labs representatives said they were not aware of the SEC’s investigation into UST.
Also media reportedthat the SEC interrogated the company’s employees and found that a few months before the collapse of Terra, the head of Terraform Labs, Do Kwon, began transferring about $80 million monthly from the company’s funds to “dozens of cryptocurrency wallets.”
In addition, the other day an American court rejected Do Kwon’s appeal and ordered him to cooperate with the authorities’ investigation into the Mirror protocol.
Following the collapse of Terra, South Korean financial regulators held an emergency meeting to assess the impact of the incident. According to media reports, local authorities have begun checking employees of Terraform Labs as part of the investigation.
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