• Mon. Apr 22nd, 2024

Sources have reported that the U.S. Justice Department has initiated an inquiry into the failure of the TerraUSD stablecoin. As per the Wall Street Journal’s report, the U.S. Justice Department is investigating the failure of the TerraUSD stablecoin, which Terraform Labs created.

The report cited unnamed sources who revealed that U.S. authorities had interviewed previous members of the Terraform team. This investigation follows the U.S. Securities and Exchange Commission’s accusations of deceiving investors in a multi-billion dollar scheme last month against Do Kwon, the founder of Terraform Labs.

TerraUSD is a cryptocurrency that aims to retain a constant value by being linked to the U.S. dollar. Nonetheless, it faced a considerable decline in worth in November 2021, which led to unease among those who had invested in it.

As a result, the recent probe by the U.S. Justice Department and the accusations levied against Kwon will likely intensify the apprehension of investors involved in the crypto market.

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The recent event has underscored the necessity of stricter supervision of the cryptocurrency market, specifically regarding stablecoins like TerraUSD, which are becoming favored. As regulators focus more closely on this industry, greater scrutiny and limitations may be imposed on stablecoins in the coming days.

Alameda and FTX Addresses Transfer $190M

In recent times, FTX, a platform for trading cryptocurrency derivatives, has come under the spotlight for transferring significant sums of USDT and USDC to various digital currency exchanges such as Binance, Coinbase, Coinbase Custody Wallet, etc. and Kraken.

For example, it is reported that three addresses associated with FTX/Alameda were responsible for transferring 69.64 million USDT to a specific address, “0xad6e.” Of this amount, forty-three million USDT was sent to Coinbase, Binance, and Kraken.

Blockchain data shows that 75.94 million USDC was also moved to Coinbase Custody Wallet. This significant transfer of funds has led to conjecture and anxiety regarding its purpose. For example, it might be linked to FTX’s liquidation proceedings, as the exchange attempts to amass all available funds to reimburse its investors as much as feasible.

The recent transfer of substantial sums of money to Coinbase, Binance, and Kraken might imply that FTX is attempting to settle its holdings and reimburse its investors as part of the liquidation procedure. Of course, the future of FTX and its users is still uncertain, but the funds’ transfer might indicate that the exchange is trying to tackle its problems and move ahead.

The downfall of FTX was initiated by an article released on Nov. 2, 2022, by CoinDesk, which reported that Alameda had the majority of its assets 14.6 billion dollars in FTT tokens issued by its subsidiary. Following this disclosure, investors started offloading their FTT tokens in large numbers, with nearly six billion tokens being withdrawn over three days.

Additionally, FTX extended credit to Alameda not only from its capital but also from customer funds. This revelation caused a spike in requests from FTX’s customers to withdraw their funds, which the company could not accommodate.

Whatever the reason behind the transfer of funds, it has sparked concern and speculation in the crypto community. Furthermore, the fact that three addresses linked to Alameda/FTX were involved in the transfer has further heightened the interest in this matter.

Megan Ford

Megan Ford

Megan Ford is an accomplished news writer with a talent for capturing the essence of a story. With a keen eye for detail and a dedication to accuracy, her articles provide readers with a captivating and well-rounded perspective on current events.

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