The U.S. Justice Department has opened a probe into the collapse of Do Kwon’s TerraUSD stablecoin, according to the Wall Street Journal (WSJ).

The investigation is said to target former team members of Terraform Labs who the FBI and New York officials have questioned in the U.S.

The SEC civil suit includes Kwon, the co-founder, and CEO of Terraform Labs, as a named individual; part of ongoing drama surrounding the South Korean crypto entrepreneur who is now facing criminal charges in the U.S. for the first time.

Investigators in the ongoing probe into the collapse of TerraUSD raised questions about the relationship between the South Korean payment app Chai and the underlying blockchain created by Terraform Labs to support the stablecoin, according to the WSJ.

The SEC alleged that Do Kwon misled the public by claiming that Chai transactions were processed on Terraform’s blockchain, when in reality, Chai used more conventional technology.

(By Dorian Batycka)