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SEC Investigating UST Stablecoin Blowup in Fresh Threat to Terra

  • Probe looks into marketing of token also known as TerraUSD
  • Last month’s implosion among biggest busts in crypto history
Terra's Luna Amid Its $60 Billion Implosion
Photographer: Gabby Jones/Bloomberg

The US Securities and Exchange Commission is investigating whether the marketing of the TerraUSD stablecoin before it crashed last month violated federal investor-protection regulations, according to a person familiar with the matter.  

SEC enforcement attorneys are looking into whether Terraform Labs, the firm behind the coin also known as UST, broke rules for securities and investment products, said the person who asked not to be named discussing the confidential probe. The stablecoin was supposed to maintain a 1-to-1 peg to the US dollar through an algorithm and trading in a related token called Luna.