Citing sources familiar with the case, Bloomberg reports that the US Securities and Exchange Commission (SEC) has launched an investigation into the algorithmic stablecoin TerraUSD (UST).

According to the publication, the regulator is investigating whether Terraform Labs, the company behind the UST, violated federal investor protection laws during the coin’s promotion.

Representatives of Terraform Labs said they were not aware of the SEC investigation into the UST.

In addition, an American court the other day dismissed the appeal of Terraform Labs president Do Kwon, ordering him to cooperate with the authorities’ investigation regarding the Mirror protocol.

Recall that after the collapse of Terra, South Korean financial regulators held an emergency meeting to consider the consequences of the event. According to media reports, local authorities began checking Terraform Labs employees as part of the investigation.

Read more about what happened to the project and what the implications are for the crypto industry in our dedicated post: