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The news site, started by Wall Street Journal technology journalists Walt Mossberg and Kara Swisher, reported that the FBI and other US officials have been looking into Mithril, including conducting interviews with people close to the firm.
The investigation follows Recode's reports earlier this year focusing on Mithril's financial affairs and questions over how money is being invested.
Central to the issue is whether Mithril's co-founder and leader, Ajay Royan, committed financial misconduct by under-investing while raking in millions of dollars in management fees.
While Mithril has confirmed there is a federal investigation under way, it has described the allegations as "a foiled plot by a self-serving ex-employee".
"There are no allegations from any government agency, or any [investor.] Nevertheless, our attorneys are in contact with government authorities in order to protect [investors], employees, and portfolio companies against any extortionate behaviour," a Mithril spokesperson told Recode.
Recode reports that the investigation could subject Thiel to scrutiny and potentially stain his reputation as having a Midas touch in investing.
Thiel is no longer involved in Mithril's day-to-day operations but has reportedly given around $300 million of his own money to the firm, according to the report.
The German-born, US entrepreneur received a fast-tracked New Zealand citizenship in 2011, despite spending just 11 days in the country.
Thiel is viewed as one of the most successful venture capitalists in the tech industry, having cofounded online-payment giant PayPal and big-data company Palantir.
He was one of the earliest investors in Facebook, and now sits on its board. In New Zealand, he has put money into Xero and Vend, but his main investment focus remains in the US.
He is also a high-profile public and outspoken financial backer of President Donald Trump.
Forbes puts Thiel's wealth at US$2.3b, making him the second-richest NZ citizen behind Graeme Hart.
According to Recode, Thiel became aware of the concerns surrounding Mithril earlier this year but has been slow to take any action.
Aside from the FBI probe, powerful investment adviser Cambridge Associates is also looking into Mithril, the report said.