Terra's Internal Legal Team Resigns After LUNA, UST Debacle

The move could force Terraform Labs to seek outside counsel for legal affairs at a difficult time for the company.

By Shomik Sen Bhattacharjee | Updated: 18 May 2022 20:01 IST

Terra's Internal Legal Team Resigns After LUNA, UST Debacle

Photo Credit: Unsplash/ Mariia Shalabaieva

The ongoing rigmarole with Terraform Labs has taken yet another turn

Highlights

Terraform Labs is the company behind the Terra blockchain
Terra’s algorithmic stablecoin imploded last week causing massive losses
The reason for the team resignation is unknown

The in-house legal counsel at Terraform Labs, the blockchain startup behind the UST stablecoin and LUNA governance token has silently resigned from the company. Terraform Lab's general lawyer Marc Goldich, chief litigation, and regulatory counsel Noah Axler, and chief corporate counsel Lawrence Florio all left the blockchain business in May 2022, according to their LinkedIn profiles. The move arrives in the wake of the collapse of two digital assets connected to the startup as the UST stablecoin de-pegged from its projected $1 (roughly Rs. 78) mark.

Axler and Florio joined Terraform Labs in January 2022, while Goldich started in August 2021. “Terraform Labs has had a challenging week, and a small number of staff members have resigned recently,” a company spokesperson said talking to CoinDesk.

"The vast majority of team members are still dedicated to fulfilling the project's objectives. Terra is more than UST, with a strong community and a well-defined rebuilding strategy. The Terra spokesman stated, "Our current focus is on implementing our plan to restore the Terra ecosystem."

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The mishap that befell the Terra ecosystem is unprecedented, and one of the rarest seen in the history of the blockchain ecosystem. This is so because Terraform Labs tried to pioneer a new payment technology in the form of algorithmic stablecoin, one that differs markedly from its peers like Tether (USDT), which has its reserves domiciled in US dollars.

The frailty of the algorithmic stablecoin protocol was reflected in how easily it got attacked a little more than a week ago, and recovery was hard to make despite the several attempts to re-peg it back to $1 (roughly Rs. 78). In fact, the Luna Foundation Guard (LFG), a not-for-profit organisation tasked with developing the reserve for the UST stablecoin, unveiled earlier this week how it has depleted its Bitcoin and stablecoin reserve in a bid to restore the UST's downfall.

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In fact, the resignation of the Terraform Labs legal team could push the company to turn to outside counsel for legal affairs.

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