Terraform Labs, Do Kwon Get Hit by Another Class-Action Lawsuit in the US

TerraForm Labs failed to register TerraUSD (UST), Terra (LUNA) and other tokens, the complaint says.

By Shomik Sen Bhattacharjee | Updated: 26 July 2022 18:35 IST

Terraform Labs, Do Kwon Get Hit by Another Class-Action Lawsuit in the US

Photo Credit: YouTube/ Terra

Terraform Labs is accused, among other things, of misleading Terra investors and racketeering

Highlights

Three Arrows Capital and Do Kwon have also been named in the suit
Terra suffered a dramatic collapse in May
Terraform labs has already seen a class-action lawsuit before

TerraForm Labs, the company that conceived the Terra blockchain, is on the receiving end of yet another class-action lawsuit. Law firm Bragar Eagel & Squire have filed a new lawsuit against TerraForm Labs in the United States District Court for the Northern District of California on behalf of those who purchased Terra tokens between May 20, 2021, and May 25, 2022. Other defendants include TerraForm Labs co-founder Do Kwon, former TerraForm Labs Head of Research Nicholas Platias, Jump Crypto, GSR and Three Arrows Capital.

The class-action suit claims that Terraform Labs along with other entities are responsible for leading retail investors into purchasing Terra ecosystem tokens at "inflated prices," making or endorsing false or misleading statements, aiding and abetting, civil conspiracy, failing to register securities, and racketeering.

The filing calls for anyone who purchased Terra ecosystem tokens, including but not limited to the Terra blockchain's native assets, LUNA and UST, between May 20, 2021 and May 25, 2022 to participate in the action.

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

The complaint alleges that the defendants deceived retail investors through lies, fact omissions and endorsing misleading statements, causing them to purchase Terra tokens at "artificially inflated prices."

It also states that they violated the Securities Act by participating in TerraForm Labs' failure to register the Terra tokens.

Finally, the law firm accuses the defendants of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) "by conducting the affairs of an enterprise through a pattern of racketeering activity."

Animoca Brands Launches OMA3 DAO to Develop Metaverse Standards

Terra suffered a dramatic collapse in May when its algorithmic stablecoin, UST, lost its peg to the US dollar, triggering a death spiral that wiped out around $40 billion (roughly Rs. 3,20,060 crore) from the crypto market in a matter of days. Several major crypto players, including Terra backers Three Arrows Capital, were hit hard as LUNA crashed to zero and the market plummeted, resulting in a domino effect that spilled across the industry.

Why is Oppo making strange choices with its flagship Reno series? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.