Thursday, December 8, 2022

Terraform Labs Got Slapped With A Class-Action Suit

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Do Kwon and Terraform Labs got slapped with a class-action suit after the implosion of UST and LUNA which ended up vaporizing billions of dollars in value so let’s read more today in our latest cryptocurrency news.

Do Kwon as the co-creator of Terra, headlines a list of plaintiffs named in a class-action suit that was filed on Friday in the US District Court in Northern California. Terraform labs got slapped with the suit as well but also Jump Crypto, Three Arrows Capital is a part too. Plaintiff Nick Patterson alleged among other accusations that the Terra tokens were sold as unregistered securities and that the defendants made a series of fake and misleading statements about the biggest Terra ecosystem digital assets by market cap, LUNA, and UST in order to induce investors into buying the digital assets at inflated rates.

Kwon and Daniel Shin launched Terraform labs in 2018 with the goal to upend the payment giants like PayPal. The same year, the pair raised $32 million and in 2019 the initial coin offering yielded $62 million both UST and LUNA imploded last month and erased billions of dollars in value. Kwon expressed his sadness online after promising the Terra algorithmic stable coin could not possibly collapse, sympathy was nonexistent.

terraform labs partnered, do kwon, web3, longhash

This didn’t stop the terra community from approving Terra 2.0 in the wake of the collapse which is a proejct that included creating a new LUNA token and relegating the preivous one to the LUNA Classic status to instead trade under LUNC. The new LUNA was trading for $1.81 down from the peak of $19.54 while LUNC hovered at $0.0005.

As recently reported, The founder and CEO of Terra, Do Kwon denies claims of cashing out $2.7 billion before the fiasco which led to the UST losing the peg and LUNA crashing to $0. Twitter user FAtManTerra made another allegation a day ago, arguing that Do Kwon cashed out $2.7 billion over the span of a few months before UST’s depeg in May. FatMan alleged that Kwon used Degenbox to allow users to stake collateral to buy UST and put it into Anchor which was used for the staked UST to borrow more UST and put it in Anchor once gain. Hours later, Kwon refuted the claims and clammed them as categorically false.

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