Another class-action lawsuit has been filed against Terraform Labs and Do Kwon

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Last Updated on July 26, 2022 by Bitfinsider

A new lawsuit has been filed against Terraform Labs and Do Kwon in the United States.

Terraform Labs and a slew of other entities, including the company’s controversial CEO Do Kwon, Jump Crypto and Jump Trading, DeFiance Capital, and the bankrupt hedge fund Three Arrows Capital, are accused of duping retail investors into purchasing Terra ecosystem tokens at “inflated prices,” making or endorsing false or misleading statements, aiding and abetting, civil conspiracy, and failing to register.

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 is eligible to participate in the action, according to the filing.

Terra experienced a dramatic collapse in May when its algorithmic stablecoin, UST, lost its peg to the US dollar, triggering a death spiral that wiped out approximately $40 billion from the cryptocurrency market in a matter of days. Several major crypto players, including Terra backers Three Arrows Capital, were hard hit as LUNA fell to zero and the market crashed, causing a domino effect that spread throughout the industry.

Meanwhile, Kwon and Terraform Labs are dealing with the consequences. Terra attempted to resurrect itself with a forked blockchain that did not include its failed algorithmic stablecoin design, but it was unable to gain traction, and its new LUNA token is now trading more than 90% lower than its high. Kwon is also facing multiple lawsuits from South Korean investors and could be charged with operating a Ponzi scheme. The South Korean Parliament is also looking into the situation.

Three weeks ago, prosecutors from South Korea and the United States met to share information about the various ongoing investigations into Terra’s demise.


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Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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