Terraform Labs, Do Kwon, And Others Face Second Class Action Suit In The U.S. By Law Firm Bragar Eagel & Squire
Terraform Labs and Do Kwon have been slammed with another class action lawsuit in the U.S.
U.S. law firm Bragar Eagel & Squire, P.C., in a press release on Sunday, has revealed that it has filed a class action lawsuit against Terraform Labs, Do Kwon, and other associates in the Northern District of California on behalf of persons who invested in Terra issued tokens from May 20, 2021, to May 25, 2022.
According to the complaint filed by the stockholder rights law firm, TerraForm Labs Jump Crypto, Jump Trading LLC, Republic Capital, Republic Maximal LLC, Tribe Capital, DFinance Capital, DFinance Technologies, GSR/GSR Markets Limited, Three Arrows Capital, Do Kwon, and Nicholas Platias are accused of misleading investors about the value of Terra ecosystem tokens.
Additionally, the claim alleges that all parties involved participated in the sale of unregistered securities. Furthermore, all parties are accused of defrauding investors for their gain.
The suit is the second class action lawsuit to be filed in the U.S. against the above parties following the infamous Terra ecosystem collapse in May. Notably, in June, Scott+Scott Attorneys at Law LLP revealed that it had launched a class action lawsuit against Terraform Labs, making broadly identical claims.
It is worth noting that investigations into the events leading up to the Terra USD (UST) de-pegging event and the subsequent LUNA collapse have recently heated up. As reported by The Crypto Basic on Friday, South Korean investigators raided the home of Terraform Labs co-founder Daniel Shin and the offices of several exchanges.
During the raids, investigators reportedly seized records hoping to find evidence that Do Kwon and his associates may have defrauded Terra investors.
The once-promising Terra ecosystem came to its knees in early May when what appeared to be an investor run on the bank occurred on Terra’s Anchor protocol. Consequently, Terra’s UST stablecoin de-pegged rapidly, tanking the value of the LUNA token despite claims of the stability of the token by Terraform Labs founder Do Kwon.
As a result, in just a few days, over $40 billion of investors’ funds was wiped off the market, with UST now trading at pennies on the dollar. Notably, the Terra ecosystem collapse led to a liquidity crisis for several crypto firms with undue exposure exacerbating panic in the crypto markets.
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