Terra, Do Kwon, and several associated entities are facing a new lawsuit, with complaints similar to previous lawsuits.
The lawsuit has been filed against several entities associated with the Terra ecosystem.
Meanwhile, authorities in South Korea are conducting a thorough investigation of Terraform.
Terra’s legal woes continue to mount as a new class action lawsuit has been filed against Terraform Labs, co-founder Do Kwon, head of research Nicholas Platias, and several firms associated with the company. Law firm Bragar Eagel & Squire, P.C. filed the lawsuit in the United States District Court for the Northern District of California on behalf of investors who bought several associated tokens.
The list of assets is quite vast and includes UST, LUNA, KRT, ANC, WHALE, ASTRO, APOLLO, XDEFI, MINE, aUST, vUST, MIR, Mirrored Assets, liquidity pool tokens, and bonded assets. Investors who bought the tokens between May 20, 2021, and May 25, 2022, can apply to the court to be lead plaintiff until August 19.
The complaint claims that the defendants “violated provision of the Exchange Act.” Among other things, it claims that they carried out
“a plan, scheme, and course of conduct that TFL intended to and did deceive retail investors and thereby caused them to purchase Terra Tokens at artificially inflated prices.”
These complaints are similar to what other lawsuits against Terra have alleged. A lawsuit filed in June 2022 stated that Do Kwon, Terraform Labs, and others violated federal securities laws and misled investors.
Other major entities have also been affected by the Terra fallout. Binance.US has been hit with a class action lawsuit over the UST stablecoin, saying that it violated laws for the sale of unregistered securities.
Terra Drama Continues As Lawsuits Pile Up
Terra’s fall from grace has become a tremendous spectacle in the market, and the entire industry will learn strong lessons from the entire incident. The fall of UST and the effects on investors has caught the attention of regulators across the world, and they have not taken the case lightly.
Terra co-founder Daniel Shin’s home was raided by South Korean authorities last week, and 15 cryptocurrency exchanges also saw prosecutors and investigators visit them. Terra developers have also been banned from leaving South Korea.
The future of the crypto market will undoubtedly be altered because of Terra, and regulators and lawmakers were very keen on controlling the market regardless. The short-term ramifications of this may be painful for the market, but in the long run, it should provide some protection for investors — and prevent repeats of incidents like Terra’s collapse.