Investors Withdraw Class-Action Lawsuit Against Terra and Do Kwon
A class-action lawsuit filed against Terraform Labs (Terra) and its co-founder Do Kwon has been dropped by investors. The lawsuit alleged that the crypto assets were involved in security fraud, resulting in the loss of investor funds. Nick Patterson initiated the lawsuit in July 2022 through Scott+Scott after the collapse of the Terra ecosystem.
Reasons for Dropping the Lawsuit
In a recent court filing, Patterson, representing investors similar to himself, stated that he would not receive any compensation for dropping the case. The filing simply stated, “Lead Plaintiff Michael Tobias and named plaintiff Nick Patterson…voluntarily dismiss this case…against defendants Terraform Labs, Pte. Ltd., and Do Kwon.”
SEC Continues Legal Action Against Terra and Kwon
While this lawsuit has been dropped, the United States Securities and Exchange Commission (SEC) is still pursuing legal action against Terra and Kwon. The SEC alleges that they were involved in a multi-billion dollar crypto asset securities fraud. Specifically, they are accused of orchestrating fraud related to an algorithmic stablecoin and other crypto asset securities.
Terra Rebrands Token as LUNC
After the collapse of its crypto token LUNA in May 2022, Terra rebranded it as Terra Luna Classic (LUNC). Currently, LUNC is priced at $0.00006.
Albright Capital Drops Lawsuit Against Terra
On January 11, Albright Capital voluntarily dropped its own lawsuit against Terraform Labs. This lawsuit made similar allegations of fraud.
Investigation into Kwon Continues
Authorities in various countries are conducting investigations into Do Kwon. The South Korean law firm Kim & Chang confirmed that Kwon had paid them $7 million before the collapse of TerraUSD and LUNA. Korean prosecutors and Singapore law enforcement are also tracking money sent to the company. Additionally, Swiss prosecutors have seized around $26 million in digital assets and US dollars owned by Kwon.
Kwon’s Detention and Prison Sentence
Do Kwon is currently detained in Montenegro. He received a four-month prison sentence on June 19 for attempting to travel with a falsified passport.
Hot Take: Investors Drop Lawsuit Against Terra and Do Kwon
Investors have decided to withdraw their class-action lawsuit against Terraform Labs and its co-founder Do Kwon. The lawsuit accused the crypto assets of being involved in security fraud, which resulted in financial losses for investors. While this lawsuit has been dropped, the United States Securities and Exchange Commission continues its legal action against Terra and Kwon, alleging their involvement in a multi-billion dollar crypto asset securities fraud. Meanwhile, investigations into Kwon are ongoing in various countries, including South Korea and Switzerland. Kwon is currently detained in Montenegro and has received a prison sentence for attempting to travel with a falsified passport.
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