Everyone wonders where the founder of Terra is
Do Kwon, the founder of Terraform Labsas well as Luna Foundation Guard (LFG) and Nicholas Platias, founding member of Terra, face a new $57 million class action lawsuit from aggrieved investors in Singapore.
The lawsuit was filed by 359 Terra investors before the High Court of Singapore September 23. Kwon, Platias and the LFG are accused of making fraudulent claims regarding the ecosystem’s algorithmic stablecoin, TerraUSD (UST)which was not « stable by design » and was unable to maintain its peg to the US dollar.
According to a Wall Street Journal article, investors « believed TerraUSD would basically be a stablecoin and that the price would always be at the equivalent of the US dollar ».
Investors also speculated that the stablecoin would offer “attractive annual returns” when placed in Anchor Protocol, Terraform Labs’ lending and borrowing service, according to the text of the complaint.
According to the people who filed the complaint, the four parties in connection with Terra « knew or should have known that the plaintiffs wanted to buy and hold stablecoin-like cryptocurrencies that are not subject to broader market volatility and earn a decent passive return ».
The plaintiffs sought compensation of approximately $57 million for their lost funds based on the value of the USTs they bought, held or sold amid the market decline in May, as well as damages. aggravated.
In May 2022, Terra UST collapsed amid a wave of withdrawals and entered a fatal spiral, losing virtually all of its market value within minutes. Subsequently, many claimed that the stablecoin was a Ponzi scam and was destined to fail.
The lawsuit indicates that, despite the failure of the UST, Do Kwon continued to give hope by tweeting for people to calm down, saying « everything is under control. »
Kwon hit by lawsuit
After the unprecedented failure of TerraUST, Kwon has become the target of numerous lawsuits and threats. In mid-September, South Korean prosecutors issued an arrest warrant for him and Interpol added Kwon to its red notice list, asking law enforcement to locate him and possibly arrest him.
At the time, local media said prosecutors were « freezing » crypto-assets believed to belong to Kwon. These cryptos were allegedly held on an undisclosed « overseas » crypto exchange that was cooperating with the Seoul Southern District Prosecutor’s Office.
Kwon, however, has been active on social media during the controversy and has denied claims that some $67 million of his crypto was seized by prosecutors.
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