Do Kwon, Terra’s “broken-hearted” co-creator, headlines a series of named defendants in a class action filed in U.S. District Court for Northern California on Friday.
Kwon is joined by a group that includes Terraform Labs, Jump Crypto and Three Arrows Capital. Plaintiff Nick Patterson alleges, among other charges, that the Terra tokens were sold as “unregistered securities” and that the “The defendants made a series of false and misleading statements regarding the largest digital assets in the Terra ecosystem by market capitalization, UST and LUNA, in order to induce investors to buy these digital assets at inflated prices. »
Kwon and Daniel Shin started Terraform Labs in 2018, initially with the goal of disrupting payment giants like PayPal. Later that year, the pair raised $32 million, and in 2019 an initial coin offering raised $62 million.
UST and LUNA imploded last month, wiping out tens of billions of dollars in value, for which Kwon has been pilloried online. After promising that Terra’s dollar-pegged algorithmic stablecoin couldn’t collapse, while also attacking rivals on Twitter, sympathy was scarce.
But that still didn’t stop the Terra community from endorsing “Terra 2.0” following the staggering collapse, a project that included creating a new LUNA token and relegating the previous one to “LUNA Classic” status. , to swap under LUNC instead.
As of this writing, the new LUNA is trading at $1.81—down from the initial high of $19.54, according to CoinMarketCap—while LUNC hovered around $0.00005.
Want to be a crypto expert? Get the best of Decrypt straight to your inbox.
Get the biggest crypto news + weekly digests and more!