Terra Developer Do Kwon Hit With Another Class-Action Lawsuit

Zinger Key Points
  • The lawsuit seeks restitution of the monetary value of the purchase price of Terra tokens.
  • Last week, Do Kwon denied that he had siphoned up to $2.7 billion from the company.

A lawsuit has been filed in U.S. District Court, Northern District of California, by Scott+Scott Attorneys at Law, against Terra LUNA/USD founder Do Kwon and his developer company Terraform Labs.

In the lawsuit, it is stated that Kwon's project team  misrepresented Terra's stability to win the trust of crypto investors. 

The lawsuit also claims that between May 6 and May 9, structural infirmities specific to the Terra ecosystem "exposed the truth regarding the UST/LUNA pair." Within a week, the "prices of UST and LUNA collapsed by about 91% and 99.7%, respectively."

Also Read: Terra's Do Kwon Denies Cashing Out $2.7B, Michaël Van De Poppe Says He Deserves Jail

The plaintiff claims that Terra tokens bear all the hallmarks of being investment contracts, although “no registration statements have been filed with the SEC.”

The lawsuit mentions that the Luna Foundation Guard, formed to protect the LUNA token, inaccurately portrayed the security of the token when it came to a “proverbial run on the bank by UST/LUNA investors.”

Earlier in June, Kwon was sued by Korean legal firm LKB & Partners as numerous other investors prepared legal challenges against Terra.

Photo: Do Kwan, Terra site video screenshot

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