Do Kwon, TFL Faced Class-Action Lawsuit for Misleading Investors

Do Kwon, TFL Faced Class-Action Lawsuit for Misleading Investors

Do Kwon, TFL Faced Class-Action Lawsuit for Misleading Investors

IMPORTANT POINTS

  • A Lawsuit Claims Terra Tokens Are Unregistered Securities
  • It claims that six venture capital firms pledged to support and fund the Terra ecosystem and “defend the link”
  • LUNA traded 6.78% up at $1.93

Terraform Labs CEO and co-founder Do Kwon may have moved on with the infamous Terra algorithmic stablecoin UST and the implosion of the native token LUNA, but US investors are just getting started. The South Korean entrepreneur and venture capital firms are now facing a class action lawsuit in the US for allegedly misleading investors.

Kwon’s legal troubles mount as he leads the list of defendants in Nick Patterson’s class-action lawsuit filed in Northern California U.S. District Court for alleged violations of the Federal Securities Law.

Other defendants named in the lawsuit besides Kwon include Terraform Labs (TFL), Jump Crypto, Three Arrows Capital, Republic Capital, Tribe Capital, Definance Capital, GSR and Nicolas Platias. The plaintiff, Patterson, alleges that Terra tokens have been sold as unregistered securities and that “defendants have made a series of false and misleading statements regarding the Terra ecosystem’s largest digital assets by market cap, UST and LUNA, to seek investors incentivize these digital assets at high rates.”

Terra Community AMA with Do Kwon (April 2021) 1-22 screenshot Terra CEO, Do Kwon is hosted by a long standing Terra Community member @SebNondzee! Photo: Terra official YouTube account

The lawsuit also highlighted Kwon’s conduct before the historic crash that wiped out tens of billions in investments, noting that “one of Kwon’s insults is to humiliate and delegitimize his opponents or critics of the Terra tokens by denouncing them.” act like ‘bad’.” Prior to the collapse of Terra’s UST and LUNA, Kwon made headlines when he silenced critics and, in one instance, reprimanded a British economist, saying: “I don’t debate the poor on Twitter, and sorry I don’t have change. on me for her right now.”

Aside from Kwon, the lawsuit alleged that said venture capital firms “promised to support and fund the Terra ecosystem and “defend the link”. It also noted that “(Terra) promotions, along with the announcement of financial support from major venture capitalists in the sector, have been a siren to both experienced and novice crypto investors, luring them in with a supposedly ‘stable’ digital asset in UST that would nevertheless deliver an exorbitant return on investment through Anchor.”

Kwon and the other named defendants have not yet released a statement regarding this class-action lawsuit. LUNA, the original token of the new Terra 2.0 blockchain, traded 6.78% on Sunday at $1.93 with 24-hour volume of $250,110,244 as of 9:37 p.m. ET, based on data from CoinMarketCap.

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