Another class action lawsuit against TerraForm, Jump, Do Kwon in Luna Fiasco in SDNY
On Thursday, August 25, 2022, Matthew Albright, a Florida resident, filed a class action lawsuit in the United States District Court for the Southern District of New York against Terraform Labs, Pte. Ltd., Jump Crypto, Jump Trading Llc, Republic Capital, Republic Maximal Llc, Tribe Capital, Definance Capital/Definance Technologies Oy, Gsr/Gsr Markets Limited, Three Arrows Capital Pte. Ltd., Pantera Capital, Nicholas Platias, and Do Kwon.
In May 2022, the LUNA token, now rebranded as Terra Luna Classic (LUNC), lost essentially 100% of its value in just a few days. Prior to the collapse, the collective value of the Terra ecosystem was approximately $60 billion.
According to the complaint, Terra’s stablecoin UST amounted to a Ponzi scheme that was only sustained by the demand for UST created by Anchor’s excessive yields. As long as demand for UST remained high, Terra’s UST/Luna exchange mechanism would keep the supply of Luna relatively low and sustain a Luna price that could support UST’s peg. However, as soon as UST demand decreased and consumers started exchanging huge amounts of UST for Luna, Luna could enter a vicious cycle of hyperinflation, which would cause both its own price and UST to collapse.
Albright alleged that certain defendants engaged in a pattern of money laundering activity, siphoning billions of dollars from Terraform Labs to a series of private cryptocurrency wallets.
The complaint reads:
“Defendants engaged in a pattern of racketeering activity to support and profit off their scheme, namely by making fraudulent statements through interstate wire transmissions regarding Terra’s sustainability, and by laundering money out of Terraform Labs and into personal accounts. Plaintiff and the Class were harmed when Defendants’ scheme collapsed and the value of UST and other Terra coins plummeted.”
There is another class action going on in California where multiple plaintiffs seek to lead the class.
Please contact BlockTribune for access to a copy of this filing.
