Class action lawsuit against Terraform Labs dropped

Class action lawsuit against Terraform Labs dropped

It's been more than half a year since the crypto space's first major player went under, with the decidedly unstable "stablecoin" UST losing its peg and dragging its creator, Terraform Labs, down with it.

TFL founder Do Kwon has since been on the run and is reportedly currently hiding in Serbia after brief stays in Mauritius, Dubai and so on. Multiple lawsuits have been filed against Terraform Labs and Kwon, accusing both of them of fraud, among other things. However, one of those lawsuits has just been dropped.

No reason for termination given

The class action lawsuit was filed by Matthew Albright of Albright Capital and was dismissed on January 9th.

“Plaintiff Matthew Albright hereby gives notice that the foregoing lawsuit is voluntarily dismissed without prejudice.”

The lawsuit was filed against Terraform Labs, the Luna Foundation Guard, Do Kwon, and several other Terra-related parties. The case was closed “without prejudice and without costs,” meaning it can be reopened at any time. However, if a case is voluntarily dismissed, it is difficult to imagine why it should be refiled.

However, this is just one case. There are several other lawsuits against the above companies, none of which are close to resolution to date.

3AC co-founder comments on the dismissal

Not long after Terraform Labs unceremoniously collapsed, another high-profile player in the crypto industry, Three Arrows Capital, also went under.

At the time, 3AC founders blamed the collapse of their asset management firm in part on the collapse of UST, claiming a significant portion of their reserves had evaporated overnight due to the de-pegging of the controversial stablecoin.

At the time of writing, 1 USTC (UST Classic), which should be pegged to the US dollar, is currently worth $0.02, according to CoinGecko.

Zhu Su - the co-founder of 3AC - commented on the firing and reportedly hinted at a possible future media cover-up.

Curious how long crypto native media will take to report this sudden voluntary dismissal of the class action lawsuit against the Luna Foundation and Luna investors pic.twitter.com/8SyMhB4u4g

— Zhu Su 🔺 (@zhusu) January 10, 2023

Reactions to the post were mixed, with its audience split between those who believed Zhu was simply trying to hide his own failed operation and Terra fans who claimed this was the start of the project's redemption.

However, there are other cases ongoing against Terra at the moment, and Do Kwon is still the subject of an Interpol Red Notice.

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