Terra investors file major lawsuit against Do Kwon, CEO Do Kodo

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Terra investors file major lawsuit against Do Kwon, CEO Do Kodo

Aggrieved Terra investors have filed a major lawsuit against Terraform Labs and two of its executives, including its controversial CEO, Do Kwon, for violating the Racketeer-influenced and corrupt Organizations Act.

Following the catastrophic collapse of Terra due to the implosion of its stablecoin TerraUSD, Terraform Labs and some of its executives have been slapped with multiple class-action lawsuits. The latest is the suit filed by Plaintiff Matthew Albright on Aug. 25 in New York federal court on behalf of a proposed nationwide class of all persons and individuals who bought UST between May 1, 2018, and June 15, 2022.

Law360 has reported that some of the charges in the case are artificial inflation of Terra's UST and releasing false information following the collapse to cover for the alleged $80 million money laundering scheme. The report also said that high-yield savings application on the Terra blockchain - the anchor protocol - is available on the network's platform.

The plaintiff alleges that some of the accused defendants were involved in various money laundering activities that allowed them to allegedly siphon millions of dollars from the company to their personal crypto wallets. Albright argued that Terra's stable was a that maintained its value because of the excessive yields of Anchor Protocol, a decentralized finance protocol that offers stablecoin-based lending.

s UST/Luna exchange mechanism will keep the supply of Luna relatively low and maintain a Luna price that could support UST's peg, the lead plaintiff said. Interestingly, Kwon reportedly hired a lawyer in South Korea following his 'bare-all' interview claiming that authorities in his home country have not yet filed a single case against him.

After this story went live, International Business Times received an email from Terraform Labs' spokeswoman, which contained the company's official statement regarding the RICO lawsuit.

The TFL spokeswoman did not elaborate on the statement, saying: "It is clear that TFL has a good track record and that we have a lot to learn from.