Aggrieved Terra Investors have filed a major lawsuit against Terraform Labs and two of its executive directors, including its controversial CEO Do Kwon, for violating the Racketeer Influenced and Corrupt Organizations Act.
Following the stunning collapse of Terra because of the implosion of its stablecoin TerraUSD, the Terraform Labs and some of its executives have been slapped with multiple class-action lawsuits. The suit, filed by plaintiff Matthew Albright, is a proposed nationwide class of all individuals and individuals who bought UST between May 1, 2018, and June 15, 2022.
Some of the charges against the defendant include artificial inflation of Terra of its UST and releasing false information following the collapse to cover for the alleged $80 million money laundering scheme, legal news outlet Law360 reported. High-yield savings application on the Titan blockchain - the anchor protocol - read an excerpt of the report.
The plaintiff alleges that some of the 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 alleged 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.
UST/Luna exchange mechanism will maintain the supply of Luna relatively low and support a Luna price that could support UST's peg, the lead plaintiff said. After his 'bare-all' interview saying that authorities in his home country have not filed a single lawsuit against him, Kwon reportedly hired a lawyer in South Korea.
After the story went live, International Business Times received an email from Terraform Labs' spokeswoman and it included the company's official statement regarding the RICO lawsuit.
The TFL spokeswoman said it was not clear whether the suspension was the result of a breach.