A new class action lawsuit has been brought on TerraForm Labs, its founder Do Kwon, its director of research Nicholas Platias, and other companies.
The class action complaint has been filed by Bragar Eagel & Squire PC accusing the defendants of breaking the California Common Law, the Exchange Act, the Securities Act, and the Racketeer Influenced and Corrupt Organizations Act (RICO).
Terra faces three class action lawsuits
In a news statement on July 25, Bragar Eagel & Squire PC disclosed that it has filed a class action lawsuit against TerraForm Labs, its founder Do Kwon, and Nicholas Platias.
In addition, affiliates like GSR/GSR Markets, Three Arrows Capital, Republic Capital, Republic Maximal, Tribe Capital, DFinance Capital, and DFinance Technologies (3AC).
All investors, including people and businesses, who bought or obtained LUNA tokens between May 20, 2021, and May 25, 2022, are included in the class action lawsuit.
In the case, Terra Labs and other defendants are charged with breaking Exchange Act rules. Investors claim that the company misled them, causing them to purchase LUNA Tokens at inflated rates. The defendants reportedly carried out a strategy and set of actions to entice investors.
The defendants are charged with approving false claims that were deceptive and of which they knew or ought to have known. The complaint also asserts that by failing to register their token, Terraform Labs and other defendants violated Securities Act restrictions.
The investigating teams from South Korea and the United States had already agreed to exchange information on their investigations into Do Kwon and the LUNA disaster.
In reality, South Korea’s investigative team searched 15 cryptocurrency businesses and exchanges, as well as co-founder of TerraForm Labs Daniel Shin’s residence and offices, last week, stepping up inquiries into claims that Do Kwon and TerraForm Labs committed fraud.
Terra’s USTC and LUNC values have fallen as a result of the new round of investigations; previously, they had been steadily rising as a result of community-led token burning.