Terra’s troubles have no end in sight. The parent company, Terraform Labs, has been slammed with a class action lawsuit. The case has been filed in the United States District Court for the Northern District of California.
The lawsuit names Jump Crypto, Jump Trading LLC, Republic Capital, Republic Maximal LLC, Tribe Capital, DFinance Capital, DFinance Technologies, GSR/GSR Markets Limited, Three Arrows Capital Ptd. Ltd., Do Kwon, and Nicholas Platias. Kwon is one of the founders of Terraform Labs, and Platias was Terra’s research head.
The lawsuit was announced by Bragar Eagel & Squire, P.C., a stockholder rights law firm.
The case is on behalf of the people and entities who had purchased the Terra token (previously known as LUNA, now called LUNC). Moreover, the lawsuit also names KRT, ANC, WHALE, ASTRO, APPOLO, XDEFI, MINE, aUST, vUST, MIR, Mirrored Assets (e.g., mBTC, mETH, mVIXY, mTSLA, etc.), Liquidity Pool tokens (e.g., UST-mVIXY-LP, bLUNA-LUNA-LP, XDEFI-UST-LP, etc.), and Bonded Assets (e.g., bLUNA and bETH), purchased between May 20, 2021, and May 25, 2022.
Additionally, Investors can ask the court to appoint them as the case’s main plaintiff. They have until August 19, 2022, to do so.
What are Terra and others accused of in the lawsuit?
The lawsuit accuses Terra labs and other defendants of violating provisions of the Exchange Act. The firm is accused of misleading investors and leading them to acquire Terra Tokens at artificially inflated prices. The defendants allegedly implemented a plan and course of conduct to lure investors.
The defendants are accused of endorsing false statements, which they knew or should have known were misleading. The lawsuit also alleges that Terraform labs and other defendants violated provisions of the Securities Act by not registering the Terra token.
Additionally, the suit alleges non-securities claims, such as California common law claims for aiding and abetting and for civil conspiracy.
Lastly, the defendants are accused of violating the Racketeer Influenced and Corrupt Organizations Act (“RICO”). The suit alleges that the RICO act was violated because the entities followed a pattern of racketeering activity.
Bragar Eagel & Squire P.C. stated,
“If you purchased or otherwise acquired Terra Tokens and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out the form below. There is no cost or obligation to you.”