An Illinois resident sued Terraform Labs, its founder Do Kwon, and several VC firms that make up the Luna Foundation Guard (LFG) on claims that that the defendants violated federal securities laws and misled investors.
The plaintiff, Nick Patterson, filed a lawsuit
seeking class action status on Friday in the Northern District of California in
the hopes of recouping losses and any injunctive or punitive fees from a jury
trial.
Patterson alleged both California state and
federal law violations against the defendants.
The plaintiff said the "Terra
Tokens," (a catchall term for both UST, LUNA and other tokens in the
ecosystem) resembled securities, even if investors may not have been able to
recognize them as such, pointing to how Terraform Labs and the VCs behind the
LFG marketed the project.
LUNA and UST both collapsed in
dramatic fashion last month after the stablecoin lost its peg. An attempt to
relaunch LUNA has so far failed to bring investors back to the project.
The filing, which includes screenshots from
Twitter, heavily quotes Kwon and his dismissive reactions to other parties who
claimed UST faced a depegging risk.
In addition to Terraform Labs and Do Kwon, the
suit lists as defendants Definance Capital/ Definance Technologies Oy, GSR/GSR
Markets Limited, Jump Crypto, Jump Trading LLC, Nicholas Platias, Republic Capital,
Republic Maximal LLC, Three Arrows Capital, Pte. Ltd. and Tribe Capital.
Three Arrows Capital is facing financial
woes of its own.
Source: coindesk.com