Terra developer hit with lawsuit
Illinois resident Nick Patterson has sued Terraform Labs and venture capitalists for promoting failed stablecoin project
Terraform Labs, the company that backs the Terra blockchain, has been sued with a class-action lawsuit.
The suit is also targeted at Tribe Capital. Republic Capital and other venture capital firms that have invested in the failed blockchain and promoted its stability. These companies are listed as defendants in addition to the Terra.
Plaintiff Nick Patterson has accused Terraform Labs of selling unregistered securities and making a series of false and misleading statements about the ecosystem. In particular, the Terra team praised the stability of TerraUST and the Anchor protocol. Investors were guaranteed a 20% stake.
Both inexperienced buyers and professional investors were lured by Terra’s “begotten song,” the suit says.
About 75% of UST’s entire market cap was deposited into Anchor due to aggressive marketing.
The lawsuit drew comical reactions on social media over screenshots of tweets posted by Terraform co-founder Do Kwon showing a history of his attempts to downplay any criticism of Terra and silence his critics.
The claimant is seeking a refund in the form of the US dollar value of the difference between the purchase price of the Terra tokens and the price at which these tokens were sold. Patterson claims that the defendants were able to gain a financial advantage from selling their cryptocurrencies at inflated prices.
As reported by U.Today, the U.S. Securities and Exchange Commission recently launched another investigation into Terraform Labs to determine whether or not the tokens in question were unregistered securities.