The class action complaint claims Kwon and his colleagues lied to investors.
South Korean officials reportedly filed an arrest order for him in September.
Investors who lost roughly $57 million in the UST de-pegging incident have launched a lawsuit against Terraform Labs’ founder, Do Kwon. The class action complaint claims Kwon and his colleagues lied to investors about the UST stablecoin’s price stability.
According to the complaint, investors “believed that [Terra USD] would be a token that was stable by design [and] whose price would always be pegged to the US Dollar.”
No Progress in Investigation
Furthermore, they think Do Kwon purposely designed the Anchor Protocol, a high-interest rate Defi protocol to attract clients into purchasing more UST. Anchor Protocol was basically a lending & borrowing platform which launched with a 19.5% interest rate – an industry first.
Nonetheless, the stablecoin mechanism died in May of 2022, sending its value plunging precipitously in a matter of minutes. The complaint says that Do Kwon kept people optimistic by tweeting that “everything was under control” after UST’s apparent demise.
Since the UST collapse, the once-famous Terraform founder has faced several legal charges and threats.
South Korean officials reportedly filed an arrest order for him in September, and Interpol placed him on its Red list, urging that he be located and detained by law enforcement.
In contrast, Kwon has been highly present on social media, even going so far as to tweet “making zero effort to hide” to let everyone know. He seemed to be working on the upgraded Terra blockchain (also known as Luna 2.0), and he promised that exciting new advancements were on the horizon. He also appeared on a handful of talk programmes and podcasts, where he categorically rejected allegations of fraud or malfeasance.