Investors withdraw class-action lawsuit against Terraform Labs and co-founder Do Kwon, while SEC’s legal action continues. Ongoing investigations into Kwon’s financial activities in multiple countries.
Investors have withdrawn a class-action lawsuit against Terraform Labs (Terra) and its co-founder Do Kwon. The lawsuit alleged crypto assets security fraud, resulting in the loss of investor funds. Nick Patterson initiated the lawsuit in July 2022 through Scott+Scott after the collapse of the Terra ecosystem.
In a recent court filing, Patterson was representing investors “similarly situated” to himself. Patterson incurred losses due to his investment in TerraUSD before the Terra ecosystem collapsed in May 2022. However, the filing implies that he won’t receive any compensation for dropping the court case.
The lawsuit’s dismissal came without any reasons provided.
Meanwhile, the United States Securities and Exchange Commission (SEC) continues its legal action against Terra and Kwon. The SEC claims that Terra and Kwon had a part in “orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.”
Authorities in other countries are also investigating Kwon’s financial activities. South Korean law firm Kim & Chang confirmed that Kwon had paid them $7 million before the collapse of TerraUSD and its sister coin LUNA. Swiss prosecutors have seized around $26 million in digital assets and US dollars owned by Kwon.
Kwon is currently detained in Montenegro after receiving a four-month prison sentence for attempting to travel with a falsified passport.