{"id":63157,"date":"2022-06-20T13:01:42","date_gmt":"2022-06-20T10:01:42","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=63157"},"modified":"2025-09-05T22:26:17","modified_gmt":"2025-09-05T19:26:17","slug":"do-kwon-accused-of-false-statements-about-terrausds-stability","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/do-kwon-accused-of-false-statements-about-terrausds-stability\/","title":{"rendered":"Do Kwon accused of false statements about TerraUSD’s stability"},"content":{"rendered":"

A class-action lawsuit filed<\/a> in the Northern District of California by Terra investors against Terraform Labs (TFL) and its head Do Kwon seeks to recover the purchase price of the tokens.<\/p>\n

Kwon is accused of selling unregistered securities, as well as making false statements about the stability of the Terra stablecoin TerraUSD (UST) and the associated token LUNA.<\/p>\n

The list of defendants named includes Jump Crypto, Jump Trading, Republic Capital, Republic Maximal, Tribe Capital, DeFinance Capital, DeFinance Technologies, GSR Markets, Three Arrows Capital and Nicolas Platias.<\/p>\n

The plaintiffs allege that the members of the non-profit Luna Foundation Guard misled UST\/LUNA investors about the sufficiency of the available reserve fund to shield them from a \u201cbank run.\u201d<\/p>\n

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\u201cHowever, between May 6 and May 9, structural weaknesses in the Terra ecosystem led to UST and LUNA prices tumbling by about 91% and 99.7%, respectively,\u201d the suit states.<\/p>\n<\/blockquote>\n

Investors also noted that, given all the signs of investment contracts, the Terra tokens did not file any registration statements with the SEC<\/span>.<\/p>\n

The plaintiffs seek monetary damages and legal costs. Representatives of TFL did not comment on the matter.<\/p>\n

Meanwhile, South Korean media reported<\/a> that interagency group<\/a> at the Seoul Southern District Prosecutor’s Office imposed a travel ban on one of Terra’s key developers, a certain \u201cMr. A.\u201d<\/p>\n

Earlier, he claimed that Do Kwon allegedly secretly sold the coin to unnamed \u201cinstitutions,\u201d earning a sum \u201cenough to buy an island.\u201d The investigation remains to determine whether these funds were used to manipulate the token\u2019s market price.<\/p>\n

Media outlets speculate that law enforcement may soon conduct searches and seize the company’s documents. The prosecutor’s office is coordinating the investigation timetable with Terra’s officials. The agency is also conducting a legal review of Do Kwon’s involvement in alleged fraud.<\/p>\n

On May 8, UST lost its peg to the U.S. dollar<\/a>. This occurred amid a withdrawal of assets from the Anchor protocol as the yield on deposits fell to 17.87%.<\/p>\n

On May 10, the asset traded below $0.62<\/a>. The decline continued on May 11<\/a>, after which the cryptocurrency used to mint UST, LUNA crashed to $0.30<\/a>.<\/p>\n

Following the crash, South Korean financial regulators held an emergency meeting<\/a> to assess the incident\u2019s implications. According to reports, local authorities began a probe into Terraform Labs employees<\/a> as part of the investigation.<\/p>\n

In May, one of South Korea’s leading law firms, LKB & Partners, announced plans to sue Kwon<\/a>.<\/p>\n

In June, Bloomberg sources said the U.S. Securities and Exchange Commission had opened an investigation into UST<\/a>.<\/p>\n

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