- The capital initiates a $1.3 billion court action against TerraForm Labs over the LUNA incident.
- The civil lawsuit alleges that TerraForm Labs altered economic circumstances, resulting in an enormous monetary injustice.
- The failure of TerraUSD and LUNA in 2022 greatly harmed 3AC's financial stability.
3AC has filed a $1.3 billion lawsuit against TerraForm Labs. The petition claims that the company played the business, leading to the 2022 dismissal of TerraUSD (UST) and LUNA. This crash notably contributed to the downfall of 3AC. Once a major player in the cryptocurrency world, 3AC argues that TerraForm's actions caused severe financial damage.
Charges of Market Deception
3AC has accused the Labs, co-founded by Do Kwon, of interfering with the TerraUSD and LUNA markets. This fraud inflated the prices of these tokens, which led 3AC to make large investments.
The action claims that TerraForm’s actions caused these losses. The liquidators argue that the crash also harmed 3AC’s other digital assets.
Do Kwon’s Constitutional Trial
In January 2024, TerraForm filed for bankruptcy in Delaware, U.S., hampering 3AC's recovery efforts. How much the liquidators can get back remains unclear. Meanwhile, TerraForm's co-founder faces several legal challenges. In April 2024, a Manhattan jury found him guilty of civil fraud charges related to the collapse of TerraUSD and LUNA.
His legal issues extend beyond the United States. Since March 2023, he has been detained in Montenegro after being arrested for using fake travel documents. Both South Korean and U.S. authorities have sought his capture. The process has faced many delays. Recently, on August 8, Montenegro's Supreme Court postponed the exchange at the request of the top magistrate.
Broader Implications for the Crypto Economy
The collapse of TerraUSD and LUNA in 2022 affected the crypto space . Investors worldwide lost billions, which brought out the risks associated with digital assets. This lawsuit by 3AC’s administrators against TerraForm Labs and Do Kwon brings attention to these risks and raises questions about the future of cryptocurrency regulation.
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