Terra faces second class-action lawsuit, more in the pipeline.
Do Kwon’s Terra is facing a second class action lawsuit from Bragar Eagel & Squire. This comes after Nick Patterson filed a class action on July 17 through Scott+Scott. Word is that Terra has a pile of lawsuits, including in jurisdictions outside of the US as well, pending.
The new lawsuit claims that Terra violated the Exchange Act by carrying out a plan, scheme, and course of conduct to deceive retail investors. The platform is alleged to have encouraged the investors to purchase Terra Tokens at artificially inflated prices. The law firm says that Terraform Labs violated the Securities Act by selling unregistered securities. Scott+Scott has made similar accusations.
Moreover, Terraform Labs is stated to have violated the Racketeer Influenced and Corrupt Organizations (RICO) Act. It was engaged in a fundamentally fraudulent and dishonest criminal operation defined by a pattern of racketeering activity. FatManTerra, a former true believer, tweeted that his enthusiasm for Terra dropped after he learned about the inner workings of the company. It left him heartbroken as he had truly believed in the system of decentralized money, better savings, and a stock exchange that everyone can access.
The crypto enthusiast said Terra collapsed and it was a bittersweet ending. FatManTerra alleged that Terraform Labs had been faking Chai volume on the blockchain to give Terra the illusion of real-world demand. In 2021, Jump had secretly bailed out UST; he had known all along that it was not sustainable. The crypto trader said TFL and Hashed had been shamming Anchor volume – creating a facade of stability. As such, FatManTerra said Terra had been a brilliantly disguised fraud all along.