In a surprising turn of events, investors represented by lead plaintiff Michael Tobias and named plaintiff Nick Patterson have voluntarily dismissed their class-action lawsuit against Terraform Labs, Pte. Ltd., and Do Kwon. The lawsuit, initiated by Patterson in July 2022 through Scott+Scott, stemmed from substantial losses incurred by investors after the collapse of the Terra ecosystem in May 2022. However, this dismissal comes without providing any specific reasons, leaving many in the crypto community puzzled.
A Mysterious Decision
The abrupt decision to drop the lawsuit has left the crypto world buzzing with speculation. While the court filing mentioned the voluntary dismissal “without prejudice,” it implies that Patterson and the investors he represented will not receive any compensation for dropping the case. This leaves observers wondering whether new developments or negotiations behind the scenes influenced this unexpected legal maneuver.
Despite the voluntary dismissal of this class-action lawsuit, the United States Securities and Exchange Commission (SEC) continues its relentless legal action against Terra and Do Kwon. The SEC alleges that Terra and Kwon played a significant role in orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities. This ongoing regulatory scrutiny casts a shadow over the Terra ecosystem’s integrity and adds to the uncertainty surrounding its future.
Terra Luna Classic (LUNC) in the Spotlight
Shortly after the Terra ecosystem’s collapse in May 2022, the project rebranded its crypto token LUNA to Terra Luna Classic (LUNC). At the time of writing, LUNC’s price stands at a mere $0.00006, a stark reminder of the tumultuous events that unfolded earlier in the year. Investors who have remained loyal to LUNC now face the challenge of rebuilding their trust in the project amidst ongoing legal battles and regulatory scrutiny.
The voluntary dismissal of the class-action lawsuit against Terra and Do Kwon is not an isolated incident. On January 11, Albright Capital also chose to withdraw its lawsuit against Terraform Labs, making similar allegations of fraud. These withdrawals raise questions about the strength of the legal claims against the entities involved and the potential complexities surrounding the cases.
Global Investigations into Kwon
In addition to the legal actions in the United States, international authorities are intensifying their investigations into Do Kwon. South Korean law firm Kim & Chang confirmed that Kwon had paid them $7 million before the collapse of TerraUSD and LUNA, while reports suggest that Korean and Singaporean authorities are tracking money sent to the company through various payments.
Swiss prosecutors have also made significant strides, seizing approximately $26 million in digital assets and US dollars owned by Kwon in a Switzerland-based digital asset bank. Kwon’s current detention in Montenegro stems from a four-month prison sentence he received for attempting to travel with a falsified passport on June 19.
As the crypto world watches these developments with bated breath, one thing remains clear: the saga of Terra and Do Kwon is far from over, and the final chapter of this intriguing crypto tale has yet to be written.