Liquidators of Three Arrows Capital (3AC) seek $1.3 billion from TerraForm Labs, the company behind the LUNA/UST Ponzi scheme. The claim concerns losses 3AC suffered following the 2022 unwinding of the TerraUSD (UST) and Luna (LUNA) digital assets.
3AC files a $1.3B lawsuit against #Terra Labs 🚨
3AC has taken legal action in an attempt to recover from massive losses following the 2022 collapse of #Luna. The lawsuit alleges that Terraform artificially inflated the prices of these tokens, leading #3AC to heavily invest. pic.twitter.com/i3KZIp4kDp
— Evox (@evox_dev) August 13, 2024
3AC Liquidators Claim TerraForm Labs Manipulated The VC Firm Into Buying LUNA and UST Before The Unwinding
3AC files a $1.3B lawsuit against #Terra Labs 🚨
3AC has taken legal action in an attempt to recover from massive losses following the 2022 collapse of #Luna. The lawsuit alleges that Terraform artificially inflated the prices of these tokens, leading #3AC to heavily invest. pic.twitter.com/i3KZIp4kDp
— Evox (@evox_dev) August 13, 2024
A document was filed with the U.S Bankruptcy Court for the District of Delaware on August 9.
In it, the liquidators claim that TerraForm Labs “engaged in a scheme to manipulate the open market for LUNA and UST in a manner that artificially inflated the price for the assets, which, among other things, induced 3AC to purchase LUNA and UST.”
They allege that this led 3AC to realize insurmountable losses on its investment in these tokens and its other digital asset holdings.
3AC was a prominent digital asset hedge fund that collapsed after the Luna and TerraUSD crashes. Its co-founders, Kyle Davies and Su Zhu, then launched another venture capital fund, OPNX, around one year ago.
EXPLORE: This Will Happen Once Bitcoin Breaks $72,000 And All-Time Highs
TerraForm Ordered To Pay $4.5 Billion In Agreed Settlement
In July, the Securities and Exchange Commission (SEC) announced that Terraform Labs and its co-founder, Do Kwon, have agreed to a settlement that will see the now-defunct firm pay roughly $4.5 billion.
The defendants were found liable on civil fraud charges following the collapse of TerraUSD (UST) and Terra (LUNA), which resulted in losses of over $40 billion.
Court documents show 3AC acquired $190 million worth of Luna in January 2022 as part of a $1 billion deal with other investment firms.
3AC’s Luna holdings totaled $462 million at its peak in April 2022, before the crash. By mid-May, 3AC’s Luna holdings had dropped to $2,700 in value.
Luna Co-Founder Do Kwon Waiting Nervously In Montenegro On Whether He Will Be Extradited
DO KWON’S EXTRADITION FROM MONTENEGRO FACES FURTHER DELAYS
The extradition of Do Kwon, co-founder of Terraform Labs, from Montenegro has been delayed again by the country’s Supreme Court.
Despite an appellate court’s decision to send Kwon to South Korea, the top prosecutor’s… pic.twitter.com/lrCZTAHUj9
— Crypto Town Hall (@Crypto_TownHall) August 8, 2024
TerraForm filed for Chapter 11 bankruptcy in January 2024 and is currently making moves to liquidate. Its co-founder, Do Kwon, was arrested in Montenegro last year and spent four months in prison before being released in March on bail.
He now faces charges in the U.S. and South Korea. A Montenegro court ruled that Kwon should be extradited to South Korea. A decision has yet to be made.
BONUS: Meme Games Hits $358k in Presale as Paris Olympics Conclude
The Meme Games (MGMES) is a meme coin project that combines the thrill of competitive virtual racing while using the Olympics hype as its branding.
So far, the project has generated significant interest, having already raised over $360,000 during the presale stage.
It features five popular meme characters – pitted in high-octane athletic meme battles: Doge, Pepe, Dogwifhat, Brett, and Turbo.
MGMES is set for a much-hyped launch on decentralized exchanges (DEXs) sometime in September.
Before then, you can still grab a bag at presale prices and instantly stake for an insane 570% return in staking rewards.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
