Investors Drop Class-Action Fraud Lawsuit against Terraform Labs and Co-founder Do Kwon
Summary:
The class-action fraud lawsuit against Terraform Labs and its co-founder Do Kwon has been voluntarily dismissed by the group of investors behind the case in the U.S. District Court for the Northern District of California. This dismissal, however, does not spell the end of Kwon's legal woes, as Terraform Labs and Kwon remain under global scrutiny following the collapse of Terraform Labs, which allegedly sparked a significant crypto market crash.
The class-action lawsuit accusing Terraform Labs and its co-founder, Do Kwon, of fraud has been abandoned by the group of investors behind the case. On September 28, a notice of voluntary dismissal was filed in the U.S. District Court for the Northern District of California by the legal team representing plaintiff Nick Patterson. The case was brought forward on behalf of all investors, but the lawsuit has now only been dismissed against Terraform and Kwon, with the exact reasons for the case dismissal remaining unexplained. The court document read that no motion for summary judgment had been filed, nor had the complaint received a response from Terraform Labs. Given that the dismissal is without prejudice and the proposed class has not been certified, members of the proposed class will not be bound by this dismissal.
Terraform Labs' legal struggles were not over with this dismissal. The lawsuit was initially set in motion in June 2022, after the collapse of Terraform Labs, which some attribute as the catalyst for a significant crytpo market downturn. Kwon and his company have since found themselves under global scrutiny for their alleged role in a scheme designed to deceive investors. In February, Kwon and Terraform were targeted by the U.S. Securities and Exchange Commission with a civil lawsuit, accusing them of engineering a massive cryptocurrency asset securities fraud. Stark enforcement followed in Montenegro, with Kwon's arrest in March and subsequent four-month prison sentence for utilizing counterfeit travel documents. The details surrounding his release, whether he'd remain in Montenegro or face extradition to the U.S. or South Korea, were not evident at the time the news went public.
Published At
10/2/2023 9:25:25 PM
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