- Terra CEO is facing a lawsuit for the fraudulent misrepresentation of TerraUSD.
- The claimants seek to recover their investment losses and other unspecified “aggravated damages.”
- Just a month ago, Interpol issued a red notice in the name of Do Kwon.
As it appears to be Terra’s co-founder and CEO, Do Kwon’s troubles are not coming to an end anytime soon. In addition to the ongoing investigation by federal authorities, Do Kwon is also at the center of a few lawsuits, the most recent of which came to light recently.
According to the Wall Street Journal’s report from Friday, Do Kwon is currently facing another lawsuit which was filed back on September 23. Filed on behalf of over 350 investors, the lawsuit alleges “fraudulent misrepresentation” at the hand of Do Kwon. These allegations are in concern with the stability of TerraUSD, Terra’s algorithmic stablecoin.
The de-pegging of the stablecoin and the eventual collapse of the Terra ecosystem triggered a market-wide crash back in May and caused billions of dollars worth of losses to investors. The lawsuit also targets Anchor calling its 20% APY and the protocol a “principal-protected stablecoin savings product.”
Countering the claims, Terraform Labs spokesperson stated,
“There is a fundamental difference between a public market event and fraud. The risks were publicly known and discussed, and the underlying code was open-sourced.”
In addition to recovering their investment losses, the claimants are also seeking to recoup some unspecified “aggravated damages”.
The past and the future
While this lawsuit only took place last month, many others, such as class action suits from other legal firms such as Grant & Eisenhower and more, are yet to reach their conclusion.
Furthermore, Do Kwon has been on the government’s crosshair for months now. The South Korean prosecutors are already searching for him, and just last month, Interpol issued a worldwide search warrant – a “red notice – in his name.
Although Do Kwon has stated that he is not on the run and is willing to fully cooperate with any government agency, he is yet to be found.