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Class-Action Lawsuit Against Terra and Do Kwon Voluntarily Dismissed

2 mins
Updated by Kyle Baird
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In Brief

  • Investors voluntarily dismissed a class-action lawsuit against Terraform Labs and co-founder Do Kwon.
  • No explanation was provided for the dismissal of the case, which was filed by Nick Patterson in July 2022.
  • Kwon, currently in a Montenegrin prison for passport fraud, reportedly paid $7M to South Korean law firm Kim & Chang.
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Investors have withdrawn a class-action lawsuit against Terraform Labs (Terra) and its co-founder, Do Kwon. The lawsuit alleged crypto assets security fraud, resulting in the loss of investor funds.

Nick Patterson initiated the lawsuit in July 2022 through Scott+Scott after the collapse of the Terra ecosystem.

Investors Elect To Drop Lawsuit Against Terra And Do Kwon

In a recent court filing, Patterson was representing investors “similarly situated” to himself. Patterson incurred losses due to his investment in TerraUSD before the Terra ecosystem collapsed in May 2022. However, the filing implies that he won’t receive any compensation for dropping the court case.

“Lead Plaintiff Michael Tobias and named plaintiff Nick Patterson (together, “Plaintiffs”), hereby voluntarily dismiss this case, in its entirety, without prejudice, only against defendants Terraform Labs, Pte. Ltd., and Do Kwon.”

The lawsuit’s dismissal came without any reasons provided.

Meanwhile, the United States Securities and Exchange Commission (SEC) continues its legal action against Terra and Kwon. The SEC claims that Terra and Kwon had a part in,

“Orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.”

Shortly after its crypto token LUNA collapsed in May 2022, it rebranded it to Terra Luna Classic (LUNC).

At the time of publication, LUNC’s price stands at $0.00006.

Terra Classic (LUNC) Price Chart 1 Month. Source: BeInCrypto
Terra Classic (LUNC) Price Chart 1 Month. Source: BeInCrypto

On January 11, Albright Capital chose to voluntarily drop its lawsuit against Terraform Labs. It was alleging similar allegations of fraud.

Authorities Continue Ongoing Investigation Into Kwon

Meanwhile, authorities in other countries are also investigating Kwon.

On April 17, the South Korean law firm Kim & Chang confirmed that Kwon had paid them $7 million before the collapse of TerraUSD and its sister coin, LUNA.

This comes after a KBS News report stating that Korean prosecutors and Singapore law enforcement were tracking money sent to the company in various payments.

On the other hand, Swiss prosecutors took hold of roughly $26 million in digital assets and US dollars owned by Kwon on June 24. The assets were reportedly held in Switzerland-based digital asset bank Signup.

Kwon is currently detained in Montenegro. He received a four-month prison sentence on June 19 for attempting to travel with a falsified passport.

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.
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