Another player has joined the class action lawsuit that has been filed against Terra, and the beleaguered stablecoin firm can expect that further legal action will be taken against it in the near future.
Bragar Eagel & Squire announced their intention to join the case against Terra via press release on Sunday. The law firm specializes in complex financial litigation representing individual and institutional investors in commercial law, securities, and derivatives.
The law firm Nick Patterson filed a class action lawsuit through Scott+Scott on July 17. Bragar Eagel & Squire intends to add its own expertise to the mix.
It is not the last lawsuit that Do Kwon’s Terra team can expect. On Tuesday, community member FatManTerra warned the company that further lawsuits are now pending, in jurisdictions outside of U.S. as well.
Whole lot of legal
According to Bragar Eagel & Squire, Terra violated the Exchange Act by “carrying out a plan, scheme, and course of conduct” that was intended to “deceive retail investors” and ultimately encouraged them “to purchase Terra Tokens at artificially inflated prices.”
Furthermore, the law firm states that Terraform Labs (TFL) violated the Securities Act by selling unregistered securities. These claims echo the points argued by Scott+Scott in their earlier July 17 filing.
The press release further alleges that TFL violated the Racketeer Influenced and Corrupt Organizations Act (RICO), and was engaged in what was a fundamentally fraudulent and dishonest criminal operation defined by “a pattern of racketeering activity.”
Terra and Terraform Labs do not have their miseries to seek. With a major class action lawsuit in the U.S. Do Kwon and his team should have more than enough to contend with.
On Tuesday, leading community member FatManTerra announced that even if Terra does not go in search of further troubles, trouble is now looking for them. In a Twitter thread, the former true believer explained how his early disappointment changed as the community member learned more about the inner workings of TFL.
“I was heartbroken to see a system I truly believed in – decentralized money, better savings, and a stock exchange that everyone can access – collapse, it was a bittersweet ending,” said FatManTerra, however, he consoled himself that, “Terra had been “attacked” by a malicious actor and nothing could have been done.”
FatManTerra went on to allege that, “TFL had been faking Chai volume on the blockchain to give Terra the illusion of real-world demand. Jump had secretly bailed out UST in 2021 despite knowing it was not sustainable. TFL & Hashed had been spoofing Anchor volume creating a facade of stability.”
With these revelations in mind, FatManTerra came to the final conclusion that, “Terra had been brilliantly disguised fraud all along.”
The community member who is helping to organize participation in the Scott+Scott legal case now says that further legal action in other jurisdictions will now take place.
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[Edit Aug. 1 2022: An earlier version of this article stated that Bragar Eagel & Squire were bringing a fresh lawsuit rather than joining the existing one.]
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