Law firm Bragar Eagel & Squire announced in a press release yesterday that it has filed a class action lawsuit against Terraform Labs, Do Kwon and other partners in the Northern Territory of California on behalf of investors in the Terra ecosystem.

Terraform Labs, the company behind the Terra ecosystem, as well as founders Do Kwon and Nicholas Platias, as well as other companies with whom the company has commercial relations, have also been accused of providing misleading information about the values ​​of Terra's tokens. Among the companies sued is Three Arrows Capital. In addition, in the lawsuit filed, it is claimed that the parties involved are selling unregistered securities, and in this way, the parties are accused of defrauding investors with the promise of high income.

Do Kwon Terra

This is the second class action lawsuit brought against Terraform Labs and its affiliates. In June, after the Terra ecosystem collapsed in May, another law firm filed a class action lawsuit against Terraform Labs with similar allegations. Apart from this new development, active days began to be experienced regarding Terraform Labs. Most recently, South Korean authorities raided the home of Terraform Labs co-founder Daniel Shin and offices allegedly associated with the company. In these raids, authorities reportedly seized all documents in an attempt to find evidence against fraud.

Terra Luna-7

Terraform Labs was a crypto company that attracted attention with its rapid growth in the crypto money markets and saw two crypto assets in its ecosystem enter among the top 10 cryptocurrencies. Unable to meet the bulk sales of the stable crypto asset UST in early May, the company could not prevent all its reserves from melting. Meanwhile, UST's reserve cryptocurrency, LUNA, was extremely negatively affected by this situation, seeing its value almost zero. The measures taken in the following days did not work either due to the disappearance of the environment of trust. Now Terraform Labs, the institutions it is in contact with, and its founding partners are in an inextricable situation, facing lawsuits against them. As a result, the rapidly growing crypto project collapsed much faster, wiping out about $40 billion from the market. The collapse of Terra caused the panic environment to increase, affecting other cryptocurrencies in the market extremely negatively and became the catalyst for the current decline.