North Asia

TerraUSD Co-Founders Face Lawsuit Over $40bn Crypto Collapse

 

A South Korean law firm is gathering information from investors crippled by the TerraUSD and Luna cryptocurrency meltdown earlier this month.

The LKB & Partners law firm filed a lawsuit against Terraform Labs co-founder and chief executive Do Kwon and cofounder Daniel Shin, the Seoul-based Munwha Ilbo newspaper reported.

Kim Hyeon-kwon, an attorney at the law firm, submitted the complaint to the Seoul Southern District Prosecutors’ Office, alleging fraud and fundraising without approval, South Korea’s Yonhap News Agency reported.

Investors are believed to have lost more than $40 billion after TerraUSD became untethered from its 1:1 US dollar peg. Just one crypto exchange, Binance, reportedly lost $1.6 billion.

 

ALSO SEE: Trash-Talking Crypto Whiz Created $40bn Crash – NYT

 

Terraform Dissolved Days Earlier

The law firm is soliciting information from alleged victims on its website. A questionnaire seeks a claimant’s name and contact details, as well as the type of crypto investment, date and amount of purchase.

Yang Jae-sok, a legal assistant at the firm, told Asia Financial the company had not yet decided if it would pursue cases for losses by non-Korean citizens.

Official records show Do Kwon dissolved Terraform just days before the TerraUSD stablecoin collapsed, according to Bitcoin News.

The collapse of TerraUSD and an associated crypto token called Luna has called the $180 billion stablecoin market into question.

“A stablecoin known as TerraUSD experienced a run and declined in value,” US Treasury secretary Janet Yellen said last week. “I think that this simply illustrates that this is a rapidly growing product and there are rapidly growing risks.”

 

  • George Russell

 

 

 

READ MORE:

Cryptocurrency More Like Kryptonite, Says Top Fund Manager

Russia Moves Towards Legalising Crypto, Says Minister

Crypto Collapse Vindicates China Ban – Economic Daily

 

 

 

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

Recent Posts

Taiwan Ramps up Drone Development to Guard From China Threat

Lessons have been taken from the war in Ukraine where drones have played a crucial…

57 seconds ago

North Korea Crypto Theft at Record High in 2022: UN Report

Independent sanctions monitors said South Korea estimated that North Korean-linked hackers stole virtual assets worth…

7 mins ago

US Says It’ll Stay Calm as China Admits Second ‘Spy’ Balloon

Officials say successful recovery of the balloon's debris could give the United States insight into…

52 mins ago

Asian Stocks Steady as Investors Wait on Fed Rate Signals

Japan’s Nikkei slipped while Hong Kong and China scraped together some gains but there was…

53 mins ago

Baidu Finishing Tests in March for ChatGPT-Style ‘Ernie Bot’

Chinese tech giant Baidu said internal testing for its own artificial intelligence creation will be…

1 hour ago

US Firms in Taiwan Reviewing Plans as China Tensions Rise

Nearly half of companies surveyed by AmCham are reviewing or plan to review their business…

2 hours ago