Recently, a new class action lawsuit was filed against Terra. In the future, further legal action against the stablecoin provider will probably follow.
Bragar Eagel &Squire announced in a press release on Sunday that they would file a lawsuit against Terra. The law firm specializes in complex financial processes and represents individual and institutional investors in the areas of commercial law, securities and derivatives.
The lawsuit is the second class action against Terra. Nick Patterson initiated the first class action lawsuit on July 17, 2022 through the law firm Scott+Scott.
It is not the last lawsuit that the Terra team of Do Kwon has to reckon with. On Tuesday, Terra community member FatManTerra warned the company that in the meantime, lawsuits are also pending in countries other than the USA.
Terra violated several laws
According to Bragar Eagel &Squire, the company violated the Stock Exchange Act by “a plan, a scheme and a course of action” the people who followed him.“To deceive small investors” and finally encouraged them to, “To buy Terra tokens at artificially inflated prices”.
In addition, the law firm claims that Terraform Labs (TFL) violated the Securities Act by selling unregistered securities. These allegations are similar to the points made by Scott+Scott in the July 17 lawsuit.
The statement of claim by Bragar Eagel & Squire also alleges that TFL violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and was involved in a fundamentally fraudulent, dishonest and punishable operation. This will organised crime call.
The law firm Bragar Eagel & Squire also filed a second major lawsuit this Sunday against Alexander Mashinsky and Celsius Network LLC.
Terra and Terraform Labs will have to expect further legal proceedings in the future, even if the two companies will already have more than enough to deal with two class actions in the USA.
On Tuesday, senior Terra community member FatManTerra announced that ”even if Terra is not looking for more problems, the problems will now come to you”. In a Twitter thread, the former follower explained how his initial enthusiasm changed when the community member learned more about the inner workings of TFL:
“I was deeply disappointed when I saw how a system I really believed in – decentralized money, good returns on savings and an exchange that everyone can access – collapsed. It was a bittersweet ending.”
Terra: A picture of BeInCrypto.com
FatManTerra initially thought that “Terra had been attacked by a malicious actor and nothing could have been done”.
FatManTerra further claimed that “TFL had falsified the chai volume on the blockchain in order to create Terra the illusion of a real demand. The Jump company had secretly saved UST in 2021, even though the company knew that the system was unsustainable. TFL and Hashed had manipulated the anchor volume to create an artificial stability.”
With this information, FatManTerra then came to the conclusion that “Terra has been a brilliantly disguised fraud all along”.
The community member who is helping to organize participation in the Scott+Scott lawsuit now declares that further legal action will be taken in other countries.