Albright Capital has dropped its lawsuit in opposition to Terraform Labs and its founder Do Kwon, in keeping with a Discover of Voluntary Dismissal filed in U.S. District Court docket on January 9. Earlier than its dismissal, the lawsuit had alleged that the corporate had violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by working the stablecoin, UST, as a “Ponzi scheme.”
Three Arrows Capital (3AC) co-founder Su Zhu posted the dismissal to Twitter, saying:
Curious how lengthy it’ll take cryptonative media to report on this sudden voluntary dismissal of sophistication motion in opposition to Luna basis and Luna traders pic.twitter.com/8SyMhB4u4g
— Zhu Su (@zhusu) January 10, 2023
Zhu had beforehand claimed that the chapter of 3AC was partially attributable to UST’s collapse. The lawsuit was dismissed “with out prejudice,” which means that the plaintiff has the choice to refile it sooner or later if desired.
Associated: Terra unintentionally airdropped tokens to the mistaken individual
US Greenback Terra (UST) was an algorithmic stablecoin created by Terraform labs. It ran on the Terra community, whose native coin was LUNA. UST was backed by an equal greenback quantity of LUNA as collateral, and every UST coin was alleged to be pegged to $1 on the secondary market. Nevertheless, LUNA collapsed in worth in Might, inflicting UST to change into undercollateralized. UST misplaced its peg consequently and is now price solely $0.02 per coin.
South Korean authorities issued an arrest warrant for Kwon in September, and the corporate has confronted a number of lawsuits alleging that UST was a fraud. This specific lawsuit alleged that UST “amounted to a Ponzi scheme that was solely sustained by the demand for UST created by Anchor’s extreme yields.” Nevertheless, the lawsuit has now been dismissed by the plaintiff.
