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US Investors Drop Terraform Labs Lawsuit

Tim Alper
Last updated: | 2 min read
Source: Yanik Chauvin/Adobe

The American investment firm Albright Capital has pulled out of a class action lawsuit against Terraform Labs, the firm behind the Terra protocol and the Terra Luna Classic (LUNC) coin.

Per court documents, Albright – along with its fellow claimants, the legal firms Scott & Scott and Bragar Eagel & Squire – voluntarily retracted its claims “without prejudice and without costs against the defendant(s)” at a branch of the New York Southern District Court.

Albright et al had hoped to secure a legal victory over Terraform and its Co-founder Do Kwon, as well as US associate companies. The claimants had hoped to unite scores of disgruntled Terra investors smarting from the May 2022 ecosystem collapse.

Terra Luna Classic (LUNC) prices over the past 24 hours. (Source: CoinMarketCap)

In the legal sphere, a voluntary retraction of this sort is often carried out in a bid to protect the claimant from possible negative financial consequences – in the face of a likely unfavorable verdict.

The move comes just days after Terraform submitted a motion to the same court, asking it to dismiss the lawsuit. Lawyers provided a 44-page document backing up their claims.

A Terraform spokesperson told Cryptonews.com and other media outlets that “it was demonstrated that [the claimants] had sustained no injury” in the case.

The spokesperson added that the neither firm “nor its principles” had “committed any wrongdoing.”

And Terraform continued:

“South Korean prosecutors had nine of their nine detention warrants rejected by the courts. The intervening months have confirmed that the facts are on our side, and more are and will continue to come to light.”

Terraform ‘Deceptive Promotion’ Claims Retracted as Lawsuit Fails

Albright et al had sought to prove that Terraform Labs had used “deceptive promotion” methods to sell Terra ecosystem coins. The claimants had also alleged that Terraform executives had withdrawn funds from the Terra network for their own personal use.

Back in July last year, when the claimants launched the lawsuit, Bragar Eagel & Squire wrote that Terraform had “deceived retail investors and thereby caused them to purchase Terra tokens at artificially inflated prices.”

The firm further claimed that Terraform executives had “endorsed false statements they knew or recklessly should have known were materially misleading.” The claimants also accused Terraform executives of “violating the provisions” of United States securities laws.