Lawsuit against Terraform Labs: plaintiffs withdraw

Lawsuit against Terraform Labs plaintiffs withdraw
Source: Yanik Chauvin/Adobe

The American investment company Albright Capital withdrew from the class action proceeding against Terraform Labsthe company behind the Terra protocol and the Terra Luna Classic (LUC) token.

According to court documentsAlbright – as well as its fellow plaintiffs, the law firms Scott & Scottand Bragar Eagel & Squire – have voluntarily recanted “without prejudice and without cost against the defendant(s)” before a branch of the court for the Southern District of New York.

Albright et al had hoped to win a legal victory over Terraform and its co-founder Do Kwon, as well as on American associated companies. The plaintiffs hoped to reunite a large number of disgruntled Terra investors, who suffered as the ecosystem collapsed in May 2022.

Lawsuit against Terraform Labs plaintiffs withdraw
Price development of Terra Luna Classic (LUC) in the last 24 hours. (Source: CoinMarketCap)

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

The move comes just days after Terraform Labs filed a motion in the same court, asking it to dismiss the lawsuit. The lawyers provided a 44-page document in support of their claims.

A Terraform spokesperson told Cryptonews.com and other media that “it has been demonstrated that [les demandeurs] suffered no prejudice” in this case.

The spokesperson added that neither the company nor its executives had “committed any wrongdoing”.

And Terraform went on to point out that:

“All nine South Korean prosecutors’ detention warrants have been rejected by the courts. The past months have confirmed that the facts are on our side, and more are and will continue to be revealed.”

Terraform ‘false advertising’ claims withdrawn after lawsuit fails

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

In July last year, when the plaintiffs launched the legal action, Bragar Eagel & Squire affirmed that Terraform Labs had “deceived retail investors into buying Terra tokens at artificially inflated prices”.

The firm also claimed that Terraform executives “recklessly endorsed false statements while knowing they were materially untrue.” The plaintiffs also accused Terraform executives of “violating the provisions” of US securities laws.

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Lawsuit against Terraform Labs: plaintiffs withdraw


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