Shalini Nagarajan

A cryptocurrency investor has voluntarily chosen to withdraw a proposed class-action suit against Terraform Labs (TFL), after alleging that the firm’s stablecoin UST amounted to a Ponzi scheme that caused losses to him and others.



A <a href="https://assets2.pacermonitor.com/filings/Albright_v_Terraform_Labs_Pte_Ltd_et_al/Albright_v_Terraform_Labs_Pte_Ltd_et_al__nysdce-22-07281__0079.0.pdf?X-Amz-Security-Token=IQoJb3JpZ2luX2VjEDgaCXVzLWVhc3QtMSJHMEUCIQDeclhh%2BVvHsLxvTzwlOlEkHJWxrSM5TdluZvn%2FO8ZdNAIgNbe5nHtp1e5eywNkCc3K9aFCzHw3KNToxXPPOJfzLQkq1gQIkP%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FARADGgw5MjQ2NTE0MDgzOTgiDCZzHDLwZag1kqtWKyqqBFNtos0xjY%2FRQplvgVXJYsUyiaHMkQ9hRUgnub4pmdE2U5%2BEe39VhCQbahCuhv92Ika%2F4SjPNhXnNj8I4fqAb3%2BoO9nJ149FCVzLQmyo54gGyNp3G8Wn49a%2Fq%2Bpivfc6h8eQV6y5aU%2B14XfcOh%2BHlo5jXILV9GlpNRBAHzOzhiH80gij%2FrTPSlaymKrEp8mnK5sYInnzAR7q%2BgEWqBMVx%2BPGjOFRltt2wAk%2By7CX7oMjIEmAK1DuApmWD0QByO0%2BbUvMXa1YmO8oi0qQ%2BG%2F2ZeNFrLXm4ZfzlONErRNz9PEzOQ8aKHk%2B7poky81RBknvCWmGpVH1PCEx5ZhQaLeEOfD4AhuCk2swL8R8VZlyGB7nsoJ8bM%2FCi%2FOPDq8AeLfJTpIf8sYTDDrqxJDBqqu3vt0O9WWko9xHL3N2UVhvfkT0sJm7SZOXm2j%2BJcBgchGnAYd7I7S6KgQKH8MF5j4WJVVUOPh9e8lQF6vRDbLxKBehcFaMhSPQaZ0taOHEPHJ%2FhJg8310XGEllFMza9E4l%2BEI4byosPwWb7QJNdCQw0OH4%2FjCWCz8XaNxMJAuhs6cik1CLSx9huhmuoG111Op8XDIkujV5mmL7HlvvrZmdCJ2n7E5qURgOSAUWuXQuAj1fsxi3PFWtWTFobRQ9nsedCUDoQau7ev5SmmifibQDsmUAUfYoh%2Fm4aHgSMIx1wS8JvkUzNHwgeaSkVsXRHhyCIlNsQZH26AOY%2FI6nMLGE9p0GOqkBamw6geaCNDRVQYD6epK40RxvLEk6XRIZFeOSJz%2FlWJXXupfC9M2ct6KIlnUykRq8u2qdwJmWLhUMhPfdd1gm%2FsSCsR4gxdt6pZmsmnTqZ1FDEc19F%2BkBvNAf1GeTfTH0tLtw9vz%2FB%2BDl3gZBrCK2TqvXzfiPfJYyuFdRvg4%2F%2F3LEmAY%2FylmmNxx6kGHS%2FG8MZrgrsYj8fE1Qe5p1Ff54T3O2ka7K6EFG%2FA%3D%3D&amp;X-Amz-Algorithm=AWS4-HMAC-SHA256&amp;X-Amz-Date=20230110T155849Z&amp;X-Amz-SignedHeaders=host&amp;X-Amz-Expires=600&amp;X-Amz-Credential=ASIA5OSMEZQHAYEYTMHT%2F20230110%2Fus-east-1%2Fs3%2Faws4_request&amp;X-Amz-Signature=9d2d47dc2fcc95aaa00710f53625c6694175573abfed70c117237ec04310f93b" target="_blank" rel="noreferrer noopener">court document</a> filed Jan. 9 showed Matthew Albright dismissed his <a href="https://www.docdroid.net/NWxHwHJ/albright-v-terraform-labs-pte-ltd-et-al-nysdce-22-07281-00010-2-pdf#page=5" target="_blank" rel="noreferrer noopener">complaint</a> without prejudice, implying that he still has the option to refile at another point if he wishes.



It isn’t clear yet whether Albright has joined other <a href="https://blockworks.co/news/5-legal-threats-do-kwon-faces-since-terras-collapse" target="_blank" rel="noreferrer noopener">ongoing legal battles</a> against Do Kwon and Terraform.&nbsp;



US law firm Scott+Scott currently has a class-action lawsuit against Terraform and other affiliates, similarly claiming that investors were deceived into purchasing Terra tokens at artificially inflated prices. 



A Terraform Labs spokesperson told Blockworks that Albright chose to shelve the case “after it was demonstrated that he had sustained no injury.”&nbsp;



&#8220;South Korean prosecutors had nine of their nine detention warrants rejected by the courts, <a href="https://medium.com/terra-money/lfg-technical-audit-report-ddaf3f51e7d" target="_blank" rel="noreferrer noopener">the LFG report</a> was released and demonstrated the above-and-beyond efforts by LFG and TFL to defend the UST peg, an explanation emerged for the attack itself, and now this case has been voluntarily dismissed,&#8221; the spokesperson added.



The collapse of UST and sister token Luna last year took down nearly $40 billion in representative value, with investors losing almost <a href="https://www.bqprime.com/bloomberg/terra-s-45-billion-face-plant-creates-a-crowd-of-crypto-losers" target="_blank" rel="noreferrer noopener">$45 billion</a> within a span of few days. In one shocking incident, a man in Taiwan reportedly <a href="https://www.taiwannews.com.tw/en/news/4551502" target="_blank" rel="noreferrer noopener">committed suicide</a> after losing $2 million from his investment in Luna tokens.



Terraform Labs co-founder Do Kwon, Jump Trading, Delphi Digital and Luna Foundation Guard were among the other defendants named in Albright&#8217;s complaint.



About a month ago, Jump Trading asked a federal judge to dismiss the lawsuit, arguing that the investor hadn’t proven how Jump or its president were part of Terraform’s “racketeering,” according to <a href="https://www.law360.com/articles/1555481/jump-trading-wants-out-of-terraform-stablecoin-rico-suit" target="_blank" rel="noreferrer noopener">Law360</a>.



Three Arrows Capital co-founder Su Zhu <a href="https://twitter.com/zhusu/status/1612693303731838978" target="_blank" rel="noreferrer noopener">tweeted</a> about Albright’s dismissal on Tuesday, calling it “sudden.” Zhu, whose crypto hedge fund crumbled after TerraUST’s collapse, recently defended the failed stablecoin as he blamed Digital Currency Group and Sam Bankman-Fried’s FTX for playing a role in LUNA’s collapse.&nbsp;



In a Jan. 3 Twitter thread, he said DCG “conspired with FTX to attack Luna” and “made a fair bit doing so.”&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Here&#39;s rough summary of dcg situation 1) they conspired w FTX to attack Luna and steth and made a fair bit doing so 2) they took substantial losses in the summer from our bankruptcy as well as Babel, and other firms involved in gbtc 3) they could&#39;ve calmly restructured then&mdash; Zhu Su 🔺 (@zhusu) <a href="https://twitter.com/zhusu/status/1610093549651136512?ref_src=twsrc%5Etfw">January 3, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



To be clear, Zhu hasn’t addressed why FTX would be willing to engage in a conspiracy that would land its own trading firm Alameda Research in trouble.



He’s also been called out by the crypto community for blaming everyone, aside from himself and co-founder Kyle Davies. Both are reportedly <a href="https://blockworks.co/news/3ac-co-founders-headed-to-dubai-want-orderly-liquidation-report" target="_blank" rel="noreferrer noopener">living in Dubai</a>, in the United Arab Emirates. Aside from <a href="https://blockworks.co/news/dubai-free-zone-now-home-to-more-than-500-crypto-startups" target="_blank" rel="noreferrer noopener">being a crypto hub</a>, the UAE is among the <a href="https://worldpopulationreview.com/country-rankings/standard-of-living-by-country" target="_blank" rel="noreferrer noopener">top 2 countries</a> for quality of life among the 80 or so in the world <a href="https://en.wikipedia.org/wiki/Extradition_law_in_the_United_States" target="_blank" rel="noreferrer noopener">that lacks an extradition treaty</a> with the US (the other is Oman).



Anthony Sassano, host of The Daily Gwei podcast, said mockingly in a <a href="https://twitter.com/sassal0x/status/1610111370116333569" target="_blank" rel="noreferrer noopener">tweet</a>: “Everyone was behind the collapse of [3AC] except for Su Zhu and Kyle Davies — they are totally innocent parties who were simply forced to be on the losing side of highly profitable trading strategies.”



Correction, Jan. 11, 2023 at 2 p.m. ET — An earlier version of this article stated that the law firm Bragger Eagle &amp; Squire is currently involved in a class action lawsuit. They initially prepared such a suit, but withdrew after not being selected to represent a lead plaintiff.



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