Albright Capital will discontinue its lawsuit proceedings against Terraform Labs and its founder Do Kwon, insights from a Notice of Voluntary Dismissal filed in US District Court on January 9, 2023, stated, as reported by Cointelegraph.
According to Cointelegraph, Su Zhu, co-founder, Three Arrows Capital (3AC), previously claimed that 3AC’s bankruptcy happened due to UST’s collapse. Reportedly, the lawsuit was discarded “without prejudice,” meaning that the plaintiff can refile it in the future if needed.
On the basis of information by Cointelegraph, Terraform labs developed the US Dollar Terra (UST), which was an algorithmic stablecoin. The stablecoin was functional on the Terra network, which had its native token as LUNA. It is believed that UST was supported by the same amount of LUNA as collateral, and each UST coin was expected to be pegged to one dollar on the secondary market. Since LUNA’s value fell in May, 2022, UST lost its peg and is currently worth $0.02 per coin.
Moreover, Cointelegraph noted that an arrest warrant was issued by South Korean units for Kwon in September, 2022, with the company facing lawsuits on account of UST being a scam. Reportedly, this particular lawsuit highlighted that UST “amounted to a Ponzi scheme that was only sustained by the demand for UST created by Anchor’s excessive yields.”
(With insights from Cointelegraph)