25 April, 2024

Lawsuit Against Terraform Labs Prevents Repayment For Victims, Says CEO

31 Jul, 2023

04 Nov, 2023

  • Terraform Labs’ CEO has blamed a lawsuit against the company for the delay in repayment to victims.
  • The lawsuit was filed last year following the dramatic collapse of Terra and associated cryptocurrencies.
  • CEO Chris Amani accused a high-profile whistleblower of making false accusations against the defunct crypto firm.

Chris Amani, the newly appointed Chief Executive of Terraform Labs, stated recently that the delay in repayment to the victims of the Terra Luna crash was due to a lawsuit filed against his company. The lawsuit in question was filed in June last year following the dramatic collapse of Terraform Labs and associated cryptocurrencies like UST and LUNA, which wiped $40 billion from the global crypto market.

Terraform Labs CEO Chris Amani took to Twitter earlier today to address the community’s questions regarding repayments:

When Terra’s UST stablecoin lost its peg to the US Dollar in May last year, the firm used the 80,394 BTC held in the Luna Foundation Guard (LFG) to buy up massive amounts of UST in a bid to stabilize its price and restore its peg. LFG burned through nearly 80,000 BTC, purchasing UST and the LUNA token. However, all attempts to save UST were futile as the stablecoin eventually crashed.

When the dust settled, just 313 BTC remained in the LFG’s reserves, along with 39,914 BNB, 1.9 million AVAX, 1.8 billion UST, and 222 million LUNA. On May 16, 2022, LFG stated that the remaining funds would be used to compensate UST users, starting with the smallest holders. To date, UST holders and other victims haven’t received any funds from the LFG.

Following the implosion of the Terra ecosystem, a Terra community member called FatManTerra announced a class action lawsuit against Terraform Labs, its executives, including Do Kwon, and multiple associates like Three Arrows Capital (3AC) and trading firm Jump Crypto. FatManTerra eventually emerged as a high-profile whistleblower who regularly provided updates and exclusive news to Terra’s victims.

With Do Kwon in jail and a new Chief Executive in place, Terraform Labs had been in the news over the past few days. Addressing the community’s concerns regarding the promised repayment for victims from the Luna Foundation Guard, CEO Chris Amani stated earlier today that distribution of the LFG funds was not possible since the funds were frozen after Terraform Labs was sued last year.

FatManTerra responded to Amani’s claims and highlighted that the lawsuit was filed more than two months after the LFG announced repayment for UST and LUNA victims. According to the whistleblower, the CEO’s latest statements were an attempt to distort the narrative and distract the crypto community.



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