Terra, Celsius hit with class action lawsuits in the US Terra, Celsius hit with class action lawsuits in the US
Terra, Celsius are facing series of class action lawsuit filed against them by disgruntled investors who lost funds to their collapse.
2 min read
Updated: Jul. 25, 2022 at 2:08 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
A new class action lawsuit against TerraForm Labs and its CEO, Do Kwon, was filed by Bragar Eagel & Squire, P.C. on July 24 in the state of California.
Bragar Eagel & Squire, P.C. also slapped a class action lawsuit against Celsius Network, Alexander Mashinksy, and other firms and individuals connected o the crypto lender on July 24 in the state of New Jersey.
The lawsuit was filed on behalf of investors who purchased Terra tokens like UST, LUNA, MIR, and others between May 20, 2021, and May 25, 2022.
Terraform accused of misleading investors
According to the filed complaint, Terraform Labs and other defendants violated the Exchange Act by deliberately misleading investors to purchase the Terra tokens at “artificially inflated prices” and using false statements to lure in unsuspecting investors.
The lawsuit also claimed Terraform Labs violated the Securities Act by failing to register the Terra tokens as a security. It added that all the defendants violated the RICO Act by conducting the enterprise’s affairs through a racketeering pattern.
Other defendants in the case include bankrupt crypto hedge fund Three Arrows Capital, venture capital firm Jump Crypto, Nicholas Platias, and other connected businesses to Terra.
Terra facing two lawsuits
Meanwhile, a similar lawsuit was filed by Nick Patterson against Terra on July 17.
Patterson alleged that Terra tokens were securities and that Terraform Labs failed to maintain Terra’s ecosystem, which led to losses for retail investors.
Patterson wants the court to declare Terra tokens as securities while adding that investors should be entitled to “punitive, consequential damages and restitution” relief from the defendants.
The two lawsuits against Terra were filed in the Northern District of California.
Celsius lawsuit
Bragar Eagel filed the lawsuit on behalf of investors who purchased Celsius securities between February 9, 2018, and July 13, 2022.
Like Terra’s case, the lawsuit alleged that Celsius and other defendants violated the Exchange Act by tricking investors into purchasing Celsius Financial Products at inflated prices using false statements.
Per the press statement, Celsius violated the Securities Act by selling unregistered “non-exempt securities.”
Celsius Network filed for a Chapter 11 bankruptcy claim on July 14. The lawsuit was filed in the District Court of New Jersey.
Mentioned in this article
Terra Classic 
TerraClassicUSD 
Mirror Protocol 
Celsius 
Terraform Labs 
Celsius Network 
Three Arrows Capital 
Do Kwon 
Alex Mashinsky Author 
Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems.
TerraClassicUSD
$0.02113
TerraUSD (UST) is a decentralized and algorithmic stablecoin on the Terra blockchain.
Mirror Protocol
$0.02790
MIR is the governance token of Mirror Protocol, a synthetic assets protocol built by Terraform Labs (TFL) on the Terra blockchain.
Celsius
$0.20702
Celsius Network is a P2P decentralized lending & borrowing platform.
Terraform Labs
Terraform Labs is a startup that created Terra, a blockchain protocol and payment platform used for algorithmic stablecoins.
Celsius Network
Celsius Network is a bankrupt cryptocurrency lending company that was founded in 2017 and headquartered in Hoboken, New Jersey.
Three Arrows Capital
Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, collapsed due to poor risk management, recklessness in dealing with business partners and a significant portion of greed.
Do Kwon began his professional journey as an engineer, contributing to tech giants Apple and Microsoft.
Alex Mashinsky, born in 1965 in the Soviet Union to a Jewish family, moved to Israel in the 1970s.