Albright Capital has dropped its lawsuit against Terraform Labs and its founder Do Kwon, in response to a Notice of Voluntary Dismissal filed in U.S. District Court on January 9. Before its dismissal, the lawsuit had alleged that the corporate had violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by working the stablecoin, UST, as a “Ponzi scheme.”
Three Arrows Capital (3AC) co-founder Su Zhu posted the dismissal to Twitter, saying:
Curious how lengthy it is going to take cryptonative media to report on this sudden voluntary dismissal of sophistication motion against Luna basis and Luna traders pic.twitter.com/8SyMhB4u4g
— Zhu Su (@zhusu) January 10, 2023
Zhu had beforehand claimed that the chapter of 3AC was partially brought on by UST’s collapse. The lawsuit was dismissed “without prejudice,” that means that the plaintiff has the choice to refile it sooner or later if desired.
Related: Terra by accident airdropped tokens to the incorrect individual
US Dollar Terra (UST) was an algorithmic stablecoin created by Terraform labs. It ran on the Terra community, whose native coin was LUNA. UST was backed by an equal greenback quantity of LUNA as collateral, and every UST coin was speculated to be pegged to $1 on the secondary market. However, LUNA collapsed in worth in May, inflicting UST to grow to be undercollateralized. UST misplaced its peg in consequence and is now value solely $0.02 per coin.
South Korean authorities issued an arrest warrant for Kwon in September, and the corporate has confronted a number of lawsuits alleging that UST was a fraud. This explicit lawsuit alleged that UST “amounted to a Ponzi scheme that was only sustained by the demand for UST created by Anchor’s excessive yields.” However, the lawsuit has now been dismissed by the plaintiff.