Three Arrows Capital [3AC] liquidators have sued Terraform Labs for the losses the fund endured on the heels of the 2022 crash. They are seeking at least $1.3 billion from Do Kwon’s defunct digital asset business.
The liquidators have reportedly contended,
TerraForm induced 3AC to purchase Luna and TerraUSD by manipulating the market for these tokens “in a manner that artificially inflated the price for the assets” before they were wiped-out.
3AC, the failed crypto hedge fund, bought $190 million worth of LUNA in January 2022. This purchase was part of a larger $1 billion deal that included other investment firms.
TerraUSD lost its peg a few months down the line and a subsequent selloff triggered a devaluation of all assets, including LUNA, associated with the Terraform ecosystem.
The court documents further underlined that 3AC held around $462 million worth of LUNA at the end of April 2022. However, its value shrunk to $2,700 by mid-May.
In retrospect, the net value of the fund’s other digital holdings ended up getting dented by approximately $858 million in the same period.
Terraform, on its part, filed for Chapter 11 bankruptcy earlier this year. After being found liable for fraud, the firm initiated its liquidation process.
Meanwhile, both the US and South Korea have been wanting to try Kwon for criminal charges associated with the $40 billion collapse of the Terra ecosystem.
Earlier this month, the Balkan nation’s court of appeals ruled that Kwon would be extradited to his native South Korea, instead of the US.
As reported by blocmates, Montenegro’s Supreme Court ended up applying brakes on the extradition at the request of Minister of Justice Andrej Milović. The final call will not be made until a decision revolving around another parallel matter, i.e. protection of legality, is made.
