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The legal challenges of bankrupt Terraform Labs are about to get complicated. This is because former crypto hedge fund giant Three Arrows Capital (3AC) has made a claim of $1.3 billion on the firm. 3AC has labeled the firm as being behind its implosion in 2022.
The Growing Terraform Labs Challenges
The claims from the Su Zhu founded hedge fund hinges on the losses it suffered as a result of the collapse of TerraUSD and LUNA. The implosion of these tokens at the time impacted 3AC severely owing to its exposure to both assets. According to liquidators for the hedge fund, the Do Kwon-led firm at the time inflated the valuation of these assets in a manipulative way.
It is not uncommon for bankrupt firms to explore ways to recall funds. Recently, Celsius Network sued Tether over Bitcoin transaction fraud. Tether has refuted the $2.4 billion Bitcoin fraud claims levied against it.
This story is developing, please check back for updates!!!
Conclusion: The bankruptcy of Terraform Labs has led to several legal challenges, including a $1.3 billion claim from Three Arrows Capital. The firm’s collapse in 2022 was attributed to the implosion of TerraUSD and LUNA, leading to significant losses for 3AC. The situation highlights the importance of transparent and responsible business practices in the crypto industry.
FAQs
1. What is the amount claimed by 3AC against Terraform Labs?
a. $1.3 billion
2. Why did 3AC suffer losses from the collapse of TerraUSD and LUNA?
a. Due to its exposure to both assets.
3. What is the allegation made against Terraform Labs by 3AC?
a. That the firm inflated the valuation of assets in a manipulative way.
4. Which firm has sued Tether over Bitcoin transaction fraud?
a. Celsius Network
