LUNA News: 3AC Seeks $1.3 Billion in Legal Claims Against Bankrupt Terraform Labs

• 3AC claims $1.3B losses from LUNA’s collapse, blaming Terraform Labs’ manipulative practices.
• LUNA value plummeted, decimating 3AC’s $462M investment to just $2.7K in weeks.

As discussed in a previous CNF post, the Terra Luna Classic community is debating raising the burn tax rate from 0.5% to 1.5%. If increased, the burn tax would triple contributions to the community and oracle pools.

Meanwhile, Three Arrows Capital (3AC) is asserting a $1.3 billion claim against Terraform Labs, accusing the firm of being responsible for its collapse in 2022. The hedge fund’s claim centers on significant losses incurred due to the failure of TerraUSD and LUNA.

Impact of TerraUSD and LUNA Collapse

According to a source, 3AC alleges it purchased up to $190 million worth of LUNA at the beginning of 2022 as part of a larger $1 billion deal with other investment firms. A subsequent massive selloff of TerraUSD led to a sharp decline in LUNA’s value, severely impacting 3AC.

Broader Bankruptcy and Legal Context

Reflecting our previous discussion on Terra Luna’s bankruptcy progress: Shuttle Bridge Active Again, LUNA Tokens to Be Burned. From holding $462 million worth of LUNA in April 2022, the firm’s holdings fell to just over $2,700 by mid-May.

Also, the hedge fund’s court filing accuses Terraform Labs, led by Do Kwon, of inflating asset valuations in a manipulative manner, resulting in substantial financial losses.

At the time of writing, Terra (LUNA) is at $0.3307, with an increase of 0.25% in the past day and 5.18% in the past week. See the LUNA price chart below.