In the blockchain newsletter for the month of June 2022, Pantera Capital explained what triggered the fiascos mentioned above.

For Terra ecosystem, the firm said the crypto industry’s detractors will certainly term the incident as a big deal of failure, but it cannot overshadow blockchain’s utility and promises.

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Explaining further, the firm stated that the Terra ecosystem’s collapse is similar to the dot.com era when some experiments worked, while others failed. This led to the failure of Pets.com but didn’t mean the internet has no viable utility. It only means that one business model wasn’t right for the time.

So, the newsletter says LUNA’s failure only means that one type of algorithmic stablecoin failed to work as planned, which does not imply that blockchain technology has failed.

Read Also: Three Arrows Capital (3AC) Files Chapter 15 Bankruptcy, Seeking to Defend its US Assets

Pantera Capital noted:

“There’s a ton of stress about whether Tether is fully backed by collateral.  In 2019 they admitted it wasn’t.  It serves its purpose – shadow banking system.  However, most stablecoins, like Coinbase and Circle’s USDC are fully backed with treasury bills, very transparent, and audited. 

“You have to work through some of these experiments. Ultimately, that vast majority of the stablecoin market will look just like USDC and FedCoin.”

For Celsius, the company wrote:

“Celsius is a centralized crypto lending business.  Their business model is:  you deposit USDC, ETH, some sort of cryptocurrency, and they promise a yield on it.“

“What ended up happening is they put a bunch of those assets into either very risky projects or into things that have a long liquidity horizon.  Classic leveraged lending model – borrow short-term, lend long and risky. 

“The liquidity mismatch where you have customers who expect to be able to withdraw their funds within 24 hours, but you have assets that may be locked up for months.  Celsius ended up freezing withdrawals and were forced to sell a huge amount of crypto over the last week, which is part of what caused a cascade in prices.”

Read Also: $559.6 Million Used By Three Arrows Capital (3AC) to Acquire Locked LUNA Now Worth $670

Regarding the current issue faced by Three Arrows Capital (3AC), Pantera Capital said:

“Similar situation with Three Arrows Capital, known as 3AC.  Very leveraged with liquidity mismatches. They weren’t able to meet their margin calls.  They ended up being a forced seller in a time where there wasn’t that much liquidity in the markets.

“The markets are very efficient.  With a 70-90% downdraft we probably have worked through most of the problems.  We think these events have mostly washed through the crypto space.”

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The post Pantera Capital Highlights Terra (LUNA), Celsius, and Three Arrows Capital’s Fiasco appeared first on Times Tabloid.

Major Development 

Three Arrows Capital (3AC), founded by Zhu Su and Kyle Davies, managed an estimated $10 billion of assets as of March, according to on-chain analytic firm, Nansen.

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As the crypto market moved into the bear season and has been lingering, Three Arrows Capital (3AC) has been among the most affected big players in the industry. Other crypto firms like BlockFi and Celsius Network are in similar shoes.

Due to Three Arrows’ liquidity inadequacy, which resulted in its inability to pay clients, the company was issued a liquidation order by a court in the British Virgin Islands (BVI).

While the company’s liquidation takes effect in the British Virgin Islands, the capital venture firm has initiated a move to protect its US assets from being confiscated, by filing a Chapter 15 bankruptcy petition.

To note, Chapter 15 bankruptcy filings stop creditors from seizing a company’s assets in the United States.

Per a report by Bloomberg, the law firm, Latham & Watkins representing Three Arrows Capital (3AC) filed the bankruptcy petition in New York on July 1. The petition is tagged, “Three Arrows Capital Ltd and Russell Crumpler, 22-10920, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).”

Related: Here’s How LUNA and UST Collapse Caused stETH  De-pegging; Celsius and 3AC Liquidation Problems: Nansen

Three Arrows Capital (3AC) CEO Seeks Solution

As the problem continues to heat up for the crypto hedge fund, Zhu Su, the co-founder of Three Arrows Capital (3AC) is seeking to offload one of his luxury homes in Singapore in a bid to try and salvage the situation. The said mansion was bought for $35 million, Bloomberg said. 

Meanwhile, Nansen, a blockchain analytic firm, has studied the current problem faced by Three Arrows Capital and Celsius Network using on-chain data. The firm stated that the insolvency problems of both companies trace to the de-pegging of TerraUSD (UST) and a subsequent LUNA crash.

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The post Three Arrows Capital (3AC) Files Chapter 15 Bankruptcy, Seeking to Defend its US Assets appeared first on Times Tabloid.

Other defendants are Republic Capital, Republic Maximal LLC, Tribe Capital, DeFinance Capital, DeFinance Technologies, GSR/GSR Market Limited, TerraForm Labs (TFL) Head of Research, Nicholas Platias, and other TFL Executive Officers.

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Scott+Scott Attorneys at Law LLP: TerraForm Class Action Notice

Per the notice, Scott+Scott Attorneys initiated this lawsuit on behalf of all persons and entities who bought TerraUSD (UST) and LUNA tokens within the ‘Class Period”, May 20, 2021, and May 25, 2022, and thereafter suffered huge losses.

Notably, the class of persons and entities involved here excludes the above-mentioned defendants and their affiliates. Accordingly, those that fall in this class are prompted to contact Scott+Scott attorney Sean Masson (212) 519-0522, or via email at smasson@scott-scott.com.

The firm which has litigated major securities and several cryptocurrency cases made the following known;

“If you purchased Terra Tokens, including UST, LUNA, KRT, ANC, WHALE, ASTRO, APOLLO, XDEFI, MINE, aUST, vUST, MIR, Mirrored Assets (e.g. mBTC, mETH, mVIXY, mTSLA, etc.), Liquidity Pool tokens (e.g. UST-mVIXY-LP, bLUNA-LUNA-LP, XDEFI-UST-LP, etc.) and/or Bonded Assets (e.g. bLUNA and bETH) between May 20, 2021, and May 25, 2022, inclusive, and have suffered significant losses, realized or unrealized, you are encouraged to contact Scott+Scott attorney Sean Masson (212) 519-0522, or via email at smasson@scott-scott.com, for more information.”

The lead plaintiff deadline in this action is August 19, 2022. If you wish to serve as lead plaintiff, you must move the Court no later than August 19, 2022. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice or may choose to do nothing and remain a member of the proposed class. 

Related: Terra (LUNA) Key Officials Face Travel Ban in Korea

Scott+Scott Attorneys Strong Points

Recall that TerraUSD (UST) lost parity with $1 and went as low as $0.07 on May 25. Likewise, LUNA saw a massive 99.7% plunge between May 7 and May 12. Sadly, there has been no recovery in sight since both digital assets went south. 

On this premise, Scott+Scott Attorneys contends that TerraForm Labs and other defendants violated provisions of the Exchange Act by carrying out fraudulent schemes that caused retail investors huge losses.

Secondly, the firm claims that the defendants failed to observe provisions of the Securities Act by selling non-exempt security without registration. Similarly, by participating in TerraForm Lab’s failure to register the Terra (LUNA) tokens, the firm holds that the defendants infringed provisions of the Securities Act.

According to the update, the case alleges that “the Defendants violated provisions of California Common Law by possessing the monetary value of Terra tokens at an inflated value which rightfully belongs to the Plaintiff and members of the Class.”

Read Also: Terra Whistleblower Pinpoints Major Hole in New Report That Accuses Do Kwon’s TFL of Depegging UST

In terms of the California common law, the class action alleges that the defendants aided and assisted civil conspiracy.

Ultimately, Scott+Scott Attorneys at Law LLP claims that TerraForm Labs and other defendants disregarded provisions of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) when they handled the affairs of the enterprise using a racketeering activity pattern.

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The post Scott+Scott Attorneys Files Class Action Lawsuit Against Do Kwon, Terraform Labs, Jump Crypto, Three Arrows Capital, and other Insiders appeared first on Times Tabloid.