Terra, Celsius are facing series of class action lawsuit filed against them by disgruntled investors who lost funds to their collapse reports Cryptoslate.
Bragar Eagel & Squire, P.C. also slapped a class action lawsuit against Celsius Network, Alexander Mashinksy, and other firms and individuals connected o the crypto lender on July 24 in the state of New Jersey.
Terraform accused of misleading investors
According to the filed complaint, Terraform Labs and other defendants violated the Exchange Act by deliberately misleading investors to purchase the Terra tokens at “artificially inflated prices” and using false statements to lure in unsuspecting investors.
The lawsuit also claimed Terraform Labs violated the Securities Act by failing to register the Terra tokens as a security. It added that all the defendants violated the RICO Act by conducting the enterprise’s affairs through a racketeering pattern.
Other defendants in the case include bankrupt crypto hedge fund Three Arrows Capital, venture capital firm Jump Crypto, Nicholas Platias, and other connected businesses to Terra.
Terra facing two lawsuits
Meanwhile, a similar lawsuit was filed by Nick Patterson against Terra on July 17.
Patterson alleged that Terra tokens were securities and that Terraform Labs failed to maintain Terra’s ecosystem, which led to losses for retail investors.
Patterson wants the court to declare Terra tokens as securities while adding that investors should be entitled to “punitive, consequential damages and restitution” relief from the defendants.
The two lawsuits against Terra were filed in the Northern District of California.
Bragar Eagel filed the lawsuit on behalf of investors who purchased Celsius securities between February 9, 2018, and July 13, 2022.
Like Terra’s case, the lawsuit alleged that Celsius and other defendants violated the Exchange Act by tricking investors into purchasing Celsius Financial Products at inflated prices using false statements.
Per the press statement, Celsius violated the Securities Act by selling unregistered “non-exempt securities.”
Celsius Network filed for a Chapter 11 bankruptcy claim on July 14. The lawsuit was filed in the District Court of New Jersey.