Three Arrows Sues TerraForm Labs for $1.3 Billion Over LUNA’s Market Manipulation

Three Arrows Capital’s liquidators have taken legal action against TerraForm Labs, seeking $1.3 billion in damages over alleged market manipulation of the LUNA cryptocurrency token. The lawsuit claims that TerraForm’s manipulation led to the crash of LUNA and TerraUSD in 2022, which ultimately resulted in the collapse of Three Arrows Capital. The liquidators argue that the crash severely impacted the value of Three Arrows’ other digital holdings, leading to substantial losses for the fund. However, the outcome of the lawsuit remains uncertain, as it is unclear how much recovery can be expected from TerraForm Labs. Additionally, the legal situation surrounding TerraForm Labs co-founder Do Kwon, who has faced arrests and charges in multiple countries, adds further complexity to the case. A recent postponement of Kwon’s extradition to South Korea has extended the legal saga surrounding him and the company.