Terraform Labs Hit With Class Action Over TerraUS Collapse

Terraform Labs is facing a proposed class action over the collapse of its TerraUS stablecoin, which caused losses to owners and sent massive shockwaves across entire crypto industry, in federal court in Manhattan.

Terraform’s coin—TerraUS, or UST, which was then the fourth largest stablecoin in circulation—"amounted to a Ponzi scheme” that was only sustained by excessive guaranteed yields, according to the suit, filed Thursday in the US District Court for the Southern District of New York.

Stablecoins are a type of cryptocurrency pegged on a one-to-one basis to a traditional fiat currency by an algorithm. Terraform “touted the stability” of ...