Terraform Labs lawyers resign after UST collapse

Three members of Terraform Labs’ legal department resigned after the collapse of the algorithmic stablecoin TerraUSD (UST) and the LUNA token. The Block reports, citing a source.

According to a source, an outside specialist is now handling legal matters.

The outlet notes that their posts were left by Terraform Labs’ chief legal officer Marc Goldich, chief corporate counsel Lawrence Florio and chief litigation and regulatory counsel Noah Axler. According to LinkedIn profiles, they left the project in May after working for less than a year.

“The past week has been challenging for Terraform Labs, and in recent days a small number of team members have resigned. The vast majority of staff remain firmly committed to the project’s mission,” the company spokesperson told the publication.

Goldich, Florio and Axler did not comment on the reports of their departure from Terraform Labs.

One Twitter user speculated that the lawyers’ departures were related to concerns about salary payments.

lawyers don’t give af about that, they just know that Terra doesn’t have the money to pay them now lol

— Shmebulock (@CryptoShmebulok) May 17, 2022

Another community member alleged that the team had “seen something they couldn’t handle.”

The legal team of Terraform labs might have seen something they can’t handle so they resigned. Terraform lawyers Marc Goldich, Lawrence Florio,and Noah Axler has already updated their resignation on LinkedIn. Do Kwon made people lose a lot of money and not everyone will let it go

— Tajo Crypto (@TajoCrypto) May 17, 2022

Prices of UST and LUNA began to fall on May 10, 2022, amid outflows from the Anchor protocol as the yield on deposits was reduced to 17.87%. As a result, on May 8, the “stablecoin” briefly lost its peg to the dollar.

The decline continued on May 11, after which LUNA — used to mint the algorithmic stablecoin — plummeted to $0.3. At the time of writing the token trades at around $0.00018, UST at around $0.09 (CoinGecko).

Earlier, Terraform Labs CEO Do Kwon proposed conducting a network hard fork. The vote is scheduled for May 18.

Preliminary poll results showed that the majority of community participants did not support his idea. The success of the hard fork was also doubted by Binance chief Changpeng Zhao.

The initiative did not affect asset prices either. LUNA and UST fell to new lows after the Luna Foundation Guard’s report on reserves. The organization said that in an unsuccessful bid to rescue the assets spent virtually the entire fund worth more than $3 billion.

Earlier in May, media reports noted a call by a representative of South Korea’s People Power Party, Yoon Chan-Hyeon, to hold parliamentary hearings with Do Kwon regarding the Terra ecosystem collapse.

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