The liquidators of defunct cryptocurrency hedge fund Three Arrows Capital (3AC) have filed a $1.3 billion lawsuit against TerraForm Labs, co-founded by Do Kwon, for losses incurred after the 2022 crash of TerraUSD (UST) and Luna (LUNA). The liquidators allege that TerraForm manipulated the market to artificially inflate the price of these tokens, which induced 3AC to invest heavily and subsequently suffer massive losses. Following the collapse, 3AC's holdings in LUNA dropped from $462 million to $2,700, and its overall digital holdings fell by $858 million. TerraForm Labs filed for bankruptcy in January 2024, and Do Kwon faces extradition to South Korea after being arrested in Montenegro. The U.S. Securities and Exchange Commission (SEC) has already found TerraForm and Kwon liable for civil fraud, resulting in a $4.5 billion settlement.