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Terra’s Legal Team Resigns After UST Stablecoin Collapse

The internal legal team at Terraform Labs abruptly resigned shortly after Terra’s algorithmic stablecoin collapsed, causing a massive price drop in the crypto market.

A source familiar with the matter told The Block that Terraform Labs’ legal activities are currently being handled by outside attorneys.

On LinkedIn, profiles of chief attorney Marc Goldich, corporate attorney Lawrence Florio and legal counsel Noah Axler all show that all three have left their positions at Terraform Labs since May 2022. These three senior personnel all left less than 1 year from the time of appointment.

A company spokesperson said: “This past week has been a difficult time for Terraform Labs and a small number of people in the company have decided to resign. However, the majority of employees still firmly believe in the mission of the project. Terra has more than just the stablecoin UST but a community of incredible passion and a clear vision of rebuilding. Our current goal will be to restore the Terra ecosystem.”

The above disclosures show that the company’s internals are very chaotic, and the legal department, who clearly see the legal risks that Terraform Labs may face when being interfered by law, are the ones who “quit ship” first.

Terraform Labs, founded by Do Kwon and Daniel Shin in 2018, is the team behind the Terra blockchain. UST, the third largest stablecoin released, lost peg against the dollar early last week. Billions of dollars in Bitcoins have been sold and the natural supply of Terra tokens released in a “crazy” attempt to restore the peg, but to no avail.

The prices of both LUNA and UST fell deeply. Terra has halted its blockchain twice, and investors have both suffered heavy losses.

Amid the turmoil, just yesterday, Kwon pushed his plan to fork Terra to create a new blockchain, but the community doesn’t seem to agree with the idea.