Terraform Labs is far from recovering from the occurrences of the past week. Terraform Labs is the blockchain developer behind Terra LUNA and UST, and the collapse of the two tokens has contributed to troubles within the network’s community.

Terraform Labs team resigns

The LinkedIn profiles of two former members of the Terraform Labs legal team show that they have resigned from the project. The general counsel Marc Goldich, chief corporate counsel Lawrence Florio and the chief litigation and regulatory counsel Noah Axler resigned from Terraform Labs in May 2022.

The legal counsel team has been working on the project for less than a year. Goldich joined the company in August 2021, while Florio was the latest addition to the team in January.

The resignation of the three Terraform Labs legal team members comes from the collapse of LUNA and UST. The price of LUNA collapsed last week to lows of $0.000 within two weeks. This increased market volatility and most cryptocurrencies lost the gains made in 2021.

The UST stablecoin has dropped by over 88% since May 8. The token collapse triggered stress for the largest stablecoin, Tether (USDT), which depegged slightly from the US dollar top $0.98 before recovering swiftly.

This is not the first time that key players within a project are quitting a project because it is crashing. In December last year, the chief technical officer at SushiSwap, Joseph Delong, announced that he was leaving the decentralized exchange (DEX) because of “chaos” within the network.

Do Kwon’s legal troubles

Do Kwon is the co-founder of Terraform Labs, and he has proposed a rescue plan for the network. Following increased volatility and a significant increase in transactions within the network, the Terra network has been halted twice.

Kwon has proposed minting additional UST tokens and forking the Terra Luna blockchain to save the ecosystem. However, these proposals have not done anything to save the project, and most validators have opposed a fork.

Some cryptocurrency users who have lost money following the project’s collapse have filed a lawsuit against Do Kwon. Some users have also speculated that the resignation of the Terraform labs legal team has been caused by a conflict between the morality of the happenings within the ecosystem and a concern about whether they will be reimbursed for their services on the project.