Terra co-founder Do Kwon faces $57m lawsuit in Singapore

The lawsuit alleges that Kwon and others made fraudulent statements about the UST "either knowing full well that they were untrue and false, or without recklessly caring whether they were true or false."

Do Kwon, the co-founder of Terraform Labs who could face legal action in South Korea and the United States, is the target of a lawsuit in Singapore with the Luna Foundation Guard (LFG) and Terra founding member Nicholas Platias.

In a lawsuit filed in the High Court of Singapore on September 23, 359 individuals allege that Kwon, Platias, the LFG and Terra made fraudulent claims, including that Terra's stablecoin, TerraUSD (UST) - now TerraUSD Classic (USTC) - was not "stable by design" and unable to maintain its peg to the US dollar.

The plaintiffs seek compensation for approximately $57 million in combined “loss and damage” based on the value of the UST tokens they bought and held or sold amid the market downturn in May. They also ask for an order to pay "aggravated damages".

According to the people filing the lawsuit, the four Terra-related parties "knew or should have known that the plaintiffs wanted to buy and hold cryptocurrency stablecoins that were not subject to market volatility within the meaning of wide and earn a decent passive back." The court document specifically alleges that Kwon was aware of "the structural weakness of algorithmic stablecoins" in part based on his role in bringing down Basis Cash.

“The defendants made the said representations fraudulently, either knowing full well that they were untrue and untrue, or without recklessly caring whether they were true or untrue,” the lawsuit states.

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