Singapore class-action against Do Kwon seeks $57 million

Hearing in early November in a Singapore court will take place on a class-action filed against Terraform Labs and its co-founder Do Kwon, on behalf of more than 350 investors. They claim they lost $57 million as a result of the collapse of the TerraUSD (UST) stablecoin, The Wall Street Journal reports.

In the claim it states that the 1:1 pegged “stablecoin” UST was designed as a store of value and marketed as “shielded from volatility of cryptocurrency markets”.

The Terra ecosystem, which also included the LUNA token, collapsed in early May, triggering a downturn in the crypto market. The project’s collapse was one of the causes of bankruptcies of creditors Celsius and Voyager, as well as hedge fund Three Arrows Capital.

The plaintiffs allege that Kwon knew about the “structural weakness” of UST, but allowed “misleading and deceptive” information to prompt investors to buy the asset.

The complaint was filed by Spanish citizen Julian Moreno Beltran, who claims losses of about $1.1 million, and Singaporean Douglas Gan.

According to the suit, other claimants invested in the stablecoin “tens or hundreds of thousands of dollars.” All of them say they are entitled to “seek restitution for losses incurred from purchasing UST tokens,” and damages.

Among the defendants are also former Terraform Labs head of research Nicolas Platias and the Luna Foundation Guard, created to support the growth of the Terra ecosystem.

The suit was filed on September 23, with hearings set for November 2.

A representative of Terraform Labs rejected the allegations and said the firm will contest the claims.

“There is a fundamental difference between a public-market event and fraud. The risks were known and discussed, and the source code was open,” he commented.

In September, a court in South Korea issued an arrest warrant for Kwon and five other Terraform Labs employees on charges including violations of capital markets law.

Authorities have turned to Interpol with a request to locate and detain the co-founder. Media reported that Interpol had issued a “Red Notice” for Kwon, which the Interpol site does not confirm. Information on site does not confirm this.

Kwon has denied the accusations against him and that he is “on the run”. However, he declined to disclose his country of residence.

Investors who suffered from Terra’s collapse formed the UST Restitution Group to pursue him.

Read ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analysis.