Another lawsuit filed in Singapore on behalf of more than 350 investors who lost close to $57 million in the collapse of the TerraUSD coin poses a threat to its fugitive co-founder Do Kwon.
The lawsuit also names Terra founder Nicholas Platias and members of the Luna Foundation Guard (LFG) in addition to Do Kwon.
Although the case was filed on September 23, it has received little attention to date. It claims that Mr. Kwon committed “fraudulent misrepresentations” regarding TerraUSD’s stability, a so-called algorithmic stablecoin that employed financial engineering to keep a one-to-one relationship with the US dollar.
359 people accuse Kwon, Platias, the LFG, and Terra of making false statements in a lawsuit they filed in Singapore’s high court. The lead claimants in the suit are a Spanish citizen, Julian Moreno Beltran, and a Singaporean, Douglas Gan Yi Dong.
They claim, among other things, that Terra’s stablecoin TerraUSD (UST), now TerraUSD Classic (USTC), was not “stable by design” and was unable to maintain its peg to the US dollar.
Based on the value of the UST tokens they bought, held, or sold during the market slump in May, the claimants are asking for compensation for a total of about $57 million in “loss and damage.” Additionally, they want an order to pay “aggravated damages.” They are represented by Drew & Napier, one of Singapore’s top law firms.
Since the Terra blockchain ecosystem collapsed in May, Kwon has been the victim of many legal actions and threats. In September, South Korean officials issued a rescinded arrest order for the Terra co-founder. Interpol then added Kwon to its Red Notice list, urging that law enforcement locate and perhaps jail him.
In a statement, a spokesperson for Mr. Kwon’s Terraform Labs, one of the defendants in the lawsuit, stated that the company did nothing unlawful and would vigorously defend itself.
“There is a fundamental difference between a public market event and fraud,” the spokesperson said. “The risks were publicly known and discussed, and the underlying code was open-sourced.”
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