The lawsuit alleges Kwon made fraudulent claims “either knowing that they were false, or not caring whether they were true or false.”
Along with the Luna Foundation Guard (LFG) and Terra founding member Nicholas Platias, Do Kwon, the co-founder of Terraform Labs who may be subject to legal action in South Korea and the United States, is the subject of a lawsuit in Singapore. On September 23, 359 people filed a case in Singapore’s high court alleging that Kwon, Platias, the LFG, and Terra made false statements, claiming that Terra’s stablecoin, TerraUSD (UST) — renamed TerraUSD Classic (USTC) — was not “stable by design” and could not keep 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 injury.” Additionally, they want for an order to pay “aggravated damages. “The four persons connected to Terra “knew or ought to have known that the Claimants sought to buy and hold digital stablecoins that were not susceptible to the volatility of the wider market and produce a respectable passive return,” the people bringing the case claim.
Based in part on his involvement in the demise of Basis cash, the court document specifically claims that Kwon was aware of “the structural fragility of algorithmic stablecoins.”
“The Defendants made the said representations fraudulently either well knowing that they were false and untrue, or recklessly not caring whether they were true or false,” says the lawsuit.
Since the Terra blockchain ecosystem collapsed in May, Kwon has been the victim of many legal actions and threats. In September, South Korean authorities issued a rescinded arrest warrant for the Terra co-founder. Interpol then added Kwon to its Red Notice list, requesting that law enforcement locate and possibly detain him.Despite not disclosing his location, Kwon has been active on social media throughout the scandal and declared in September that he was making zero attempt to conceal.
In reaction to the lawsuit, one Redditor complained that Kwon was “doing a bad job at acting innocent for a guy who is innocent.” Others made outrageously speculative claims that he had plastic surgery to make himself look different. Kwon’s address was listed in Singapore in the lawsuit filed on September 23, however some reports claim that he may have left the country. The co-founder of Terra was given an order by South Korea’s foreign ministry (Kwon is a Korean national) on October 6 to turn up his passport or risk having it revoked.
