Singapore is suing Terra co-founder Do Kwon for $57 million

By: Michael Wilson

Singapore is suing Terra co-founder Do Kwon for $57 million

October 29, 2022 5:21 AM

It is claimed in the case that Kwon and others made false statements about UST "either knowing that they were false and inaccurate, or carelessly not caring whether they were true or false."


In addition to potential legal action in South Korea and the United States, Do Kwon, co-founder of Terraform Labs, and Luna Foundation Guard (LFG) and Terra founding member Nicholas Platias are being sued in Singapore.


On September 23, 359 people sued Kwon, Platias, the LFG, and Terra in Singapore's high court. They said they made false and misleading claims about the stability of Terra's stablecoin, TerraUSD (UST), which is now called TerraUSD Classic (USTC) and is not "stable by design."


The value of the UST tokens that the claimants bought before the market crash in May and then retained or sold is estimated to be over $57 million. Aggravated damages are another form of compensation sought.


The plaintiffs claim that Terra and the other four defendants "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 provide a fair passive return." From his involvement in the failure of Basis Cash, Kwon is said to have known about "the structural fragility of algorithmic stablecoins," according to the court complaint.


The complaint states, "The Defendants made the abovementioned claims fraudulently either well knowing that they were false and untrue or recklessly not caring whether they were true or not."


Since the Terra blockchain ecosystem failed in May, Kwon has been the subject of multiple lawsuits and death threats. In September, South Korean authorities filed an arrest warrant for the Terra co-founder, which was later rescinded, and Interpol put Kwon to its Red Notice list, demanding law enforcement identify and perhaps imprison him.


Despite not disclosing his location, Kwon has been active on social media throughout the issue and claimed in September that he was "making zero attempt to conceal." In reaction to the lawsuit, one Reddit user remarked that Kwon was "doing a bad job of acting innocent for a guy who is innocent." Other people made outlandish assumptions, like that he had plastic surgery to alter his appearance.



A Singapore address was listed for Kwon in a lawsuit filed on September 23, but he has reportedly since disappeared. The foreign ministry of South Korea (Kwon is a Korean national) demanded his passport on October 6 and threatened to have it canceled if he didn't turn it in.