A fresh lawsuit has been initiated in Singapore against embattled Terra Form labs CEO Do Kwon, the Luna Foundation Guard (LFG) and Terra founding partner Nicholas Platias by victims of the UST-induced market meltdown that saw over $40 billion worth of crypto assets evaporate in May.
According to documents filed in Singapore’s high court on September 23, 359 individuals claimed that Kwon and his co-defendants made fraudulent claims about the stability of Terra’s algorithmic stablecoin TerraUSD (UST). The claimants alleged explicitly that Do Kwon had been aware of “the structural weakness of algorithmic stablecoins” based on his involvement with Basis Cash (BAC), another stablecoin that botched under his stewardship in early 2021 before UST’s creation.
“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,” the lawsuit read.
The claimants further argued that the defendants “knew or ought to have known that the claimants wished to buy and hold cryptocurrency stablecoins that were not subject to the volatility of the wider market and earn a decent passive return.” As a result of the trio’s actions, the claimants suffered substantial losses on the UST holdings as well as other damages. In the suit, the claimants sought the court to award them roughly $57 million for the said losses and order the trio to pay for “aggravated damages.”
The lawsuit comes against the backdrop of a mounting search for Kwon, who has now become an international fugitive following the issuance of an arrest warrant by South Korea and a red notice against him by Interpol last month. On October 6, South Korea’s Ministry of Foreign Affairs issued a notice directing Kwon to return his passport within 14 days, failing to which it would be invalidated.
In the past four or so months, the Korean-born developer has become the target of numerous legal actions in the US and South Korea since his Terra empire came crumbling in May, leaving millions of investors with devastating losses.
Whereas it is not clear where Kwon is, Korean authorities recently alleged that he left Singapore last month for Dubai. However, no records were found showing that Kwon had entered the city, prompting Korea to request countries adjacent to Dubai to help track his whereabouts. In a recent interview, Kwon denied being on the run but declined to reveal his location.