Do Kwon, Luna Foundation Guard Face Lawsuit in Singapore Over TerraUSD Collapse

Do Kwon and Terraform Labs Targeted in Singapore Lawsuit

A lawsuit filed in Singapore’s high court on September 23 has named Do Kwon, co-founder of Terraform Labs, along with the Luna Foundation Guard (LFG) and Terra founding member Nicholas Platias, as defendants. The legal action, brought by 359 individuals, alleges fraudulent claims related to Terra’s stablecoin, TerraUSD (UST), now known as TerraUSD Classic (USTC).

Allegations Against Terra and Its Founders

The plaintiffs claim that Kwon, Platias, LFG, and Terra misrepresented TerraUSD as “stable by design,” falsely implying it could maintain its U.S. dollar peg. These allegations highlight the collapse of UST, which lost its peg and triggered significant financial losses for investors.

Implications for Terraform Labs and Its Leaders

This lawsuit adds to the growing legal challenges facing Do Kwon and Terraform Labs, with ongoing investigations in South Korea and the United States. The case underscores the risks and uncertainties surrounding stablecoins and the potential consequences for developers and promoters of such assets.

The legal battle in Singapore could set a precedent for similar cases globally, as regulators and investors increasingly scrutinize the cryptocurrency industry.