Terraform Labs, Do Kwon Fail To Have Singapore Class-Action Suit Rejected

In a significant setback for crypto firm Terraform Labs and its founder Do Kwon, the Singapore High Court has dismissed their motion to dismiss a class-action lawsuit against them. The lawsuit, filed in July 2022, alleges that Terraform Labs and Kwon engaged in fraudulent misrepresentation and deceptive conduct that caused investors to lose billions of dollars when the company’s algorithmic stablecoin, TerraUSD (UST), lost its peg to the US dollar in May 2022.

The Allegations

The plaintiffs in the lawsuit allege that Terraform Labs and Kwon made a number of false and misleading statements about UST, including:

• That UST was a stablecoin that was always worth $1.
• That UST was backed by a reserve of billions of dollars in assets.
• That UST was a safe and secure investment.

The plaintiffs also allege that Terraform Labs and Kwon engaged in a marketing campaign that intentionally misled investors about the risks of investing in UST.

The Court’s Ruling

The Singapore High Court ruled that the plaintiffs have a “good arguable case” that Terraform Labs and Kwon engaged in fraudulent misrepresentation and deceptive conduct. The court also ruled that the plaintiffs have standing to sue, meaning that they have suffered a legally cognizable injury as a result of the defendants’ actions.

The Implications of the Ruling

The court’s ruling is a major victory for the plaintiffs in the lawsuit. It means that the lawsuit will now proceed to discovery, where the plaintiffs will have the opportunity to gather evidence to support their claims. If the plaintiffs are successful in proving their claims, they could be awarded billions of dollars in damages.

The ruling is also a significant blow to Terraform Labs and Kwon. It is likely to damage their reputations and make it more difficult for them to raise capital in the future.

Conclusion

The dismissal of Terraform Labs and Kwon’s motion to dismiss is a major development in the ongoing legal battle over the collapse of UST. The ruling could have a significant impact on the future of Terraform Labs and Kwon, as well as the cryptocurrency industry as a whole.

Additional Points

• The lawsuit is being brought on behalf of investors who purchased UST between January 2022 and May 2022.
• Terraform Labs and Kwon have denied the allegations in the lawsuit.
• The lawsuit is still in its early stages, and it is too early to say how it will be resolved.
• The case is being closely watched by investors and regulators in the cryptocurrency industry.

The lawsuit is still in its early stages, and it is too early to say how it will be resolved. However, the court’s ruling is a significant victory for the plaintiffs, and it could have a major impact on the future of Terraform Labs and Kwon. The case is being closely watched by investors and regulators in the cryptocurrency industry, and it is likely to have a significant impact on the way that stablecoins are regulated in the future.