Terraform Labs CEO Do Kwon faces $57M fraud lawsuit in Singapore

Do Kwon faces a lawsuit from Singapore on behalf of more than 350 investors who lost around $57 million linked to TerraUSD collapse.

The escaped Crypto developer Do Kwon, which is already under the intense radar by several countries’ investigators, faces yet another lawsuit that was brought in Singapore on behalf of more than 350 investors who lost around $57 million linked to Terraform Labs’ TerraUSD collapse. This is notably just after him being wanted by South Korean prosecutors and interpol issuing a red notice for his arrest.

Although the case was filed on September 23, it is currently getting some attention, due to its scheduled hearing on Wednesday, November 2. The filing claimed that Mr. Kwon used “fraudulent misrepresentations” regarding TerraUSD’s stability.

TerraUSD burnt investors’ savings to ashes

Julian Moreno Beltran, a Spanish citizen, and Douglas Gan Yi Dong, a Singaporean, are the main petitioners in the lawsuit. According to a list of further claimants, many of them had invested tens of thousands or perhaps hundreds of thousands of dollars in TerraUSD before the crash. According to the list, Mr. Beltran purchased stablecoins valued at almost $1.1 million.

The claimants are represented by Drew & Napier, one of the leading law firms in Singapore, and are seeking their money back in addition with “aggravated damages”.

However, a Terraform Labs spokeswoman denied the accusations and stated that the company would fight back against the charges made in the lawsuit. As reported by WSJ, the spokesperson said:

“There is a fundamental difference between a public market event and fraud. The risks were publicly known and discussed, and the underlying code was open-sourced”.

After the collapse in May, the algorithmic stablecoin TerraUSD and its associated cryptocurrency, LUNA, devalued leading to the many investors’ anguish, also resulting in bankruptcies of prominent cryptocurrency lenders Celsius and Voyager. Amid this situation, investors have shown their interest in a platform called Anchor Protocol as it claims nearly 20% yields yearly in order to save their TerraUSD. Anchor protocol is also being eyed by the lawsuit accusing its developers of calling it a “principal-protected stablecoin savings product”.

It is interesting to note that the whereabouts of Kwon, who has denied being on the run from law enforcement, are unknown.