- Do Kwon, the co-founder of Terra is facing another lawsuit in Singapore.
- This is one of the several law proceedings against Do Kwon this year.
- South Korean officials earlier issued a rescinded arrest order for the Terra co-founder.
According to a Wall Street Journal report, Do Kwon is facing a class action lawsuit on behalf of investors who lost $57 million as a result of TerraUSD stablecoin’s demise. These investors are now demanding aggravated damages in addition to their lost money.
According to the class action lawsuit, Kwon and others falsely projected the stability of TerraUSD’s pricing. According to the lawsuit’s wording, investors “believe that TerraUSD would be a token that was stable by design and whose price would always be tied to the US Dollar.”
Investors also thought that the stablecoin would provide “excellent APY returns” when staked in Terraform Labs’ lending and borrowing platform, Anchor Protocol.
The TerraUSD stablecoin’s pricing mechanism, however, broke down in May. This led the asset to lose its peg to the US dollar and almost all of its market value.
According to the complaint, despite assertions to the contrary, TerraUSD was not “stable by design.” It was also unable to keep its price peg as well as to make up for losses.
It further claims that once the project’s swap mechanism was stopped in May, token holders were unable to exchange TerraUSD for an equivalent number of Luna.
Since the Terra blockchain ecosystem collapsed in May, Kwon has been the victim of many legal proceedings and threats. In September, South Korean officials issued a rescinded arrest order for the Terra co-founder. Interpol then added Kwon to its Red Notice list, urging that law enforcement identify and perhaps jail him.
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