2023-12-2 15:22 |
Terraform Labs, a Singapore-incorporated company behind the Terra blockchain, and its co-founder Do Kwon, are now grappling with the advancement of a class-action lawsuit in Singapore.
The High Court recently dismissed the defendants’ attempt to shift the case to arbitration, marking a significant development in the legal saga. The lawsuit, initiated by Julian Moreno Beltran and Douglas Gan in September 2022, alleges fraudulent misrepresentation related to the collapse of the algorithmic stablecoin terraUSD (UST) in May 2022, resulting in a combined loss of $57 million for 377 claimants.
Terraform Labs class-action lawsuit in SingaporeThe High Court’s rejection of Terraform Labs and Do Kwon’s appeal signifies a pivotal moment in the international legal landscape.
The class-action lawsuit, led by Julian Moreno Beltran and Douglas Gan on behalf of 377 claimants, accuses Terraform, Do Kwon, co-founder Nikolaos Alexandros Platias, and Luna Foundation Guard of fraudulent misrepresentation.
Allegedly, misrepresentations induced the claimants to purchase and stake terraUSD (UST) tokens, even as their value plummeted in May 2022. Despite Terraform’s attempt to have the case thrown out based on the website’s terms of use, citing an arbitration clause, the court ruled otherwise, propelling the lawsuit closer to the discovery stage.
Terraform Labs’ defenseThe legal proceedings took an intriguing turn as Terraform Labs attempted to contest the jurisdiction of the Singapore court. Terraform argued that users had waived their rights to trial and class-action participation according to the website’s terms of use. However, the court dismissed this argument, emphasizing the defendants’ failure to establish an arbitration agreement.
Additionally, the court noted Terraform’s actions, such as filing a defence and counterclaim, as an acceptance of the Singapore court’s jurisdiction. This dismissal sheds light on the legal intricacies surrounding the case, underscoring the challenges faced by Terraform Labs and its co-founders. The court’s observations highlighted a delay of over nine months in addressing the jurisdictional challenge, emphasizing the need for adherence to enhanced adjudication processes introduced in Singapore.
The case underscores the potential financial and reputational consequences for Terraform Labs and its co-founders as they navigate these complex legal proceedings.
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