Do Kwon Faces $57 Million Fraud Lawsuit Filed by TerraUSD Investors

The founder of Terraform Labs has been the subject of several legal proceedings recently, after Do Kwon was arrested by Interpol with a Red Notice after failing to appear in court. In addition to the ongoing class action lawsuits in the US, Kwon is now facing another $57 million lawsuit.

In Singapore, 350 investors affected by the collapse of TerraUSD joined hands and filed a lawsuit against Kwon seeking $57 million in damages. Although the lawsuit was filed on September 23rd, it has already attracted a lot of media attention. It alleges that Do Kwon made "fraudulent misrepresentations" about the stability of TerraUSD. TerraUSD is an algorithmic stablecoin that uses financial engineering to maintain a one-to-one link with the US Dollar. However, the mechanism failed in May and both TerraUSD and its sister currency Terra LUNA lost their value and around $40 billion. The collapse caused problems for many investors around the world, contributing to a major cryptocurrency market shakeup. The majority of TerraUSD investors stored their currencies on the Anchor Protocol platform, which promised annualized returns of around 20%. Anchor was also included in the lawsuit because it was called a "principal-protected stablecoin savings product". However, Terraform Labs shares a different sentiment towards the lawsuit since a spokesperson stated that the Singapore-based company will defend itself as it has done nothing wrong. The spokesperson elaborated further, There is a fundamental difference between a public market event and a fraud. The risks were publicly known and discussed and the underlying code was open source. Do Kwon also denies any fraud because he believed in TerraUSD and lost money in the crash. Spanish Investor Julian Moreno Beltran lost over $1.1 million in the collapse, while other lead plaintiffs in the case, including Singapore citizen Douglas Gan Yi Dong, claim to have invested hundreds of thousands of dollars in the collapsed cryptocurrency. They are currently represented by Singapore's top law firm Drew & Napier. Source: Coinedition Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!