Terra Classic

TerraClassicUSD

<p>The High Court in Singapore has dismissed an appeal filed by Terraform Labs and its co-founders, marking a significant step forward for the plaintiffs behind a class action initiated against the company.</p><p>That’s <a href="https://www.businesstimes.com.sg/wealth/class-action-377-parties-against-terraform-do-kwon-move-ahead-singapore-court" rel="noopener noreferrer nofollow">according</a> to a report published by Singaporean publication, the Business Times, on Thursday. The legal development follows the collapse of TerraUSD (UST) tokens in May of 2022, resulting in the loss of billions of dollars in market value. The collapse, in turn, has led to several lawsuits against Terraform, its founders and affiliated entities, with those court actions playing out in courtrooms in Singapore, South Korea, Montenegro and the United States.</p><h2 id="header-0">Fraudulent misrepresentation alleged</h2><p>The class-action suit, initiated in September 2022 by Julian Moreno Beltran and Douglas Gan on behalf of 375 others, alleges fraudulent misrepresentation by Terraform, Co-Founders Do Kwon and Nikolaos Alexandros Platias and the Luna Foundation Guard (LFG). The claimants argue that these misrepresentations induced them to purchase UST, stake the tokens and retain them as their value plummeted.</p><p>UST had been designed to be pegged to the U.S. dollar with a 1:1 ratio. However, flaws in the tokenomics behind that digital asset meant that it faced a loss of confidence in May 2022, trading at around $0.05 when the court’s decision was released. The claimants collectively suffered losses of nearly $57 million.</p><h2 id="header-1">Terms of use cited in attempt to dismiss</h2><p>Terraform attempted to have the lawsuit dismissed by invoking an arbitration clause in its website’s terms of use, asserting that users had waived their rights to a jury trial or participation in a class action. However, the Assistant Registrar (AR) rejected this application, stating that the defendants failed to establish an arbitration agreement.</p><p>The AR highlighted that the terms of use were inconspicuous on the website, and there was insufficient effort to draw users’ attention to those clauses. Terraform, Kwon and associated entities appealed this decision, which was heard by Justice Hri Kumar Nair on Sept. 25.</p><p>Despite establishing a prima facie case for an arbitration agreement, the court ruled that Terraform’s participation in the legal proceedings, including filing a defense and counterclaim, meant it could no longer seek a stay in favor of arbitration.</p><h2 id="header-2">Multiple actions</h2><p>It’s a busy time for all stakeholders relative to the Terraform collapse. Playing out within the same timeframe is a <a href="https://www.sec.gov/news/press-release/2023-32" rel="noopener noreferrer nofollow">lawsuit</a> in the United States taken by the Securities and Exchange Commission (SEC) against Terraform and Do Kwon, where the SEC claims that crypto asset securities fraud has been carried out.</p><p>The latest installments in that saga in recent weeks have seen <a href="https://medium.com/&#64;coinness.gl/sec-seeks-summary-judgment-against-terraform-labs-076d42070287" rel="noopener noreferrer nofollow">both parties</a> file to seek summary judgment. Last week, a court in New York <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.594150/gov.uscourts.nysd.594150.135.0.pdf" rel="noopener noreferrer nofollow">approved</a> the confidential treatment of specific documentation which had been produced by Jump Crypto, a division of proprietary trading firm Jump Trading.</p><p>There are also criminal actions underway. In a South Korean court in October, Terraform Labs Co-Founder Daniel Shin <a href="https://medium.com/&#64;coinness.gl/terraform-labs-co-founder-daniel-shin-denies-wrongdoing-in-luna-collapse-1dffa9581dc4" rel="noopener noreferrer nofollow">denied</a> wrongdoing in the Terra/Luna collapse. Meanwhile, a court in Montenegro has <a href="https://cointelegraph.com/news/do-kwon-extradition-montenegro" rel="noopener noreferrer nofollow">approved</a> the extradition of Do Kwon, with a final decision to be made shortly as regards whether he should be extradited to the United States or South Korea.</p>

Terraform Labs fails to halt class action lawsuit

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