Singapore investors have filed a class-action lawsuit against Terraform Labs co-founder Do Kwon, as well as Terra board member Nicholas Platias and Luna Foundation Guard (LFG). 359 Terra investors have applied to the High Court of Singapore.
According to the statement, the defendants misled them that the algorithmic stablecoin TerraUSD (UST) was backed by the US dollar. At the same time, in fact, UST was not a “stablecoin by design” and could not maintain a peg to the US currency, the lawsuit says.
Investors claim they expected high returns from lending to Terraform Labs’ Anchor Protocol borrowing service. According to them, Do Kwon and the leadership of the Luna Foundation Guard “knew or should have known that the plaintiffs wanted to buy and hold stablecoins that are not subject to market volatility in order to receive passive income.
” The plaintiffs sought $57 million in damages from the defendants for lost money and depreciated UST tokens they purchased, held or sold during the May market downturn. In addition, investors demand compensation for moral damages.
Previously, Do Kwon complained about the threats he received. A little later, investors moved from words to deeds – a group of 4,400 users created on Discord is now trying to locate Kwon. However, according to the Singapore authorities, the co-founder of Terra is not in the country.