According to sources, the SICC has awarded over $3 million in damages to 40 claimants against cryptocurrency firm Terraform Labs Pte Ltd and its founder, Do Kwon. The ruling concludes the second tranche of a representative fraud action tied to the May 2022 collapse of the TerraUSD algorithmic stablecoin.
Meanwhile, the case was filed by 275 plaintiffs who were seeking damages for losses incurred as a result of the 2022 de-pegging event of TerraUSD (UST). The ruling follows the 2025 first-tranche judgment, which found actionable fraudulent representations, and a March 2026 Court of Appeal decision, which clarified the approach to calculating damages, using a more realistic UST cut-off valuation.
The court determined that Terraform and Do Kwon made multiple fraudulent misrepresentations about the stability of TerraUSD, which induced certain investors to purchase and retain the token, ultimately causing significant financial losses when the stablecoin collapsed.
The fraudulent representations included that UST was able to maintain a reliable US dollar peg with robust algorithms, reserves, and LUNA-based arbitrage. Published on Terraform’s website, whitepapers, and public communications, the court found these claims false, concluding that defendants knew or were reckless regarding their falsity.
The court awarded damages based on the reliance...
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