Do Kwon, the Chief Executive Officer (CEO) of Terraform Labs and co-founder was sued by a court in Singapore after 350 international investors allegedly lost $57 million during the collapse of the TerraUSD (UST) ecosystem.
In context, the UST stablecoin serves as a hedge against cryptocurrency market volatility that has been pegged 1:1 to the United States (US) Dollar, but the opposite happened when Terra faced a drastic decline.
It is understood that Kwon still encourages investors to buy the digital asset even though he knows the ecosystem has a weak structure.
That streak, most investors want to claim back the losses suffered when purchasing UST tokens worth hundreds of thousands of dollars, including a Spanish citizen Julian Moreno and Singaporean Douglas Gan Yi Dong who lost $1.1 million TerraUSD.
Meanwhile, the defendant in the lawsuit is Terraform Labs PTE Ltd, the company's former head of research Nicholas Platias and Luna Foundation Guard (LFG).
However, a spokesperson for Terraform Labs vehemently denied the claims saying that investors should be able to distinguish between the public market and a scam.
In the meantime, the South Korean authorities also issued an arrest warrant and canceled Kwon's passport following a violation of the country's capital market act.
Clarified further, the US Securities and Exchange Commission (SEC) has reinvestigated if the company violated federal investor protection rules by marketing UST.
Until now Kwon's location has not been identified despite various investigations related to Terra, and he even denied the accusations thrown at him by mentioning that he himself suffered a number of losses.
