Legal Challenges for Terraform Labs in Singapore
Terraform Labs, a defunct blockchain protocol, is currently facing legal challenges in Singapore.
The High Court of Singapore has rejected the efforts of Terraform Labs and its founder, Do Kwon, to overturn a class-action lawsuit.
The court ruled that the defendants failed to establish a valid arbitration agreement between them and the claimants.
The arbitration clause on the Terra website implied that the claimants waived their rights to a trial by jury or participation in a representative action.
Earlier this year, the Assistant Registrar denied Terraform’s motion for a stay in favor of arbitration, stating that the terms of use were not properly highlighted to the claimants.
Terraform’s attempt to shift the lawsuit to confidential arbitration proceedings was also denied.
$57 Million Lost and US Lawsuit Pending
A lawsuit filed by Julian Moreno Beltran and Douglas Gan alleges that Terraform Labs and its founder fraudulently misrepresented its UST assets.
The claimants claim a collective loss of $57 million due to illegal activities involving Terraform and its founder.
TerraUST, described as the world’s first algorithmic stablecoin, collapsed after failing to maintain its 1:1 peg to the US dollar.
Investors withdrew their UST from Anchor Protocol, causing the stablecoin to plummet. The subsequent depegging led to significant losses in the crypto industry.
The US Securities and Exchange Commission (SEC) has also taken legal action against Terraform Labs, accusing them of fraud for selling unregistered securities.
Hot Take: Setbacks for Terraform Labs
Terraform Labs is facing setbacks in its legal battles as it attempts to overturn a class-action lawsuit and respond to charges from the US SEC.
The High Court of Singapore rejected Terraform’s efforts to establish a valid arbitration agreement and shift the lawsuit to confidential arbitration proceedings.
Meanwhile, a lawsuit filed by investors alleges fraudulent misrepresentation of UST assets and claims a collective loss of $57 million.
Terraform’s collapse and subsequent depegging led to significant losses in the crypto industry, with billions of dollars wiped out.
The US SEC has also taken legal action against Terraform, accusing them of fraud for selling unregistered securities.
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