- Do Kwon is subject to a lawsuit in Singapore for $57 million.
- The court document states that Kwon knew about “the fundamental fragility of algorithmic stablecoins.”
- The South Korean foreign ministry earlier ordered Do Kwon to surrender his passport.
The co-founder of Terra, Do Kwon is being sued in Singapore for $57 million. A group of Terra investors filed the complaint, claiming that Kwon misled them about the company’s financial situation.
Kwon has been charged with financial misconduct previously. Terra, the stablecoin project led by Do Kwon, has been controversial due to allegations of financial misconduct. According to the lawsuit, Terra’s stablecoin, TerraUSD (UST) — renamed TerraUSD Classic (TUSD) in September following the SEC’s warning — was “structurally fragile.” The document contends that Kwon knew of this fragility and intentionally misled investors.
On Wednesday, November 2, there will be a follow-up hearing for the lawsuit, according to Singapore’s official judiciary website.
“The Defendants made the said representations fraudulently either well knowing that they were false and untrue, or recklessly not caring whether they were true or false,” according to the court.
Do Kwon and his group defend the lawsuit while disputing all claims. Do Kwon might have to make a sizable payment if they lose. Do Kwon is still optimistic and excited about the future despite the litigation. He is sure that he will win the lawsuit and that his firm will continue to succeed.
In September, South Korean officials issued a rescinded arrest order for the Terra co-founder. Interpol then added Kwon to its Red Notice list, urging that law enforcement identify and perhaps jail him.
The lawsuit seeks an injunction to prevent further distribution of TerraUSD, disgorgement of profits, and restitution to investors. Kwon’s address was listed in Singapore in the lawsuit filed on September 23. However, some reports claim that he may have left the country. The co-founder of Terra was given an order by South Korea’s foreign ministry (Kwon is a Korean national) on October 6 to turn up his passport or risk revoking it.
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