On June 29, 2026, the Singapore International Commercial Court (SICC) awarded over $3 million in damages to 40 claimants after finding Terraform Labs Pte Ltd and its founder, Do Kwon, liable for fraudulent misrepresentations regarding the stability of TerraUSD (UST). The ruling marks the conclusion of the second tranche of a representative action brought by 275 investors who lost money during the May 2022 collapse of the algorithmic stablecoin.
The SICC accepted that Terraform and Kwon made false or recklessly made claims on the company’s website, in white papers, and through public communications that UST could reliably maintain its $1 peg via an algorithm, reserves, and LUNA-based arbitrage mechanism. The court found that some investors relied on those assurances when purchasing or holding UST, entitling them to compensation for losses up to May 12, 2022. Losses after that date were deemed too speculative to recover.
The damages calculation followed guidance from the Singapore Court of Appeal’s March 2026 decision, which adopted a revised UST cut‑off valuation of about $0.60485 per token. This higher valuation increased payouts for eligible claimants compared to earlier methodologies.
Terraform’s legal troubles extend beyond Singapore. The company is undergoing Chapter 11 bankruptcy proceedings in the United States, where creditors’ claims are being reconciled. A court‑appointed administrator has separately sued market maker Jane Street, alleging it misused confidential information and manipulated markets during the Terra collapse – accusations Jane Street denies. Do Kwon, already serving a 15‑year U.S. prison sentence after pleading guilty to fraud charges, also faces ongoing criminal proceedings in South Korea.
The SICC judgment is expected to influence future representative actions and strengthen disclosure standards for digital asset projects, particularly stablecoins and decentralized finance products.
