Background: The Terra Collapse and the Class Action
In May 2022, the collapse of the Terra ecosystem sent its algorithmic stablecoin, TerraUSD (UST), to zero, causing massive losses for investors worldwide. Subsequently, 275 UST holders filed a joint civil lawsuit in Singapore, accusing Terraform Labs and its founder Do Kwon of fraud. The Singapore International Commercial Court (SICC) is handling the case in multiple tranches, with the second tranche now concluded.
Ruling Details: Over $3 Million Awarded to 40 Claimants
According to the ruling released on June 29, 2026, the court ordered Terraform Labs and Do Kwon to pay a total of more than $3 million in damages to 40 claimants. This is the final outcome of the second tranche of the case. The compensation amount was calculated based on each claimant's UST holdings and the timing of their acquisition. The court explicitly concluded that the defendants committed fraudulent acts in the promotion and operation of UST.
Legal Impact: A Milestone for Stablecoin Fraud and Jurisdiction
This case marks the first time a Singaporean court has imposed substantive liability on a cryptocurrency firm and its founder for losses arising from an algorithmic stablecoin collapse. It establishes a precedent that issuers and individuals can be held personally responsible for investor losses in such scenarios. The ruling may influence similar cases in other jurisdictions, especially those involving cross-border digital asset issuance and fraud.
Industry Implications: Investor Protection and Regulatory Scrutiny
The verdict reinforces the global trend of holding crypto project leaders accountable for fraudulent conduct. As regulators worldwide intensify oversight of stablecoins, the Terraform Labs case serves as a cautionary tale. Even in crypto-friendly jurisdictions like Singapore, fraudulent behavior is not tolerated. The ruling also provides a framework for the remaining 235 claimants in the broader lawsuit, who are awaiting their own verdicts.