Singapore court awards US$3M over UST collapse

• A Singapore court awarded more than US$3 million to 40 investors after finding Terraform Labs and Do Kwon liable for fraudulent representations about TerraUSD.
• The ruling applied a revised UST valuation of about US$0.60485, increasing compensation for eligible claimants.
• The decision adds to Terraform's ongoing legal challenges, including bankruptcy proceedings and related litigation in the United States.

The Singapore International Commercial Court (SICC) awarded more than US$3 million to 40 investors after finding Terraform Labs and Do Kwon liable for fraudulent representations about TerraUSD (CRYPTO:UST) during its May 2022 collapse.

The judgment concludes the second tranche of a representative lawsuit brought by 275 investors and follows a 2025 ruling that found Terraform and Kwon made actionable fraudulent representations, while a March 2026 appeal increased the valuation used to calculate damages to about US$0.60485 per UST.

The court found that Terraform Labs and Do Kwon made false representations that TerraUSD (CRYPTO:UST) could reliably maintain its US$1 peg through its algorithmic design, reserves and LUNA (CRYPTO:LUNA) arbitrage mechanism.

The SICC ruled that eligible investors relied on those representations when buying or holding UST before 12 May 2022, with compensation calculated on that basis, while losses incurred after that date were considered too speculative to recover.

Terraform Labs remains subject to Chapter 11 bankruptcy proceedings in the United States, while Do Kwon continues to face criminal proceedings in South Korea, and as Terraform is privately held there was no share price reaction to report.

The ruling also follows a lawsuit filed by Terraform's bankruptcy administrator against Jane Street, which alleges the trading firm profited from confidential information during the Terra ecosystem's collapse, allegations that Jane Street has denied.

The decision adds to a growing body of court rulings examining how digital asset projects disclosed risks to investors and could influence future legal actions involving stablecoins and decentralised finance projects.