A judge in Singapore has had just about enough with Terraform Labs’ lawyers.
Last week, Hri Kumar Nair, a jurist in the city-state’s high court, rejected an appeal by attorneys for Terraform Labs, the DeFi venture once led by Do Kwon, the onetime crypto fugitive.
They were seeking to block a class action lawsuit filed by 377 investors who say they lost $57 million when the Terra group of ventures collapsed in May 2022 and wiped out $60 billion worth of market capitalisation.
But the judge said the many delays by Terraform’s legal team were “troubling” and at odds with new legislation introduced in April 2022 aimed at expediting legal proceedings.
He singled out Terraform for engaging in “procedural and strategic manoeuvres” that were unnecessary for resolving a legal issue.
Looming extradition
Meanwhile, halfway around the world Kwon is seeking to delay another case stemming from the fall of Terraform’s group of ventures — his looming extradition to the US or South Korea to face criminal charges of fraud.
On Dec. 6, Do Kwon’s lawyers in Montenegro, where he has been detained since March, appealed a court ruling clearing the way for his extradition. The move marks a shift because Kwon had earlier agreed to be extradited.
Kwon and an associate were captured in March on the tarmac at Podgorica Airport in Montenegro using fake Costa Rican passports. The 31-year-old crypto entrepreneur had been on the run for months and was the target of an Interpol Red Notice.
While it isn’t clear whether Kwon will be sent to the US or South Korea, it seems only a matter of time before he is put on a plane to face charges that could result in his conviction and a lengthy prison term.
Fallen empire
Goran Rodić, Do Kwon’s lawyer in Montenegro, told DL News he expects the court to decide on the appeal this month.
Even as Kwon awaits his fate in a prison in the Balkan nation, investors are still picking up the pieces of his fallen empire in his onetime home base of Singapore.
‘They had a white paper and… I thought this thing should be good.’
“Steven,” plaintiff against Terra
During Kwon’s stint in the city, he built Terra into a leading DeFi ecosystem complete with a blockchain network, a stablecoin, various tokens, and a lending arm. He lived in one of the city’s most expensive apartment buildings and enjoyed a lavish lifestyle.
He also amassed a crypto fortune believed to be worth hundreds of millions of dollars.
“Steven,” one of the plaintiffs in the class action, said he’s keen to recover his own losses from Do Kwon and Terraform Labs.
Steven said he converted more than $1 million worth of UST, Terra’s stablecoin, during the last bull run.
He believed Terra’s assertions that UST had ample reserves of Bitcoin to support the coin. When UST slipped its peg to the dollar in 2021, he also believed Terra “self-healed” thanks to its stability measures.
Forfeited rights
“I read press releases from Terra about UST saying it was backed by Bitcoin and they were growing the reserves,” said Steven, who requested anonymity because he’s involved in the class action litigation.
“They had a white paper and when I saw that big exchanges were listing it and Do Kwon’s tweets reassuring that UST is stable and truly decentralised, I thought, ‘This thing should be good.’”
Terra’s lawyers are fighting Steven and his fellow investors with a number of procedural moves.
They argued that the users had forfeited their rights to a jury trial or class-action participation due to an arbitration clause on Terra’s website. Arbitration typically means disputes should be settled outside of court with an impartial referee.
So far, their gambit hasn’t worked, prompting a steady stream of appeals.
In the recent hearing, Judge Hri Kumar Nair said any “deliberate or unreasonable” conduct causing further delays would be met with stringent court sanctions.
Luxurious life
Steven said he and his fellow plaintiffs are following Kwon’s extradition proceedings closely. He is optimistic that wherever Kwon gets sent, he will still have to answer for his actions, even if he is not physically in Singapore.
“He was living a luxurious life in Singapore, even after the depeg… He was living in the building next to the head of police in Serbia,” Steven said.
Earlier this year, DL News reported that Do Kwon’s associate Han Chang-Joon was the owner of a €2 million luxury apartment in the prestigious district of Belgrade.
The pair also established a company in Serbia in October 2022, despite being wanted by Interpol in connection with the collapse of Terra.
“He thought he would be untouchable,” Steven said.
Have a tip about crypto newsmakers or regulation? Contact the authors at callan@dlnews.com and ana@dlnews.com.
