Woofun AI reports that the Singapore International Commercial Court has ruled Terraform Labs and co-founder Do Kwon liable for fraud regarding the 2022 collapse of the TerraUSD stablecoin. The court mandated the defendants pay more than $3 million in damages to a specific group of 40 plaintiffs who initiated a class-action lawsuit. This verdict emerged during a second hearing in a case originally filed by 275 plaintiffs alleging financial losses after UST de-pegged in May 2022. The judicial body explicitly recognized fraudulent conduct by the defendants, directly resulting in the damages award for this subset of claimants.

The ruling represents a significant legal milestone following one of the most prominent failures in the cryptocurrency sector. This judgment reinforces the principle that crypto project founders and entities face accountability under existing legal frameworks for misleading investors. The Terra ecosystem collapse erased approximately $40 billion in market value and precipitated a broader market downturn, attracting intense regulatory scrutiny globally. Per Woofun AI, the SICC decision may influence other pending litigation against Terraform Labs while setting a precedent for future fraud cases involving digital assets.

Although the $3 million award covers only a fraction of total losses claimed by all 275 original plaintiffs, the ruling establishes a legal pathway for other victims to seek recourse. The court's recognition of fraud liability strengthens the position of investors who suffered losses during the UST collapse, though individual recoveries may vary depending on jurisdiction and the defendants' ability to pay. The Singapore court's decision adds to the growing body of legal actions against Terraform Labs and Do Kwon, who also faces criminal charges in the United States and South Korea.

As the crypto industry continues to mature, this ruling underscores the importance of transparency and accountability in stablecoin operations and investor communications.