On June 29, 2026, at the Singapore International Commercial Court, a delayed milestone was provided regarding the TerraUSD (UST) crash storm that began in May 2022: in the second phase of this case, which has been divided into several stages, Terraform Labs Pte Ltd and its founder Do Kwon were clearly mentioned in court judgments related to the UST incident for the first time in Singapore—according to Bloomberg, the court found them guilty of fraudulent behavior in statements related to UST and ruled to pay over $3 million in compensation to 40 UST investors. More strikingly, these 40 individuals only represent a portion of the 275 claimants in this stage, and the disparity in numbers directly exposes that this cross-border accountability battle is still in the early moments of "just flipping over a stack of documents." For global investors who have already suffered significant losses from the crash, this is not an amount sufficient to compensate for the cliff-like drop; however, it is the first time within Singapore's high-level commercial judicial proceedings that the responsibility for the UST crash is fixed with the term "fraud": it represents a phased victory surrounding legal accountability for the Terra crash, as well as the starting point for remaining claimants and other jurisdictional cases to continue their battles.

From the Algorithm Myth to the Cliff-like Plunge: The Huge Pit Left by the UST Crash

Time must be turned back to May 2022. During those days, TerraUSD (UST), which had been packaged as "algorithmically self-regulating," suddenly detached from its pegged target, its price plummeted uncontrollably, triggering market panic. As the most core "stabilizing device" in the Terra ecosystem, the failure of UST quickly transmitted throughout the entire system: the token prices in the Terra ecosystem sharply declined during the crash, dragging down the broader cryptocurrency market, with cascading effects amplifying across different trading platforms and cryptocurrencies. For many investors, this was not just a normal fluctuation, but a fall from "algorithmic myth" into "systemic trample" overnight.

At the center of this crash were Terraform Labs, responsible for designing and operating UST, and its founder Do Kwon. Terraform Labs is the core project behind the Terra ecosystem and UST; from narrative architecture to market promotion, this company and its founder are almost synonymous with the term "UST." When UST crashed in May 2022, causing significant losses for global investors, holders from different countries began to re-evaluate what they had actually bought: they questioned whether Terraform Labs and Do Kwon had sufficiently disclosed extreme risks in their product presentations and whether overly optimistic commitments had been made regarding safety and sustainability. After May 2022, regulatory agencies and investors from multiple countries successively filed legal actions against Terraform Labs and its founder Do Kwon, rapidly transforming the Terra incident from a market disaster into a cross-border legal and regulatory challenge, which is precisely the fundamental background leading to the Singapore judgment today and the pressing demand for legal accountability.

Fraud Determination Established: How the Judge Viewed UST-Related Statements

In the perspective of the Singapore International Commercial Court, this is not purely an incident of "market risk," but a trial centered around rhetoric. The judgment explicitly determined that Terraform Labs and Do Kwon made statements about UST during its promotion that were inconsistent with actual conditions regarding its risks, stability, and other key attributes, constituting fraud. This means that the judge did not accept the defense of "everyone knows the risks are high," but rather focused on what the project party actually communicated to the public, to what extent these statements created a false sense of security, and whether these representations were sufficient to influence ordinary investors' decisions.

The calculation method for compensation also reveals the court's line of thought. In the second phase judgment, the court ruled to pay a total of over $3 million to 40 UST investors, explicitly using the number of UST held and the duration of holding as the main reference factors: who placed bets on UST after the relevant statements by the project party were widely circulated, how long they held it, and to what scale, became important criteria to measure the causal relationship between losses and fraudulent statements. Because of this, this stage only covered a portion of the 275 investors, indicating that the court chose a phased and detailed approach in matching responsibility with losses. By responding in legal language to the mismatch between the project party's public statements and actual risks, this judgment not only represents the calculation results for 40 investors but also serves as the first systematic judicial qualification for the "gap between commitments and reality" in the entire Terra story.

The First 40 Individuals Receive Judgment: A Long Queue for the 275 Claimants

In the second phase hearing of the Singapore International Commercial Court, only 40 individuals were written into the judgment and received compensation amounts totaling over $3 million, while the entire stage of the case encompasses a total of 275 UST investors. The gap between the numbers breaks "collective rights protection" down into very specific tiers: similarly harmed in the same crash, some have already received the amount recognized by the court, while others are still just a number on a waiting list. For the more than 200 individuals at the back of the line, this judgment primarily serves as a template—affirming the court's recognition of the fraud in UST-related statements by Terraform Labs and Do Kwon, and providing an example of how compensation calculations are conducted, but this does not automatically equate to a straightforward outcome for their cases.

Phased hearings imply procedural detail, but they also mean an extended timeline. The second phase only issued compensation rulings for a few people, and briefings did not disclose content or timing from the first phase, nor did they mention whether there would be new phases, how enforcement would proceed, or whether the defendants would appeal; the incompleteness of information constitutes the uncertain environment that remaining claimants must face. The media described the judgment from this day as a "phased progress" in pursuing accountability for the Terra crash; for the first batch of 40 individuals, these four characters signify a few million dollars on paper, but for many still waiting, it marks the starting point for recalibrated psychological expectations: they finally see that a judicial pathway is navigable, but they also understand that each step from being on the list of 275 to truly receiving compensation still requires them to endure a long and fluctuating queue.

From Singapore to Global Courts: Cross-Border Accountability Under the Terra Storm

For those 275 investors caught in the list, the Singapore International Commercial Court is merely a coordinate on the map. Since the UST crash in May 2022, regulatory agencies and investors in multiple countries have sequentially initiated legal action against Terraform Labs and its founder Do Kwon; this is just one piece of a larger puzzle among many cases. The lawsuits across different jurisdictions revolve around the same crash and the same narrative: what exactly did the project party say in UST-related statements, what did they conceal, and whether those statements legally constitute "fraud." When the Singapore International Commercial Court took on this dispute, it first confirmed that this is not an internal dispute limited to a group of retail investors, but a clearly cross-border and commercially substantive controversy.

Because of this, the June 29, 2026 judgment in Singapore is interpreted by Bloomberg within the "global legal accountability sequence" coordinate system. The court recognized fraudulent behavior in UST-related statements by Terraform Labs and Do Kwon in the second phase hearing and ruled to pay more than $3 million in compensation to 40 investors; the money behind this represents a long-consuming battle between project parties and investors across jurisdictions: on one side, they must simultaneously deal with litigation pressures in multiple countries and multiple proceedings, while on the other, they must face potentially differing legal qualifications regarding the same crash from different courts. The "phased progress" viewed by the media serves more like a signal for the remaining claimants still waiting in line—indicating that the Terra storm has already been pushed onto the cross-border judicial track, and what follows will be a long cycle of tug-of-war between the project party and investors across different courts and rules.

After the Judgment: The Risk Red Lines for Cryptocurrency Project Founders Are Drawn More Clearly

This time, the Singapore International Commercial Court formally linked Terraform Labs and Do Kwon to "fraudulent statements," highlighting the red line of information disclosure: when the publicly declared safety, mechanism design, and actual risks do not match, the cost is no longer just a token price going to zero, but can be dismantled, quantified, and held accountable by the judicial system. The compensation amount is based on the number of UST held and the time of holding, meaning that "how much risk you let others take on" has been written into the judgment, providing a model of calculations and burden of proof that can be replicated for subsequent similar cases. The "phased progress," as referred to by the media, indicates that this judgment may become a reference sample for future claims and other project disputes; however, it also highlights the grim reality: out of 275 claimants, only 40 received a judgment first, with cross-border rights protection, phased reviews, and long evidentiary exchanges constituting high thresholds that ordinary investors must face. This briefing does not provide details on whether to appeal or how to enforce, reminding people that there remains a great deal of uncertainty between the paper verdict and actual payments— for founders, the space for rhetoric has been compressed; for investors, this battle has merely completed one round.

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