Terraform Labs and its founder, Do Kwon, are facing a class-action lawsuit in Singapore after the High Court dismissed an attempt to have it thrown out. The lawsuit was filed in September 2022 by Julian Moreno Beltran and Douglas Gan on behalf of 375 others, who claim they lost a combined $57 million. The claimants are alleging fraudulent misrepresentation by Terraform Labs, Do Kwon, and his co-founders in their promotion of the algorithmic stablecoin terraUSD (UST), which led them to purchase and stake the tokens and hold on to them as UST lost its peg to the U.S. dollar in May 2022 and plunged to less than $0.10.

Terraform lawyers tried to shift the action to an arbitration process, citing the website’s terms of use, claiming users had foregone the right to trial and to join a class-action suit. The court ruled otherwise, and the case is moving forward. “To our knowledge, this is the furthest a class-action suit has progressed in the world,” said Mahesh Rai, a director of Drew & Napier, which represents the claimants. “Now we are approaching discovery stage.”

Terraform also faces charges of fraud in the U.S. brought by the Securities and Exchange Commission, which alleges it was selling unregistered securities. In October, Terraform asked for this case to be dismissed on the grounds that the regulator had been unable to make its case.

The claimants allege that they lost a combined $57 million due to the fraudulent misrepresentation. Terraform lawyers tried to shift the action to an arbitration process, but the court ruled otherwise, and the case is moving forward. The company also faces charges of fraud in the U.S. brought by the Securities and Exchange Commission.