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Grounds publishedDecided 4 Nov 2026
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Singapore International Commercial Court

Kupetz, Jonathan and others v Terraform Labs Pte Ltd and others

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[2026] SGHC(I) 25Case no. Originating Application No 3 of 2024

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  1. Anselmo Reyes IJ:

  2. Introduction

  3. [1] This judgment concerns the third tranche of the civil trial in SIC/OA 3/2024 (“OA 3”). That tranche took place from 16 June to 2 July 2026 (“Third Tranche”). This judgment should be read in conjunction with earlier judgments in OA 3, specifically:

  4. [2] The legal framework, the nature of the representations which the defendants conceded were false and made fraudulently (collectively, the “Conceded Representations”), and the principles governing reliance and damages have been set out in detail in those earlier judgments and will not be repeated here.

  5. Brief overview of the proceedings so far

  6. [4] OA 3 arises from the collapse of TerraUSD (“UST”). UST was an algorithmic stablecoin issued by the First Defendant, Terraform Labs Pte. Ltd. (“TFL”). The Second Defendant, Kwon Do Hyeong (“Do Kwon”), was the co-founder and chief executive officer of TFL. The Third Defendant, Luna Foundation Guard Ltd. (“LFG”), was a foundation established to support the “Terra Ecosystem”. The Ecosystem comprises the decentralised network consisting of the Terra blockchain protocol, UST, associated tokens and platforms, and the Anchor Protocol (“Anchor”) (see [8]–[9] of the First Tranche Judgment). The Claimant investors purchased UST in reliance on the Defendants’ representations as to UST’s stability and the integrity of UST’s peg to the US dollar. UST collapsed in May 2022, losing most of its value within days.

  7. The First Tranche Judgment and its appeal

  8. [5] The First Tranche Judgment resolved common issues in OA 3. I found that of the six Conceded Representations by the Defendants, only the following were actionable (See Second Tranche Judgment at [5]–[7]; First Tranche Judgment at [71]–[85]):

  9. (a) That UST was stable by design as it was pegged to a stable fiat currency (“First Representation”);

  10. (b) that the Terra Protocol and its underlying token mechanics would be able to maintain the price stability of UST regardless of market size, volatility or demand through an algorithm that would allow an arbitrage process to happen with UST’s sister token, LUNA, guaranteeing that UST would always return to the one US dollar peg (“Second Representation”);

  11. (c) that UST holders would always be able to exchange one UST for one US dollars’ worth of LUNA on the Terra Protocol (“Third Representation”);

  12. (d) that Anchor was a principal-guaranteed stablecoin savings product whereby UST holders could enjoy the stability of holding a stablecoin while earning passive income (“Fourth Representation”); and

  13. (e) that LFG had raised US$1bn through the sale of LUNA tokens to establish a reserve fund to maintain the UST peg to the US dollar (“Sixth Representation”).

  14. The First Tranche Judgment established the legal framework for assessing reliance and damages. That framework included the concept of a “Cut-Off Time”, being that point in time by which a reasonable investor would have appreciated that the Conceded Representations were false and could no longer be relied upon (See First Tranche Judgment at [114]; Second Tranche Judgment at [9]). The Cut-Off Time is 12.01 am UTC on 12 May 2022. It applies to all claimants unless they can show individual circumstances that justify a different time. Thus, claimants can adduce evidence to displace the default Cut-Off Time in their situation (see Second Trial Judgment at [10]; First Tranche CA Judgment at [112]–[126]). For example, if a claimant did not see the relevant tweets by the Cut-Off Time, or if a claimant tried but was unable to sell their UST in time due to factors beyond their control, losses beyond the default Cut-Off Time may still be attributed to the defendants.

  15. [6] The Court of Appeal established that the “Cut-Off Price”, that is, the price at which a reasonable investor would have liquidated one’s UST holdings at the Cut-Off Time, is US$0.60485 per UST token. The Cut-Off Price is the average of the opening and closing price of UST on 12 May 2022 (see Second Trial Judgment at [11]; First Tranche CA Judgment at [146]–[148]).

  16. The Second Tranche Judgment

  17. [7] The Second Tranche Judgment addressed similar factual patterns that recurred among various claimants. It is helpful to summarise the principles governing those similar fact patterns here as they recur among Third Tranche claimants.

  18. [8] On the preparation and evaluation of witness statements, the Second Tranche Judgment made clear that each claimant’s witness statement must represent their own independent evidence in their own words. While the use of open-ended questionnaires to gather evidence from large numbers of claimants in a representative action is permissible as a practical matter, solicitors must ensure that the substance of each claimant’s responses is preserved and that the resulting statement is built from the witness’s answers rather than around the solicitor’s questions. The use of one witness’ statement as a template for another is not permissible. Where artificial intelligence (“AI”) tools are used in drafting, such tools may assist with structure, grammar and form. But the evidence and words must remain those of the witness and not of AI: Second Tranche Judgment at [22]–[31].

  19. [9] On reliance, each claimant must establish that they read one or more of the pleaded sources of the Conceded Representations, understood those representations to bear the pleaded meanings, and purchased or held UST with those representations in mind. The applicable standard is subjective. It is no defence that a claimant, by reason of their professional background or investment experience, ought not to have relied on the representations, or that a prudent investor would have acted differently: Second Tranche Judgment at [38]–[42]. Having sight of the limitation of liability clauses in the Anchor Terms of Service does not negate reliance, as a party cannot contractually exclude liability for their own fraudulent misrepresentation: Second Tranche Judgment at [37]. The court must assess whether each claimant, reading the relevant source documents of the actionable Conceded Representations in their totality and in context, formed the alleged understanding: Second Tranche Judgment at [45].

  20. [10] On the application of the Cut-Off Time, a mere assertion of continued belief in the representations, or a hope that the UST peg would recover, is not sufficient to displace the default position: Second Tranche Judgment at [47], [54]–[55]. Nor does the depeg event in May 2021 provide a credible basis for continued reliance beyond the default Cut-Off Time, given the fundamentally different scale and duration of the May 2022 collapse: Second Tranche Judgment at [56]. Further, personal difficulties, whether family-related, work-related or otherwise, do not without more justify an extension: Second Tranche Judgment at [57]. Thus, the default Cut-Off Time of 12.01 am UTC on 12 May 2022 applies unless a claimant adduces evidence of individual circumstances justifying a departure. Examples are:

  21. (a) An extension may be warranted where a claimant was prevented from learning of the depeg by the Cut-Off Time, or where external forces beyond their control prevented them from liquidating their holdings despite their best efforts. For example, Mr Bernhard Alexander Friedrich Frey attended a silent meditation monastery retreat from 9 to 16 May 2022. He surrendered his mobile phone and had no access to the internet during that period. He was therefore unaware of the depeg and could not have read the 11 May 2022 tweets or sold his UST in time. As he was physically unable to withdraw his UST from Anchor or sell any of it until he returned home on 16 May 2022, an extended Cut-Off Time of 16 May 2022 was applied to him: Second Tranche Judgment at [167]–[169].

  22. (b) Conversely, the Cut-Off Time may be brought forward where on the evidence a claimant ceased to rely on the representations before the default date. An example is where a claimant engaged in speculative swing trading or sold substantially all of their UST holdings before that time. Thus, for instance, Mr Gary Koh Boon Thong engaged in post-depeg swing trading, having sold all his UST holdings during the depeg and re-entered the market to buy UST at a lower price in the hope of profiting from a recovery. On 11 May 2022, he sold approximately 140,000 UST on KuCoin at less than 25 cents on the dollar, then bought and sold again throughout that day. As this conduct was inconsistent with continuing reliance on the representations and was instead speculative in nature, his Cut-Off Time was brought forward to 11 May 2022, the date on which his reliance on the representations ended and his swing trading began: Second Tranche Judgment at [318]–[319].

  23. [11] On the calculation of damages, damages are assessed on the reliance measure using the formula in “Permutation 2”, save where a claimant's individual Cut-Off Time departs from the default (See Second Tranche Judgment at [61]). The Permutation 2 formula may be described thus: Total Purchase Value – (Actual Sales Proceeds + Notional Sale Proceeds) = Net Loss (see Second Tranche Judgment at [63]). More particularly:

  24. (a) Total Purchase Value is the aggregate value of all the claimant’s purchases of UST up to and including the Cut-Off Time, including UST earned as yield, whether on Anchor or on some other platform. The value of each purchase is determined using the hourly price of UST on CoinGecko, matched to the time of each transaction.

  25. (b) Actual Sales Proceeds is the aggregate value of all the claimant’s sales of UST up to and including the Cut-Off Time, similarly, valued by reference to CoinGecko data.

  26. (c) Notional Sale Proceeds is the value of any UST still held by the claimant as at the Cut-Off Time, treated as notionally sold at the Cut-Off Price of US$0.60485 per UST token.

  27. [12] On aggravated damages, a claimant must establish that (1) there was contumelious or exceptional conduct on the part of the defendants and (2) the claimant suffered intangible loss, injury to personality, or mental distress of a character and severity distinct from and beyond the financial loss compensated by the general damages award (Noor Azlin bte Abdul Rahman v Changi General Hospital Pte Ltd [2022] 1 SLR 689). The absence of medical or professional evidence is not necessarily fatal to such a claim. But where a claimant relies solely on their own testimony, such evidence will be carefully scrutinised: Second Tranche Judgment at [69]–[71]. None of the claimants in the Second Tranche satisfied the evidentiary threshold for aggravated damages.

  28. Common issues in the Third Tranche

  29. [13] I begin by addressing issues common to the claimants’ submissions in this tranche.

  30. The application of the Cut-Off Time

  31. [14] In applying the Cut-Off Time to claimants in the Second Tranche, the starting point is what a reasonable investor would have known or appreciated by 12 May 2022 at 12.01 am UTC, having regard to Do Kwon’s tweets of 11 May 2022.

  32. [15] The Conceded Representations essentially boil down to a representation that UST was a stablecoin that would always maintain a stable 1:1 peg to the US dollar through an algorithmic mechanism. That is a statement about UST’s design and operation. However, by 11 May 2022, that statement was plainly and demonstrably false. UST failed to maintain its peg over four consecutive days. On 11 May 2022, UST hit a low of approximately US$0.2998 (see First Tranche Judgment at [110]). The algorithm and the arbitrage mechanism that were supposed to maintain UST’s parity to the US dollar at all times would manifestly not be working. Indeed, to the extent that there was a reserve fund that was supposed to prop up the UST-US dollar peg in times of deep stress, that reserve was plainly not working either.

  33. [16] Reliance on the Conceded Representations cannot therefore have survived the point at which the stability of the UST to US dollar peg was palpably false. In such circumstances, a claimant having a subjective belief that UST would somehow eventually return to its peg would not be relying on the Conceded Representations. Such claimant would instead be holding UST on a hope or prediction about future market behaviour based on the claimant’s evaluation of whatever factors the claimant believed to be relevant at the time, including what other UST investors were saying over cyberspace.

  34. [17] The claimant might be in a state of shock and do nothing. The claimant might believe that, at some point in the near or distant future, UST’s algorithm or arbitrage mechanism could restore parity with the US dollar. The claimant might be wilfully blind and pretend that nothing remarkable has happened. But none of these responses to the May 2022 depegging of UST could, as a matter of law, constitute reliance on the Conceded Representations. The Conceded Representations said nothing about what would happened to UST in the future. They simply described what UST and its components (eg, algorithm, arbitrage mechanism, reserve fund) were. Once those descriptions were self-evidently falsified and shown not to be performing the function of maintaining the UST-US dollar parity at all times, there could be no content left in the Conceded Representations capable of being relied upon, whether objectively or subjectively. Accordingly, putting to one side the question of when a claimant first learned of the depegging, the Cut-Off Time is justified on the ground that, by 12 May 2022 at 12.01 am UTC, the Conceded Representations would have been devoid of meaningful content capable of supporting reliance.

  35. [18] I therefore reject the line of argument advanced by several Claimants, to the effect that they continued to “rely” on the Conceded Representations after the May 2022 depeg because they believed the stability mechanism was “not working fast enough” but would eventually restore the peg. I accept the defendants’ contention that such an explanation is neither grounded in the Conceded Representations nor consistent with the Claimants’ pleaded understanding of them. That is because the contention conflates reliance on a representation of an existing fact (that UST was a stablecoin that would always maintain a stable 1:1 peg), with a hope of future market recovery. The belief that the algorithm supposed to maintain the peg was not working fast enough cannot constitute reliance on the Conceded Representations as a matter of law and cannot therefore serve as a reason for extending the Cut-Off Time.

  36. Credibility of the claimants’ evidence

  37. [19] The defendants question the credibility of four Claimants in the Third Tranche: Mr Daniel Lance Sakai (“Mr Sakai”), Mr Feres Pepjin Hassan (“Mr Hassan”), Mr Christian Denk (“Mr Denk”), and Mr Cheong Yuen Kuen (“Mr. Cheong”). As regards Mr Sakai, Mr Hassan and Mr Cheong, the defendants argue that their evidence on when they had access to the source documents of the Conceded Representations was shifting, unsupported and reconstructed. As regards Mr Denk, the defendants say that his witness statements derived heavily from those of other claimants, casting doubt on whether Mr Denk’s witness statements were genuinely his own. Similar arguments were raised of other witnesses in the Second Tranche Judgment. I apply the same approach in this tranche, and will not repeat the general analysis.

  38. [20] But I highlight two points here. First, the question whether inconsistency in a witness’ evidence undermines credibility is a matter within the court’s fact-finding prerogative. The events underlying OA 3 took place years ago. The transactions in question were conducted in the cryptocurrency space, an environment characterised by speed, volume, and the ephemeral nature of digital records. Browsing histories are routinely deleted, devices are replaced, and the sequence of online activity is seldom preserved with the documentary exactitude that one might expect from conventional commercial paper dealings. It would be both unrealistic and unfair to expect claimants to recall exactly the chronology of events and transactions. Accordingly, I affirm the approach taken in the Second Tranche Judgment. The mere fact that a claimant made a mistake in an earlier recollection of the dates when one accessed source documents and later corrected this mistake, does not invariably mean that the claimant did not read the source documents or rely on the Conceded Representations (See Second Tranche Judgment at [255] and [330]). The court must be alive to the practical realities that confronted the claimants who were navigating a fast-moving digital landscape in good faith, unaware that they were acting on fraudulent representations. Second, on the possible copying across claimants’ witness statements, it suffices to refer to the principles set out in the Second Tranche Judgment (see above, [8]).

  39. Whether UST was a “risk-free” investment

  40. [21] The defendants contend that several Claimants, in cross-examination, alluded to an understanding that investing in UST was not “risk-free”, which undermines the credibility of their alleged understanding and reliance on the Conceded Representations: Mr Sakai, Mr Tan Ming Kai Justin (“Mr Justin Tan”), Mr Choy Jian Wei (“Mr Choy”), and Mr Lip Yee Tang (“Mr Lip”). I do not accept this submission. As I repeatedly made clear in the Second Tranche Judgment, the applicable standard for reliance is the claimants’ subjective understanding of the Conceded Representations, not how the source documents should be objectively interpreted. Thus, the question is not whether one would have regarded investing in UST as a risk-free endeavour, but whether the individual claimant understood the Conceded Representations to convey that UST would maintain its peg with the US dollar. A claimant who understood the Conceded Representations to mean that UST was designed to maintain a stable 1:1 peg with the US dollar and purchased UST on that basis, is not required to also have understood that UST carried no risk whatsoever in any market condition. An understanding that residual risk exists in an investment does not preclude reliance. A claimant may acknowledge that no investment is totally risk-free and yet rely on a representation that a particular asset is designed and operated so as to maintain its value. I do not regard these to be inconsistent positions. For instance, in the Second Tranche Judgment, the defendants similarly suggested that Mr Alberto Grimaudo appreciated that there was some risk in investing in UST. I found that (Second Tranche Judgment at [286]):

  41. Failure to use the UST-LUNA swap mechanism

  42. [22] The defendants submit that the Third Tranche Claimants’ failure to use the UST-LUNA arbitrage mechanism during the May 2022 depeg serves as probative evidence that they did not believe the stability mechanism was operating as represented, thereby militating against any reliance on the Conceded Representations. I reject this submission. The relevant inquiry remains a subjective one, namely, (1) whether a claimant understood the Conceded Representations to convey that UST was designed and operated to maintain its 1:1 US dollar peg and (2) whether that understanding induced the decision to purchase UST. A claimant who read the source documents and believed the Conceded Representations, is not required to have personally engaged in UST-LUNA arbitrage trading to establish reliance. A representee may well have understood and believed in the stability mechanism without ever having occasion, or inclination, to deploy it themselves. As the claimants observe, many claimants in the previous tranches did not engage in the arbitrage opportunities afforded by the swap mechanism. But this did not preclude a finding of reliance on the Conceded Representations. I see no reason to depart from this approach.

  43. Whether reliance on the Fourth Representation is sufficient

  44. [23] Three of the Claimants in the Third Tranche (ie, Mr Lee Yong Kang (“Mr Yong Kang”), Mr Loo Tian Hong, Derrick (“Mr Derrick”), and Mr Low Chee Yong (“Mr Chee Yong”)) relied solely on the Fourth and Fifth Representations in purchasing UST. The defendants say that, since the Fifth Representation is not actionable, these Claimants’ claims depend entirely on establishing reliance on the Fourth Representation. However, reliance on the Fourth Representation alone is insufficient to entitle them to damages.

  45. [24] The Fourth Representation derived from the Anchor White Paper. It presented Anchor as a “principal-guaranteed stablecoin savings product where UST holders could enjoy the stability of holding a stablecoin while earning passive income”. The defendants argue that the Anchor White Paper does not speak to the value of UST itself, nor does it explain how UST would maintain its peg against the US dollar. On the defendants’ case, the Fourth Representation only operates if the Claimant first understood and relied on the First to Third Representations, from which the Claimants would have derived that UST was an algorithmic stablecoin guaranteed to maintain its peg to the US dollar under all conditions. The defendants further point to a passage in the Anchor White Paper itself, which states that Anchor “guarantees the principal of depositors by liquidating borrowers’ collateral via liquidation contracts and third-party arbitrageurs”. That guarantee only goes to the UST staked on Anchor. It says nothing (the defendants submit) about how UST is to be valued against the US dollar or how the peg with the US dollar is maintained.

  46. [25] I agree with the Claimants that this argument proceeds on a misreading of the claimants’ case. It was never the pleaded case of Mr Yong Kang, Mr Derrick, Mr Chee Yong, and Mr Arun Kumar Sivaramavimalamoorthy (ie, the Representative Claimants in the First Tranche of the three claimants in question here) that they derived their understanding of UST’s stability only from the Fourth Representation. Instead, their case is that while they may have understood that UST was a stablecoin pegged to the US dollar from sources independent to those underlying the Conceded Representations, the Fourth Representations nevertheless operated on their minds in their decision to invest in UST.

  47. [26] The inquiry is therefore a straightforward one. First, did the three Claimants here believe the Fourth Representation (ie, that Anchor was a principal-guaranteed savings protocol that would allow the three claimants to enjoy the stability of holding a stablecoin whilst earning passive income)? Second, did that representation operate on their minds when they purchased UST? Having arrived at their understanding of UST’s stability from other sources, if I am satisfied that the three Claimants found in the Fourth Representation an additional and independent basis for their decision to purchase UST, reliance for the purposes of damages would be established.

  48. [27] There is a further reason why reliance on the Fourth Representation alone is sufficient. In the abstract of the Anchor White Paper, the Anchor Protocol is not merely described as a savings protocol. Instead, Anchor’s offering is juxtaposed against the backdrop of the “price volatility of most cryptoassets”, which normally makes staking “unfit for the vast majority of consumers”. Against this backdrop, Anchor is presented as “a principal-protected stablecoin savings product that pays depositors a stable interest rate”. The Anchor White Paper thus holds out depositing in Anchor as a refuge from the volatility that afflicts ordinary cryptoassets. The “principal” that is protected is denominated in UST, purportedly a stablecoin. For that protection to have any meaningful content, UST must itself be stable in value. Since UST is pegged to the US dollar, the natural and inevitable inference that a reader would draw is that the principal being protected is stable relative to the US dollar. Anchor thus offers a principal-protected stablecoin savings product which implicitly represents that UST is designed to hold its value as against a fiat currency. The Fourth Representation contains a representation as to UST’s stability independently of the First to Third Representations.

  49. [28] I therefore reject the defendants’ argument that reliance on the Fourth Representation alone is not enough to entitle a claimant to damages.

  50. Analysis of each Claimant’s situation

  51. [29] I turn now to analyse each Claimant’s situation. I note at the outset that the defendants do not challenge the Third Tranche Claimants’ ownership of their blockchain wallets or centralised exchange accounts. Further, the parties agree on the Permutation 2 figures for all Third Tranche Claimants.

  52. David Thomas Kapla

  53. [30] Mr David Thomas Kapla (“Mr Kapla”) claims US$119,399.36 in damages. He purchased 140,454.01 UST on KuCoin between 6 March 2022 and 2 April 2022. He deposited all of his UST into the Anchor Protocol to earn interest. He relies on the First to Fifth Representations. He first learned of the depeg on 9 May 2022. He did not lose faith in the representations until 13 July 2022 upon realising that no recovery plan had been implemented. Mr Kapla seeks an extended Cut-Off Time of 13 July 2022, 11.59 pm UTC.

  54. [31] On reliance, I accept that Mr Kapla accessed and read the Terra White Paper, Terraform Website, Anchor White Paper and Anchor Website before purchasing UST in March 2022. I accept his explanation for the absence of evidence of his borrowing history. He did not retain his browsing history on his laptop or mobile phone due to security and privacy concerns. The defendants did not cross-examine Mr Kapla on whether he read the source documents to the Conceded Representation.

  55. [32] The defendants challenge the reliability of Mr Kapla’s evidence concerning reliance on two grounds. First, they contend that Mr Kapla never understood the representations in the manner pleaded as he appreciated the risk that the peg would not hold. The defendants point to his concession under cross-examination that there was “no inherent guarantee from TFL that the peg would hold in all market conditions”. I reject this submission. The understanding that some risk exists in any investment, including in UST, does not preclude reliance. The question is whether Mr Kapla subjectively understood the pleaded meanings of the relevant representations and had them present in his mind when he purchased UST. Second, the defendants contend that Mr Kapla’s positions on risk are incoherent and irreconcilable. Because he accepted that there were risks in trading UST, he could not have understood that the peg was guaranteed to hold in all market conditions. I disagree. A lay investor may simultaneously appreciate that no investment is risk-free while believing, based on what he has read, that the risk is negligible. I find that Mr Kapla relied on the First, Second, Third and Fourth Representations. The Fifth Representation is not actionable per the First Tranche Judgment at [79].

  56. [33] I apply the default Cut-Off Time of 12.01 am UTC on 12 May 2022. Mr Kapla says that, although he read Do Kwon’s tweets on or around 9 May 2022 to 11 May 2022, he continued to believe that the peg would recover. He adduces screenshots of Telegram chats with other members of a cryptocurrency Telegram group of which he was a member. From the screenshots, it is evident that, as of 10 May 2022, Mr Kapla believed that the peg would recover. But I do not accept Mr Kapla’s case that the Cut-Off Time should be extended as a result. In my view, Mr. Kapla, having read Do Kwon’s tweets and observed UST’s failure to re-peg from 7 to 11 May 2022, appreciated by 12.01 am UTC on 12 May 2022 that the Conceded Representations were false. The one UST to one US dollar peg obviously did not always hold. Consequently, by 12 May 2022 at 12.01 am UTC, the Conceded Representations could not have any content capable of being relied upon (see above at [16]). Accordingly, the belief that Mr Kapla held are insufficient reason for a departure from the Cut-Off Time.

  57. [34] On quantum, applying the default Cut-Off Time of 12.01 am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, parties agree on the Permutation 2 figure of US$47,297.11. I award Mr Kapla that sum in damages for misrepresentation.

  58. Bridget Wilson Lynn

  59. [35] Ms Bridget Wilson Lynn (“Ms Lynn”) claims US$28,883.16 in damages. She purchased 28,606.70 UST on Binance between 16 February 2022 and 28 February 2022, depositing the UST into Anchor to earn yield. She relies on the First to Fifth Representations. She learnt of the depeg on reading Do Kwon’s tweets through secondary sources (such as YouTube) between or about 9 May 2022 to 12 May 2022. She did not sell any of her UST. However, she withdrew all her UST from the Anchor Protocol on 11 May 2022. Ms Lynn claims that she only lost faith in the representations on or around 13 May 2022 when the price of UST continued to fall and stay around ten cents on the dollar, despite the various announcements made by the defendants. She therefore seeks an extended Cut-Off Time of 13 May 2022, 12.01 am UTC.

  60. [36] On reliance, I accept Ms Lynn’s evidence that she accessed and read the pleaded sources of the First to Fourth Representations before purchasing UST, namely, the Terra White Paper, Terraform Website, Anchor White Paper and Anchor Website. I accept that she cannot exhibit contemporaneous evidence of such access because she accessed the documents through a laptop which she no longer has. The defendants do not dispute that Ms Lynn read the source documents.

  61. [37] The defendants challenge Ms Lynn’s reliance on the First to Third Representation because she admitted under cross-examination that “there’s always a risk to everything” and that “with any sort of stablecoin … it’s not inherently absolutely risk-free”. Further, she agreed that “the risk that [she] thought was involved was the risk that the UST might depeg”. I reject the defendants’ argument. That some risk exists in an investment, including UST, does not preclude reliance. I find that Ms Lynn subjectively understood the pleaded meanings of the First to Third Representations and had them in mind when she purchased UST. The defendants do not challenge Ms Lynn’s reliance on the Fourth Representation. The Fifth Representation is not actionable.

  62. [38] I apply the default Cut-Off Time of 12.01 am UTC on 12 May 2022. Ms Lynn’s primary case is that an extended Cut-Off Time of 1.00 pm UTC on 13 May 2022 should apply because that is the end of the 14-hour grace period from when she read Do Kwon’s tweets on 12 May 2022, 11 pm UTC. That, however, is inconsistent with her second witness statement where she stated that she started reading the tweets from 9 May 2022 at 11 pm UTC. Nevertheless, even accepting that she only read Do Kwon’s tweets on 12 May 2022, 11 pm UTC, this places her reading of those tweets well within the period before the default Cut-Off Time. The default Cut-Off Time of 12.01 am UTC on 12 May 2022 consequently applies.

  63. [39] I accept the defendants’ argument that Ms Lynn’s conduct on 11 May 2022 is inconsistent with her claimed continued reliance on the representations up till 13 May 2022. She withdrew all her UST from the Anchor Protocol on 11 May 2022, accepting in cross-examination that she did so to “reduce the steps” required to sell her UST in the event she chose to do so. She had at that point contemplated the possibility of selling. The conduct reflects the position of a person who ceased to believe in the representations.

  64. [40] On quantum, applying the default Cut-Off Time of 12.01 am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, parties agree on the Permutation 2 figure of US$10,640.69. I award Ms Lynn that amount as damages for misrepresentation.

  65. Jose Noe James Seva Biron

  66. [41] Mr Jose Noe James Seva Biron (“Mr Biron”) claims US$20,708.34 in damages. He purchased UST on KuCoin and Binance between 22 March 2022 and 23 April 2022, and staked the UST on the Anchor Protocol to earn yield. He says he relied on the First to the Sixth Representation in purchasing UST. He did not sell any of his UST. Mr Biron seeks an extended Cut-Off Time of 12 June 2022, 11.59 pm UTC, the date and time at which it finally became clear to him that the peg would not be restored.

  67. [42] On reliance, I accept Mr Biron’s evidence that he accessed and read the source documents of the First to Fourth and Sixth Representations before purchasing his UST. I accept that he was unable to retrieve his internet browsing history because it is his practice to clear his browsing history for privacy and storage management reasons.

  68. [43] The defendants challenge Mr Biron’s reliance on the representations on the ground that his evidence was contradictory. Mr Biron confirmed in cross-examination that his understanding was that UST was supposed to maintain a one-to-one peg with the US dollar. But he also stated that he understood UST to be capable of withstanding fluctuations of more than 50, 80, or even 90 per cent. The Defendants characterise this as incomprehensible and irreconcilable. I disagree. I instead accept the claimants’ argument that Mr Biron’s explanation was grounded in the Terra White Paper’s representation that the mechanism could withstand Bitcoin-level volatility (ie, the Second Representation). The apparent tension in his evidence dissolves once his reasoning is understood. He did not resile from his belief that one UST was worth US$1. His point was that the mechanism would always restore the peg. I accept that explanation.

  69. [44] The defendants place weight on the fact that Mr Biron waited almost a year after first reading the representations before purchasing UST, and that during that period he feared that the project might be a scam. They submit this shows his purchase was driven by confidence that the project would not disappear overnight, not by the representations themselves. I reject this submission. That Mr Biron was motivated by the confidence that the project was functional, sustained over a year, does not preclude reliance on the representations. The test is not whether the actionable representations were the sole or dominant cause of the decision to purchase. It suffices that a representation was in the claimant’s mind at the time of purchase and was among one’s reasons for acting. Mr Biron’s evidence was that “everything was part of the package” — the White Paper, the press releases, and his period of due diligence — and that the Representations, including the Sixth Representation concerning TFL’s US$1bn Bitcoin reserve, formed part of the considerations on which he acted. I therefore find that Mr Biron purchased his UST on reliance of the First to Fourth, and Sixth Representations. The Fifth Representation is not actionable.

  70. [45] I apply the default Cut-Off Time of 12.01 am UTC on 12 May 2022. Mr Biron’s case is that, despite reading Do Kwon’s tweets between 9 May 2022 UTC and 14 May 2022 UTC, he held on to the hope that the UST would eventually restore its peg on and after 12 May 2022. He says that such hope is illustrated by how he did not sell his UST at all, and only started withdrawing his UST from the Anchor Protocol on 23 May 2022. He eventually lost all hope on 12 June 2022, when he realised that the price of UST remained significantly below US$1, the Terra ecosystem had collapsed, and any sale would have resulted only in negligible recovery. These reasons are not sufficient to displace the default Cut-Off Time.

  71. [46] On quantum, applying the default Cut-Off Time of 12.01 am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, parties agree on the Permutation 2 figure of US$8,262.70. I award Mr Biron that amount in damages for misrepresentation.

  72. Yee Xin Jin, Joshua

  73. [47] Mr Yee Xin Jin, Joshua (“Mr Yee”) claims US$3,049.75 in damages. He purchased a total of 7,324.96 UST from 5 November 2021 to 8 April 2022 on Osmosis and Jupiter Aggregator. He staked the UST on the Anchor Protocol to earn yield. His case is that he relied on the First to Fifth Representations in purchasing UST. Mr Yee does not seek an extension of the default Cut-Off Time.

  74. [48] On reliance, I accept Mr Yee’s evidence that he accessed and read the source documents of the First to Fourth Representations before purchasing her UST. I accept his evidence that he cannot retrieve evidence of such access because he accessed them on an old laptop, from which he had deleted the browsing history of that period due to security and privacy concerns.

  75. [49] The defendants challenge Mr Yee’s reliance on the ground that Mr Yee’s own evidence reveals that he understood the UST peg to be maintained through an algorithm operating through market forces and such forces were not entirely within TFL’s control. Thus, he appreciated the risk involved in buying UST. However, the understanding that some risk exists in an investment does not preclude reliance. The submission is rejected.

  76. [50] As regards the Cut-Off Time, the defendants submit that Mr Yee’s conduct from 7 May 2022 onwards demonstrates that he had lost faith in the Representations before the default Cut-Off Time of 12.01 am UTC on 12 May 2022. On 11 May 2022, Mr Yee had not only withdrawn UST from the Anchor Protocol, but also started to sell some UST. Mr Yee sold about 186.12 UST on 11 May 2022 and a larger amount of 1772.34 UST on 12 May 2022. In the Second Tranche Judgment, I brought forward the Cut-Off Time in situations where a claimant sold most of his or her UST holdings before 12 May 2022, because such conduct evinced that faith in the representations had been lost before the default Cut-Off Time (see for instance, Second Tranche Judgment at [118]). I decline to adopt that approach here. While the defendants are correct that Mr Yee made some sales on 11 May 2022, those sales are well short of a significant portion of his holdings. I am not satisfied that Mr Yee had lost faith in the Representations before the default Cut-Off Time. I apply the default Cut-Off Time of 12.01 am UTC on 12 May 2022 to Mr Yee.

  77. [51] On quantum, applying the default Cut-Off Time of 12.01 am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, parties agree on the Permutation 2 figure of US$3,049.75. I award Mr Yee that amount as damages for misrepresentation.

  78. Mr Sakai

  79. [52] Mr Sakai claims US$25,056.80 in damages. He purchased 24,991.96 UST on Stablegains and KuCoin between 31 March 2022 and 21 April 2022. He staked his UST on the Anchor Protocol to earn yield. He says he relied on the First to Fifth Representations in purchasing and holding UST. Mr Sakai’s primary case is that he lost faith in the representations by 13 May 2022 UTC, when he realised that the price of UST kept falling without any effective recovery plan being implemented and there were substantial withdrawals of UST from the Anchor Protocol. Mr Sakai thus seeks an extended Cut-Off Time of 13 May 2022, 11.59 pm UTC.

  80. [53] On reliance, I accept Mr Sakai’s evidence that he accessed and read the source documents of the First to Fourth Representations before purchasing his UST. I accept his evidence that he was unable to retrieve his internet browsing history for that period because his web browser settings were set to automatically delete his browsing history after three months. The defendants argue that Mr Sakai’s evidence on when he accessed the Terraform Website and Terra White Paper constantly shifted during cross-examination. I reject this contention. I find it both unrealistic to expect claimants to recall the precise chronology of events and their transactions in the circumstances of this case (see above [20]).

  81. [54] The defendants challenge Mr Sakai’s reliance on the First to Fourth Representations because he conceded under cross-examinations that there was “risk in UST, that its ability to hold the peg was subject to market forces and hence not always fully within TFL’s control”. But the understanding that risk exists in any investment does not preclude reliance. This submission is rejected.

  82. [55] On Cut-Off Time, the defendants advance several grounds for bringing forward the cut-off to 10 May 2022 at 12.01 am UTC. First, they submit that the articles Mr Sakai read from The Block and CoinDesk which were used to reinforce his belief in the representations, must have revealed to him that that the stability mechanism was failing and that external intervention had become necessary. Second, Mr Sakai’s withdrawal of all 17,153.83 UST from the Anchor Protocol on 11 May 2022 is probative of a loss of faith in the Representations, given his own concession under cross-examination that substantial withdrawals by other investors suggested that those investors were losing faith in the system’s ability to maintain the peg. Third, they rely on Mr Sakai’s tweet at the end of 12 May 2022 UTC, in which he expressed that any recovery would require something akin to a “miracle”, as contemporaneous evidence that he recognised the mechanism was no longer operating as represented and any recovery would be extraordinary.

  83. [56] I do not accept these arguments. As regards the articles, Mr Sakai’s evidence was that, despite the articles, he continued to believe that the defendants would deploy their reserves to restore the peg, and that the algorithm would ultimately do its job. I accept this explanation. As for his withdrawal from the Anchor Protocol, Mr Sakai explained that this was driven by volatility in the Anchor Protocol itself, and that he still had faith at that time in the algorithm’s ability to repeg UST. Crucially, and notwithstanding all that he had read and observed, Mr Sakai made the independent decision not to sell his UST. That decision is telling. A claimant who had lost faith in the Representations before the default Cut-Off Time would have had every reason to sell by then. The fact that Mr Sakai did not do so is consistent with his evidence that he continued to hold out hope that the mechanism would restore the peg.

  84. [57] I turn to Mr Sakai’s tweet. The defendants characterise Mr Sakai’s reference to “praying for a miracle” as an acknowledgement that the mechanism was “dead in the water” and any recovery would be extraordinary. I reject it. I accept Mr Sakai’s explanation that the phrase reflected a hope that the balancing mechanism would still kick in, rather than an acknowledgement that it had irretrievably failed.

  85. [58] Nevertheless, it would have been clear that by 12 May 2022 at 12.01 am UTC, the Conceded Representations ceased to have any operative content capable of being relied upon (see above [16]). Therefore, I am not satisfied that the default Cut-Off Time should be displaced in Mr Sakai’s situation.

  86. [59] On quantum, applying the default Cut-Off Time of 12.01 am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, the parties agree on the Permutation 2 figure of US$10,024.33. I award Mr Sakai that amount in damages for misrepresentation.

  87. Mr Tan Ming Kai Justin

  88. [60] Mr Tan Ming Kai (“Mr Justin Tan”) claims damages of US$20,893.30. He purchased 28,363.50 UST on KuCoin, FTX and Terra Station between 29 August 2021 and 2 May 2022. He staked the UST on the Anchor Protocol to earn yield. He says he relied on the First to Sixth Representations in purchasing and holding UST. Mr Justin Tan’s primary case is that he only lost faith in the representations by 13 May 2022, as the price of UST reversed and continued to tumble drastically and there was little to no communication from the UST team regarding their plans or concrete updates during this critical period. He seeks an extended Cut-Off Time of 13 May 2022, 11.59pm UTC.

  89. [61] A difficulty is, as the defendants point out, that Mr Justin Tan confirmed in cross-examination that he “obtained the representations through the Terra [W]hite [P]aper alone, not the Terra [W]ebsite, nothing else, just the Terra [W]hite [P]aper”. The defendants submit that Mr Justin Tan could not therefore have derived the entire meaning of the First to Third Representations. This is because the pleaded source for the Third Representation is the Terraform Website, specifically the “About the Terra Protocol” section: First Tranche Judgment at [148]–[149]. As I held in the First Tranche Judgment, a claimant cannot establish reliance on the Third Representation by reference to the Terra White Paper alone. In light of his concession, I therefore find that Mr Justin Tan’s reliance on the Third Representation is not established. However, I accept Mr Justin Tan’s evidence that he accessed and read the source documents of the First, Second, Fourth and Sixth Representations. The Fifth Representation is not actionable.

  90. [62] The defendants challenge Mr Justin Tan’s reliance on the representations on the ground that he agreed that “UST would be stable in normal market conditions, but when market conditions are severe, there would be a risk that the peg cannot hold”. The understanding that risk exists in any investment does not rule out reliance. This submission is rejected. I find that Mr Justin Tan relied on the First, Second, Fourth and Sixth Representations in purchasing and holding UST.

  91. [63] As for the Cut-Off Time, the defendants submit that Mr Justin Tan’s contemporaneous messages with a Mr Barredy on 10 May 2022 reveal that he had by then lost faith in the representations. They rely on several features of those messages. First, Mr Justin Tan told Mr Barredy on 10 May 2022 that the fact that the UST had depegged was “[d]amn jialat [that is, a bad situation]” and that he was “[w]aiting for them to deploy [Bitcoin] reserves”. They submit that Mr Justin Tan’s messages show that he knew UST and LUNA were in serious trouble, and that he was pinning his hopes on the deployment of Bitcoin reserves rather than on the UST algorithm. They argue that is inconsistent with continued reliance on the Representations. Second, Mr Justin Tan stated that “idk [I don’t know] if it’ll be enough” in relation to the deployment of the Bitcoin reserves. Third, the defendants rely on his use of the phrase “Gg” (“good game”), upon noting that the UST had gone down to the price of US$0.77 on 10 May 2022. They suggest that is a contemporaneous recognition that UST’s pegged stability was over. Fourth, they submit that Mr Justin Tan’s withdrawal of all his UST from the Anchor Protocol on 10 May 2022 is further evidence of a loss of faith. Finally, the defendants submit that Mr Justin Tan’s attempts to reframe his messages during cross-examination were unconvincing. He let slip his true state of mind on several occasions — most notably when (1) he described himself as “distressed” as of 10 to 11 May 2022 before quickly correcting himself and (2) he unguardedly explained his withdrawal from Anchor as occurring “when something doesn’t work the way it’s supposed to work.”

  92. [64] I do not accept that Mr Justin Tan’s messages to Mr Barredy show that he lost faith in the representations by 10 or 11 May 2022. I instead accept the general tenor of Mr Justin Tan’s evidence that he believed both the algorithm and the BTC reserves were required to work in concert to restore the peg. As with Mr Sakai, Mr Justin Tan decided not to sell his UST before 12 May 2022. That decision is consistent with his evidence that he continued to hold out hope that the peg would be restored. A claimant who genuinely lost faith in the representations would have had every reason to sell. Mr Justin Tan did not. I therefore apply the default Cut-Off Time of 12.01am UTC on 12 May 2022 to Mr Tan. By that time, having observed UST’s sustained failure to re-peg and read the relevant communications during that period, Mr Tan would have recognised that as a matter of fact the Conceded Representations were false.

  93. [65] On quantum, applying the default Cut-Off Time of 12.01am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, parties agree on the Permutation 2 figure of US$7,354.81. I award Mr Justin Tan that amount in damages for misrepresentation.

  94. Mr David Micah Brooks-Smith

  95. [66] Mr David Micah Brooks-Smith (“Mr Brooks-Smith”) claims damages of US$15,887.84. Mr Brooks-Smith purchased 19,542.18 UST on Kucoin between 20 December 2021 and 3 January 2022. He staked his UST on the Anchor Protocol to earn yield. He says he relied on the First to Sixth Representations in purchasing and holding UST. Mr Brook-Smith says that, although he began un-staking his UST on the Anchor Protocol and transferred them onto FTX on 12 May 2022 UTC, he did so as a precautionary measure and did not sell his UST then. He was unable to make a considered decision to sell his UST because he was at work on 12 May 2022 itself. He only eventually lost faith in the representations by 13 May 2022, 12.58am UTC, when he realised that the peg was not going to recover and made his first sale. On this basis, Mr Brooks-Smith seeks an extended Cut-Off Time of 13 May 2022, 12.58am UTC.

  96. [67] On reliance, I accept Mr Brooks-Smith’s evidence that he accessed and read the source documents of the First to Fourth, and Sixth Representations before purchasing his UST. I accept his evidence that he was not able retrieve his internet browsing history because his browser settings are configured to automatically purge browsing data older than three months. I find that Mr Brooks-Smith relied on the First to Fourth, and Sixth Representations in purchasing and holding UST. The Fifth Representation is not actionable.

  97. [68] The defendants’ challenge to Mr Brooks-Smith’s reliance is grounded on his concession in cross-examination that there was “minimal risk of there being volatility in terms of the peg”. Brooks-Smith thus recognised that there was risk involved in investing in UST, albeit minimal. However, the understanding that some risk exists in any investment does not preclude reliance. I reject the challenge.

  98. [69] On the Cut-Off Time, the defendants point out that Mr Brooks-Smith learnt of the depeg on 11 May 2022 UTC, when he recognised that there had been a 23% deviation from the peg. This was “precisely the kind of volatility that UST’s algorithm was supposed to shield him from”. They also point to Mr Brooks-Smith’s conduct of unstaking his UST from the Anchor Protocol in the morning of 12 May 2022, noting that the fact that he took precautionary steps shows that he was contemplating selling or exiting his UST position. It follows that, by then, he was no longer relying on the representations. I do not accept these submissions. Even though he was cognisant of the depeg, and had begun unstaking his UST from the Anchor Protocol before the default Cut-Off Time, Mr Brooks-Smith did not decide to sell his UST. A claimant who had genuinely lost faith in the representations would have had every reason to sell.

  99. [70] The question is whether the Cut-Off Time should be extended beyond the default Cut-Off Time, on account of the fact that he had been working throughout the day before, and could not make a considered decision on whether to sell his UST until 13 May 2022, 12.58am UTC. I decline to extend the applicable Cut-Off Time. As I held in the Second Tranche Judgment at [57], personal difficulties, whether family-related, work-related or otherwise, do not without more justify an extension. Thus, I apply the default Cut-Off Time of 12.01am UTC on 12 May 2022.

  100. [71] On quantum, applying the default Cut-Off Time of 12.01am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, the parties agree on the Permutation 2 figure of US$6,856.72. I award Mr Brooks-Smith that amount as damages.

  101. Mr Oleksandr Mihajlovic Parkhomovskyy

  102. [72] Mr Oleksandr Mihajlovic Parkhomovskyy (“Mr Parkhomovskyy”) claims damages of US$18,317.42. He purchased 18,389.11 UST on KuCoin and Kraken from 4 January 2022 to 4 May 2022. He staked his UST on the Anchor Protocol to earn yield. He says he relied on the First to Fifth Representations in purchasing and holding UST. Mr Parkhomovskyy’s claims that he only lost faith in the representations by or around 10 June 2022, as the anticipated restoration of the peg did not occur and the measures discussed or implemented did not lead to a meaningful or sustained recovery. In any event, he could not have sold his UST before 14 May 2022 since he was in The Hague assisting at an exhibition for his university, without the hardware wallets which he needed to sell his UST. He only regained access upon returning home at 2.00am UTC on 14 May 2022. Mr Parkhomovskyy also claims for aggravated damages on the basis of severe depression, which affected his relationship with his son.

  103. [73] On reliance, I accept Mr Parkhomovskyy’s evidence that he had accessed and read the source documents of the First to Fourth Representations before purchasing his UST. I accept his evidence that he was unable to retrieve evidence of such access because he does not save his browsing history. The defendants have no quarrel with whether Mr Parkhomovskyy relied on the representations in purchasing UST. I find that Mr Parkhomovskyy relied on the First to Fourth Representations in purchasing and holding UST. The Fifth Representation is not actionable.

  104. [74] On the Cut-Off Time, however, the defendants advance two arguments. The first concerns Mr Parkhomovskyy’s recognition in cross-examination that the UST deviated from its peg. They submit that he understood the representations to mean that UST would not deviate from its peg by even “one to two per cent”, and that by 9 May 2022 he was aware of a deviation of approximately six per cent, which he himself acknowledged was not in line with his understanding of how UST was supposed to behave. They further submit that, by 11 May 2022, he was aware that UST had been behaving “completely out of line” with his understanding, and UST had failed to recover its peg over 10 and 11 May 2022. He accepted that this state of affairs was inconsistent, at least in part, with his understanding of the representations. The second line of argument concerns Mr Parkhomovskyy’s claim that he was unable to sell his UST between 10 and 14 May 2022 because he had travelled to The Hague for an exhibition and had left his hardware wallet key in Germany. The defendants submit that this claim rests on a bare assertion, that no objective evidence of the exhibition was produced and that, in any event, having been aware of the developing depeg while in The Hague, Mr Parkhomovsky cannot justify placing himself in a position where he had no ability to act.

  105. [75] I reject the defendants’ first argument. Instead, I accept that it was Mr Parkhomovskyy’s understanding that, despite the deviations, the UST would eventually recover to its peg. This belief was grounded by his knowledge of the May 2021 depeg. I do not find that Mr Parkhomovsky had lost faith in the Representations before the default Cut-Off Time on the sole basis that he recognised that UST depegged.

  106. [76] On whether the Cut-Off Time should be extended beyond the default of 12.01am UTC on 12 May 2022, as explained in the Second Tranche Judgment (see above at [10]), an extension may be warranted where a claimant was prevented from learning of the depeg by the Cut-Off Time, or where external forces beyond their control prevented them from liquidating their holdings despite their best efforts. Mr Parkhomovsky adduced bus and train tickets confirming that he arrived in The Hague on 10 May 2022 and departed on 14 May 2022. I accept that evidence. The defendants’ suggestion that leaving his hardware wallet key in Germany was a blameworthy decision was not made out on the evidence. It was not a deliberate decision by Mr Parkhomovskyy. I accept that it was his usual practice. I am satisfied that he was prevented by circumstances beyond his control from liquidating his holdings between 10 and 14 May 2022.

  107. [77] I therefore extend the Cut-Off Time for Mr Parkhomovskyy to 2.00am UTC on 14 May 2022, by which time he had returned and could reasonably have been expected to access his holdings and act upon the information available to him. I see no reason to accept an extension to 10 June 2022.

  108. [78] On aggravated damages, while it is regrettable that Mr Parkhomovskyy’s relationships suffered as a result of these events, I do not accept that his evidence of severe depression is credible and sufficient to establish, on the balance of probabilities, that he suffered the requisite intangible loss. This is because it is not entirely clear whether the loss of his UST holdings had worsened his mental state.

  109. [79] On quantum, applying an extended Cut-Off Time of 2.00am UTC on 14 May 2022, the Cut-Off Price was US$0.14045, as reflected on CoinMarketCap. I accordingly accept the claimants’ figure of US$15,580.36 in damages. I award Mr Parkhomovskyy that amount as damages for misrepresentation.

  110. Mr Hassan

  111. [80] Mr Hassan claims damages of US$21,585.61. He purchased 53,583.00 UST between 15 March and 10 May 2022. Mr Hassan claims he relied on the First to Sixth Representations. On 13 May 2022, Mr Hassan bought a further 9,000 UST, claiming he relied on the First to Seventh Representations. Mr Hassan alleges that he only lost faith in the representations in the afternoon of 13 May 2022, after realising that UST’s price continued to fall sharply. He sold almost all of his UST in the afternoon of 13 May 2022 UTC.

  112. [81] Mr Hassan’s claim is complicated by the fact that, of the UST purchased between 15 March and 10 May 2022, he sold a substantial portion prior to the Cut-Off Time:

  113. (a) On 7 May 2022, the price of UST began to fall below 1 USD.

  114. (b) On 8 May 2022, he sold approximately 2,500.00 UST on FTX.

  115. (c) On 9 May 2022, he sold approximately 2,674.00 UST on FTX.

  116. (d) On 10 May 2022, he sold approximately 6,002.00 UST on FTX at 11.15pm UTC, and a further approximately 4,000.00 UST on FTX at 11.25pm UTC.

  117. (e) On 11 May 2022, he sold approximately 5,000.00 UST on FTX at around 8.53am UTC.

  118. [82] On reliance, I first consider the UST purchased between 15 March and 10 May 2022. The defendants first argue that Mr Hassan’s evidence on accessing and reading the source documents of the representations constantly shifted. They say that Mr Hassan’s claimed date of accessing the Terraform Website and Terra White Paper on or around 10 March 2022 is an unsupported reconstruction, working backwards from his first UST purchase on 15 March 2022. It is not a recollection anchored in an objective record. They submit that his explanations for the absence of browsing history and the failure to preserve access records are speculative and inconsistent, and the same difficulties attend his alleged access to the Anchor White Paper. I reject this first challenge. Taking account of the practical realities that confronted the claimants, I accept that Mr Hassan relied on the First to Sixth Representations in purchasing and holding his UST from 15 March to 10 May 2022. Second, the defendants argue that Mr Hassan appreciated the risks of trading UST, as evinced by his cross-examination. I reject this submission. Understanding that some risk is involved does not preclude reliance.

  119. [83] As for the UST purchased after 10 May 2022, whether such purchases fall within the recoverable period depends on when Mr Hassan lost faith in the representations. The claimants contend that Mr Hassan only lost faith on 13 May 2022 at 12.29pm UTC. That would bring his purchases on that date within the recoverable period. I cannot accept that position. By 12.01am UTC on 12 May 2022, the Conceded Representations were plainly false and ceased to have meaningful content capable of sustaining reliance. Unless a claimant was entirely unaware of the depeg, no purchase made after that time can be said to have been made in reliance on the Representations (see above [16]). Mr Hassan was aware of the depeg at the time when it was happening. I therefore disregard the purchases Mr Hassan made after 12 May 2022, 12.01am UTC.

  120. [84] The next question is whether the default Cut-Off Time should apply to Mr Hassan, or should the Cut-Off Time be brought forward. I find that Mr Hassan lost faith in the representations on 11 May 2022. From the start of the depeg on 7 to 11 May 2022 at 8.53am, Mr Hassan sold 20,176.00 UST (2,500 + 2,674 + 6,002 + 4,000 + 5,000) out of 53,583.00 UST. This was a substantial amount of UST. I do not consider this to be conduct consistent with a continued belief in the representations. Therefore, the default Cut-Off Time should be moved forward.

  121. [85] On quantum, I first tabulate the amount Mr Hassan obtained from selling 20,176.00 UST between 7 and 11 May 2022:

  122. Date

  123. Quantity

  124. Amount (US$)

  125. [8] May 2022

  126. 2,500.00

  127. 2,482.25

  128. [9] May 2022

  129. 2,674.00

  130. 2,620.25

  131. [10] May 2022

  132. 6,002.00

  133. 4,575.92

  134. [11] May 2022

  135. 4,000.00

  136. 3,176.00

  137. [11] May 2022

  138. 5,000.00

  139. 2,539.50

  140. Total

  141. 20,176.00

  142. 15,393.92

  143. Next, I tabulate the total amount of UST purchased by Mr Hassan from 15 March to 10 May 2022.

  144. Date

  145. Quantity

  146. Amount (US$)

  147. [15] March 2022

  148. 20,795.00

  149. 20,884.42

  150. [4] April 2022

  151. 16,359.00

  152. 16,368.82

  153. [21] April 2022

  154. 9,609.00

  155. 9,637.83

  156. [26] April 2022

  157. 6,810.00

  158. 6,814.09

  159. [10] May 2022

  160. 10.00

  161. 9.08

  162. 53,583.00

  163. 53,714.24

  164. [86] Mr Hassan’s total eligible UST is 54,525.12 UST, comprising 53,583.00 UST purchased for a total of US$53,714.24 from 15 March to 10 May 2022, and 942.12 UST earned as yield. He sold 20,176.00, obtaining US$15,393.92. The residual balance of 34,349.12 UST is treated as notionally sold at the time at which he lost faith in the representations, being 11 May 2022. The average price of UST on 11 May 2022 was US$0.80025. Thus, the notional sale value of the remaining UST sold on 11 May 2022 is approximately US$27,487.88. The total amount recoverable is US$53,714.24 less US$15,393.92 and US$27,487.88, giving a rounded figure of US$10,832.44. I award Mr Hassan that amount in damages.

  165. Mr Thomas Yuan Fang

  166. [87] Mr Thomas Yuan Fang (“Mr Fang”) claims damages of US$293,760.47. From 6 February to 10 May 2022, Mr Fang purchased 661,720.06 UST on ChangeNOW.io, Terra Station, Wormhole (Solana), and Beethoven X, staking them in the Anchor Protocol. He claims to have relied on the First to Sixth Representation in purchasing his UST from 6 February to 10 May 2022, and on the First to Seventh Representation in purchasing a further 38,672.79 UST on 10 May 2022. Mr Fang’s primary case is that he only lost faith in the representations on 13 May 2022, as the price continued to fall and, to the best of his knowledge, Do Kwon did not announce any recovery plan. He seeks an extended Cut-Off Time of 13 May 2022, 8.34pm UTC, the time of Mr Fang’s first sale after he lost faith in the Representations.

  167. [88] On reliance, I accept Mr Fang’s evidence that he accessed and read the source documents of the First to Fourth, and Sixth Representations before purchasing his UST. I accept his evidence that he was unable to retrieve evidence of that access because he conducts his cryptocurrency activity in incognito mode using the Brave browser for privacy reasons, and because he is concerned about being scammed.

  168. [89] The defendants challenge Mr Fang’s reliance because Mr Fang admitted in cross-examination that he relied on the team behind UST rather than the representations. The defendants note that, when Mr Fang was questioned whether it bothered him that he did not understand how precisely the algorithm worked, his response was that he “relied on the people behind the project…[he] went to school with Daniel Shin” (the co-founder of TFL). I reject the defendants’ submission. Mr Fang’s point was not that he solely reposed faith on the team behind UST, but that his reliance was on the publications put out by the team, which he read and understood. Since we are dealing here with fraudulent misrepresentation, it is sufficient that the publications were a cause, not necessarily the dominant cause. The fact that he knew one of TFL’s co-founders does not detract from Mr. Fang’s reliance on the pleaded source documents. What matters is whether Mr Fang understood the pleaded meaning of the representations and acted in reliance upon them. I am satisfied that he did.

  169. [90] The defendants additionally challenge Mr Fang’s reliance on the grounds that, in relation to investing in UST, he conceded under cross-examination that “everything has a risk”. I reject this submission. An understanding that investing in UST carries a financial risk does not rule out reliance.

  170. [91] On the Cut-Off Time, the defendants rely on two concessions made by Mr Fang in cross-examination. First, by 11 May 2022, Mr. Fang appreciated that recovery was not certain and that there might be plans for restitution. Second, Mr. Fang accepted that the possibility of restitution was separate from the representations. The defendants submit that the fact that Mr Fang was contemplating the possibility of restitution plans signals that he had by then recognised that the representations were not holding up. Had they been operating as he understood they should, there would have been no need for restitution. The defendants submit that his conduct, in withdrawing UST from the Anchor Protocol from 9 May 2022 and making a series of withdrawals and unexplained deposits on 10, 11, and 12 May 2022, was inconsistent with continued reliance on the representations and reflected someone who was uncertain and repositioning.

  171. [92] I reject these submissions. Mr Fang’s evidence was that, despite being wary of the depeg and hopeful that there would be a plan for restitution, he still considered that the price of UST would revert back to its peg. This was consistent with Mr Fang’s decision not to sell his UST before 13 May 2022. Mr Fang did not sell, despite withdrawing his UST from the Anchor Protocol. I therefore apply the default Cut-Off Time of 12.01am UTC on 12 May 2022.

  172. [93] On quantum, applying the default Cut-Off Time of 12.01am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, parties agree on the Permutation 2 figure of US$157,186.90. I award Mr Fang that amount as damages for misrepresentation.

  173. Mr Derrick

  174. [94] Mr Derrick claims US$6,471.20 in damages. He purchased 6,571.63 UST on KuCoin between 9 November 2021 and 1 April 2022, staking them on the Anchor Protocol. He says that he relied on the Fourth and Fifth Representations to purchase his UST. Mr Derrick claims that he only lost faith in the representations on 1 June 2022 because he believed that the peg would recover due to a combination of the Terra Protocol’s algorithmic stability mechanism, Do Kwon’s assurances that capital would be deployed in a rescue plan for UST, and UST’s brief price recoveries between 10 and 11 May 2022. He regarded the recoveries as evidence that the algorithm was working. He seeks an extended Cut-Off Time of 1 June 2022, 4.06am UTC, the time of his first sale on 1 June 2022 after he lost faith in the Fourth and Fifth Representations.

  175. [95] On reliance, I accept Mr Derrick’s evidence that he accessed and read the source documents of the Fourth Representation before purchasing his UST. I accept his evidence that he was unable to retrieve evidence of such access because he regularly deletes his browsing history and the Anchor White Paper was also sent to him by a former colleague. I am satisfied that reliance on the Fourth Representation is established. The Fifth Representation is not actionable.

  176. [96] The defendants argue that the Fourth Representation alone is insufficient to entitle claimants to damages, because the Anchor White Paper says nothing about how UST would be valued against the US dollar or how its peg would be maintained. As explained, I reject this argument (see above [27]).

  177. [97] On Cut-Off Time, the defendants submit that Mr Derrick lost faith in the representations as early as 9 or 10 May 2022. The defendants point to Mr Derrick’s concessions under cross-examination that he first learned of the depeg on 9 or 10 May 2022, and that his continued holding of UST after the depeg had “really nothing to do with any representations that he relied on”. I reject this challenge. To be actionable, fraudulent misrepresentations need not be the dominant cause of claimants’ decision to hold onto UST. Mr Derrick’s reasons, however, are not sufficient to displace the default Cut-Off Time. In my view, Mr Derrick, having learned of the depeg on 9 or 10 May 2022, having read Do Kwon’s tweets between 10 and 11 May 2022 UTC, and having observed UST’s failure to re-peg from 7 to 11 May 2022, must have recognised by 12.01am UTC on 12 May 2022 that the Conceded Representations were false. The peg did not always hold. Thus, I apply the default Cut-Off Time.

  178. [98] On quantum, applying the default Cut-Off Time of 12.01am UTC on 12 May 2022 and the Cut-Off Price of US$0.60485, parties agree on the Permutation 2 figure of US$2,229.58. I award Mr Derrick that amount as damages for misrepresentation.

  179. Mr Ng Wei Jie Kester

  180. [99] Mr Ng Wei Jie Kester (“Mr Kester”) claims US$22,877.36 in damages. He purchased 41,329.54 UST on KuCoin between 30 November 2021 and 26 May 2022, staking them in the Anchor Protocol. He says that he relied on the First to Sixth Representations. Mr Kester’s case is that he lost faith in the representations on 26 May 2022 because he believed in Terra Protocol’s stability mechanism and Do Kwon’s statements that TFL would deploy the reserve fund as part of a rescue plan. He was aware of the previous instances where UST depegged but eventually re-stabilised. He seeks an extended Cut-Off Time of 26 May 2022, 11.59am UTC, the end of the day in which he discovered that the representations were false.

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