Case Details
- Citation: [2025] SGHC(I) 17
- Court: Singapore International Commercial Court (SICC)
- Originating Application: Originating Application No 3 of 2024
- Summons: Originating Application No 3 of 2024 (Summons No 37 of 2025)
- Judgment Date: 7 July 2025
- Judge: Anselmo Reyes IJ
- Hearing Dates: 13–16, 20–22, 27, 29–30 May, 17 June 2025
- Judgment Reserved: Judgment reserved (after 17 June 2025)
- Parties (Claim): Julian Moreno Beltran & 9 Ors (Representative Claimants)
- Parties (Defence): Terraform Labs Pte Ltd & 2 Ors (Defendants)
- Counterclaim: Counterclaim of 1st Defendant (Terraform Labs Pte Ltd)
- Parties (Counterclaim): Julian Moreno Beltran & 9 Ors (Representative Defendants in Counterclaim)
- Legal Areas: Contract; Misrepresentation (fraudulent, negligent, innocent); Tort (fraud and deceit); Damages; Unilateral contract; Conspiracy; Inducement of breach of contract
- Procedural Framework: Brought under O 10 r 19 of the Singapore International Commercial Court Rules 2021 (SICCR 2021)
- Representative Scope: Ten representative claimants representing 356 other claimants
- Judgment Length: 107 pages; 33,522 words
- Key Context: Claims arising from the Terra-Luna crash of 7 May 2022
- Crypto Assets Involved: UST (algorithmic stablecoin), LUNA (sister token), Anchor Protocol (lending/borrowing platform)
- Core Allegations: Breach of unilateral contract; misrepresentation; inducing breach of contract; unlawful means conspiracy
- Number of Alleged Representations: Seven representations pleaded by claimants
- Counterclaim Relief Sought: Declaration that claimants are bound by terms and conditions hyperlinked on Terraform’s websites
- Prior Related Decision (mentioned): Beltran (Arbitration Stay) [2024] 4 SLR 674
Summary
In Beltran, Julian Moreno & others v Terraform Labs Pte Ltd & others ([2025] SGHC(I) 17), the Singapore International Commercial Court (SICC) determined a large-scale representative action arising from the Terra-Luna collapse in May 2022. Ten representative claimants, each representing a class of 356 other claimants, sued Terraform and related defendants for, among other causes of action, fraudulent misrepresentation, negligent and innocent misrepresentation, breach of unilateral contract, inducement of breach of contract, and unlawful means conspiracy. The claimants alleged that they purchased or retained UST tokens in reliance on seven pleaded representations about the Terra ecosystem’s stability and functioning.
The court’s central findings were that five of the seven pleaded representations were actionable as fraudulent misrepresentations that induced some representative claimants to purchase UST in reliance. The remaining two representations were not actionable. The court further held that no unilateral contracts were formed between the defendants and any representative claimant. On damages, the court assessed compensation on a reliance basis (rather than an expectation basis), and it dismissed the claims for inducement of breach of contract and unlawful means conspiracy. The court also allowed Terraform’s counterclaim to the extent specified in the judgment, granting declaratory relief binding the claimants to relevant website terms and conditions.
What Were the Facts of This Case?
The dispute arose out of the Terra-Luna crash of 7 May 2022, a widely reported event in the cryptocurrency market. TerraUSD (“UST”) was an algorithmic “stablecoin” intended to maintain a one-to-one exchange rate with the US dollar (“USD”). According to the claimants, UST lost its peg and its exchange rate fell sharply against the USD, causing substantial economic losses to those who held UST tokens. The representative claimants were individuals based in different jurisdictions who held UST tokens at the time of the crash and alleged that they were induced to acquire or keep UST by misstatements made by the defendants.
At the heart of the factual matrix was the “Terra ecosystem”, which the court described as a decentralised network comprising the Terra blockchain protocol, UST, associated tokens, and platforms. Two key components were (1) UST itself and (2) LUNA, a sister cryptocurrency not pegged to fiat currency. LUNA was intended to support UST’s peg through an arbitrage mechanism: when UST deviated from its intended USD parity, the protocol’s design would incentivise arbitrageurs to exploit price disparities, using exchanges between UST and LUNA within the Terra protocol’s market module.
The court also addressed the Anchor Protocol (“Anchor”), a lending and borrowing platform within the Terra ecosystem. Users could deposit or “stake” UST on Anchor, receiving “aUST” in return. The aUST token represented a right to a proportionate share of the pool of USTs deposited on Anchor at any time. Evidence described aUST as functioning “almost like an IOU”, reflecting the claimants’ understanding that staking UST on Anchor would entitle them to a share of UST pool value.
Against this background, the claimants pleaded seven representations said to have been made by the defendants concerning the functioning of UST, LUNA, and Anchor. These representations were said to be found in materials such as the Terra White Paper and other communications accessible through Terraform’s website and related publications. The representative claimants’ case was that they relied on these representations when purchasing or retaining UST tokens, and that the representations were false in a manner that supported claims in misrepresentation and related tort and contract theories. The defendants, for their part, denied liability and also counterclaimed for a declaration that the claimants were bound by terms and conditions hyperlinked on Terraform’s websites.
What Were the Key Legal Issues?
The court identified several interlocking legal issues. First, it had to determine which of the seven pleaded representations were actionable. This required the court to construe the representations properly and to assess whether they constituted false statements of present fact (or otherwise actionable misrepresentations), and whether they were made fraudulently such that they could found claims in fraud and deceit, as well as negligent and innocent misrepresentation.
Second, the court had to address reliance and causation: even where a representation was actionable, the court needed to determine whether it materially induced the representative claimants to transact in reliance on the misrepresentation. This included the application of principles on the measure of damages and mitigation, particularly where the claim is framed in tort for fraud and deceit.
Third, the court had to decide whether the claimants could establish unilateral contracts. The claimants argued that certain communications amounted to unilateral contractual offers addressed to the world at large, such that acceptance occurred when claimants purchased or retained UST. The court also had to consider whether other communications (including a press release and social media communications) were contractual offers at all. Finally, the court had to determine whether the claims for inducement of breach of contract and unlawful means conspiracy were made out on the evidence and legal requirements.
How Did the Court Analyse the Issues?
The court’s analysis began with the disputed representations. It examined the evidence and submissions concerning each of the seven representations and concluded that only five were actionable as fraudulent misrepresentations. The court’s approach reflected the need to interpret the representations as a whole, in context, and to determine whether they were properly characterised as actionable false representations rather than non-actionable statements of opinion, marketing puffery, or statements that did not amount to a representation of a present fact. The court also considered whether the representations were made in a manner that satisfied the mental element required for fraud, and whether they were causally connected to the claimants’ decision to purchase UST.
In contrast, the court held that the fifth and seventh representations were not actionable. While the truncated extract does not reproduce the full reasoning for each representation, the structure of the judgment indicates that the court treated actionability as a threshold question for each pleaded statement. This required the court to decide whether each representation could be relied upon as a basis for misrepresentation liability, and whether it met the legal requirements for fraud and deceit (and, where relevant, negligent or innocent misrepresentation). The court’s conclusion that two representations were not actionable demonstrates a careful filtering process rather than an “all-or-nothing” approach.
Having identified the actionable representations, the court then addressed the conceded representations. The judgment indicates that some representations were conceded (at least in part) and that the court applied general principles on reliance and causation. The court considered the parties’ positions on how reliance should be proved in a representative action, and how causation should be assessed where different claimants relied on different combinations of representations. The court’s reasoning emphasised that reliance must be established for each representative claimant’s class, and that the misrepresentation must be a cause materially inducing the representee into transacting.
On damages, the court adopted a reliance-based measure for successful representative claimants. This is significant because reliance damages aim to put the claimant in the position they would have been in had they not relied on the misrepresentation, rather than awarding the benefit of the bargain (expectation damages). The court also applied the rule that a representee must reasonably mitigate damage flowing from fraudulent misrepresentation. In practical terms, this meant that even where fraud was established, the court would not award losses that could reasonably have been avoided after the fraud was (or should have been) discovered, or where the claimant’s subsequent conduct broke the chain of recoverable loss.
Finally, the court addressed the unilateral contract theory and related inducement and conspiracy claims. It held that the Terra and Anchor representations were not contractual offers, and that the LFG press release and “return to form” tweet were not contractual offers either. This analysis turned on contract formation principles: a unilateral contract requires an offer capable of acceptance by performance, and the court concluded that the relevant statements did not meet that standard. The court also dismissed the claims for inducement of breach of contract and unlawful means conspiracy, indicating that the evidential and legal thresholds for those tortious and equitable wrongs were not satisfied.
What Was the Outcome?
The court allowed the representative claimants’ misrepresentation claims to the extent of the five fraudulent misrepresentations that were actionable and causally linked to some representative claimants’ purchase decisions. It dismissed the claims relating to the two non-actionable representations and rejected the unilateral contract claims entirely. It also dismissed the claims for inducement of breach of contract and unlawful means conspiracy.
In addition, the court quantified damages for the successful representative claimants on a reliance basis, applying mitigation principles. The court also allowed Terraform’s counterclaim to the extent specified in the judgment, granting declaratory relief that the claimants were bound by the terms and conditions hyperlinked on Terraform’s websites.
Why Does This Case Matter?
This decision is important for practitioners because it provides a structured, evidence-driven approach to misrepresentation and reliance in the context of complex financial and technology-driven products, including cryptoassets. The court’s willingness to find fraudulent misrepresentations on some pleaded statements, while rejecting others as non-actionable, underscores that liability will turn on careful construction of the specific statements and their factual context rather than on the mere fact of market collapse.
From a damages perspective, the court’s reliance-based assessment and its application of mitigation principles offer practical guidance for claimants and defendants alike. In fraud and deceit claims, the measure of damages and the extent of recoverable loss can be decisive. The court’s approach signals that even successful claimants may face reductions where they failed to mitigate reasonably after the relevant risk or falsity became apparent.
Finally, the judgment’s treatment of unilateral contract arguments is likely to be influential. By holding that key Terra and Anchor representations were not contractual offers, the court reaffirmed that marketing or informational materials in technological ecosystems will not automatically be construed as binding offers. This will be relevant to future disputes involving online communications, white papers, and ecosystem descriptions, where plaintiffs may attempt to characterise broad statements as contractual terms.
Legislation Referenced
- Singapore International Commercial Court Rules 2021 (SICCR 2021), in particular O 10 r 19 (representative action)
Cases Cited
- Beltran, Julian Moreno and another v Terraform Labs Pte Ltd and others [2024] 4 SLR 674 (“Beltran (Arbitration Stay)”)
Source Documents
This article analyses [2025] SGHCI 17 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.