✍️ 22 January, 2024 – 10:49 👤 Editor: Jakub Motyka
- Terraform Labs, the company behind TerraUSD, has filed for bankruptcy protection in the US under Chapter 11, with assets and liabilities in the range of $100 million to $500 million.
- The company faces legal proceedings, including an SEC civil case in the US and litigation in Singapore, related to the collapse of TerraUSD and Luna, which caused turbulence in the crypto markets and estimated losses of $40 billion.
- The latest news about cryptos on our Telegram channel.
Terraform Labs (TFL), the company behind the TerraUSD stablecoin, which collapsed and affected cryptocurrency markets in 2022, has filed a request for bankruptcy protection under Chapter 11 in the United States.
According to court documents filed On Sunday, Singapore-based Terraform Labs listed assets and liabilities in the range of $100 million to $500 million.
The future of Terraform Labs after its bankruptcy filing in the United States
“The filing will allow TFL to execute its business plan while navigating ongoing legal proceedings, including pending representative litigation in Singapore and litigation in the US involving the Exchange Commission and Securities (SEC)”, Terraform Labs said in a statement.
The company has assured that it will meet all financial obligations to employees and suppliers during the Chapter 11 case without the need for additional financing. Additionally, Terraform Labs plans to continue expanding its Web3 offerings.
The pending legal disputes of the founder of Terraform Labs
The SEC‘s civil case against Terraform and its co-founder, Do Kwon, is related to collapse of TerraUSD, a stablecoin designed to maintain a constant price of $1, and the most traditional token Luna, closely associated with TerraUSD.
Recently, a federal judge postponed the SEC trial against the company and Kwon for an alleged $40 billion cryptocurrency fraud to allow Kwon’s extradition for his participation.
Kwon and Terraform Labs were held responsible for two cryptocurrencies whose collapse caused turmoil in crypto markets around the world two years ago. Both cryptocurrencies lost an estimated $40 billion or more when TerraUSD failed to maintain its $1 peg in May 2022.
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