Terraform Labs Files for Chapter 11 Bankruptcy in the US
The Singapore-based firm, which was behind the collapse of the TerraUSD stablecoin ecosystem in 2022, listed assets and liabilities in the range of $100 million to $500 million, according to a Jan. 21 filing with a bankruptcy court in Delaware.
Moreover, the number of creditors is between 100 and 199, according to the filing.
The Chapter 11 bankruptcy protection filing comes just days after a federal judge postponed the trial of the Securities and Exchange Commission (SEC) versus co-founder Do Kwon over an alleged $40 billion cryptocurrency fraud, according to Reuters.
BREAKING: Do Kwon & Terraform Labs file for Chapter 11 bankruptcy.
lists both assets & liabilities in the range of $100m to $500m pic.twitter.com/n7SYhRBQAp
— borovik.eth (@3orovik) January 22, 2024
Do Kwon Still Wanted
Do Kwon is wanted by both the US and South Korea following the collapse of the Terra/Luna ecosystem, which wiped out billions from the crypto market and created a contagion that caused the collapse of several high-profile digital asset firms in 2022.
Kwon is currently in custody in Montenegro for traveling on a fake passport but could be extradited to the US by mid-March to face fraud.
Terraform Labs chief executive officer Chris Amani said in a statement:
“The Terra community and ecosystem have shown unprecedented resilience in the face of adversity, and this action is necessary to allow us to continue working toward our collective goals while resolving the legal challenges that remain outstanding.
We have overcome significant challenges before and, against long odds, the ecosystem survived and even grew in new ways post-depeg,” he said before adding, “We look forward to the successful resolution of the outstanding legal proceedings.”
The court documents listed Kwon as the 92% shareholder of Terraform Labs. South Korean entrepreneur Daniel Shin owns the remainder of the company, according to the papers.
Terra LUNA Price Reaction
The original Terra (LUNA) was rebranded to Terra Classic (LUNC), and a new chain was created assuming the Terra (LUNA) name.
The LUNA token has dumped 6% over the past few hours in a fall to $0.623 at the time of writing.
It spiked just after the rebrand in late May 2022 but has collapsed by 97% since that peak.
The old LUNC token declined by a similar amount on the day, dropping 5.5% to $0.000105 at the time of writing. TerraClassicUST is equally worthless, having collapsed to $0.025.
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