Terraform Labs, the creator of the destroyed LUNA and Terra USD tokens, filed for bankruptcy despite attempts to rebuild the company.
Terraform Labs filed for bankruptcy protection in Delaware Bankruptcy Court under Chapter 11 of the US Bankruptcy Law. In the filing, the company has disclosed estimated liabilities and assets ranging between $100 million and $500 million.
“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 United States,” Terraform Labs said in a statement.
The filing, filed in the United States Bankruptcy Court for the District of Delaware, caps the tumultuous journey the previously prominent Terra ecosystem has undergone since the collapse of its stablecoin TerraUSD (UST).
The company’s CEO, Chris Amani, acknowledged the challenges facing the company and expressed confidence in the resilience of the Terra community. Amani commented: “We have overcome major challenges before and despite everything, the ecosystem survived and even grew in new ways after the loss of parity.”
The collapse of Terra
It is worth remembering that the company collapsed in May 2022 after its LUNA and TerraUSD tokens They will cause a hole of US$40,000 million in the market. This episode was one of those that led the latest crypto bear marketwhich was unleashed in full force after the TerraUSD stablecoin lost its algorithmic link with the American dollar.
Do Know’s arrest
The news comes a few days after the Securities and Exchange Commission (SEC) Do Kwon’s fraud trial postponed to March 25co-founder and former CEO of Terraform Labs. According to Gurbir S. Grewal, director of regulatory compliance at the US regulator, the Terra project was “neither decentralized nor financial”, but rather a “fraud underpinned by a so-called algorithmic ‘stablecoin’ , whose price was controlled by the defendants, not by any code.”
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In recent months, Montenegro has authorized Kwon’s extradition to the US or South Korea to stand trial. There is speculation that the founder of Terraform Labs He is tried in both countries, facing up to 40 years in prison in the Asian country. Similarly, Kwon and the company also face a multi-millionaire class action lawsuit in Singapore.
Source: Ambito
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