Terraform Labs decides to file for bankruptcy under Chapter 11 in the state of Delaware
Do Kwon, the former CEO and co-founder of the company, is now awaiting extradition from Montenegro, and his trial in the United States is scheduled to begin in late March.
Based on the information provided on the website of the United States Bankruptcy Court for the District of Delaware, Terraform Labs Pte. Ltd. filed their petition for bankruptcy under Chapter 11 on January 21.
According to the statement, the company's liabilities are believed to be somewhere in the region of $100 million to $500 million, and the quantity of assets that it has is also included within the same range.
With the collapse of both the algorithmic stablecoin TerraUSD and its sister cryptocurrency Luna in May 2022, Terraform Labs is the firm that was responsible for both of these cryptocurrencies. Fraud charges were brought against the company and its CEO at the time, Kwon Do-hyeong, by the United States Securities and Exchange Commission in February of 2023.
"This step protects our ability to continue working with the community on infrastructure, innovative tools and products, and other ecosystem support," said Chris Amani, the Chief Executive Officer of Terraform Labs, in the statement.
Through the filing of the bankruptcy petition, the corporation will be able to handle continuing legal matters, such as the lawsuit filed by the SEC and the litigation that is now pending in Singapore.
It was in March of the previous year when Kwon was taken into custody in Montenegro for trying to travel using forged papers. Kwon's plea to delay the trial of the Securities and Exchange Commission (SEC) against Terraform and Kwon until late March was granted by the United States District Court for the Southern District of New York. Meanwhile, the former head of Terra LUNA now awaits his extradition from the nation.
#TrendingTopic #Write2Earn #LUNC #luna