San Francisco: Singapore-based crypto blockchain company Terraform Labs has filed for bankruptcy in the US following the collapse of its cryptocurrency in 2022.
The company’s digital assets TerraUSD (UST) and LUNA collapsed in May 2022, wiping out at least $40 billion of the company’s market cap.
In February 2023, the US Securities and Exchange Commission (SEC) charged Terraform Labs and its founder Do Hyoung Kwon with conspiracy to commit billion-dollar crypto asset securities fraud.
Terraform Labs has now confirmed its Chapter 11 bankruptcy protection filing, saying it is “a strategic move that will enable it to continue its operations and support the litigation involving the Securities and Exchange Commission in Singapore and the US.” “
Terraform Labs’ current estimated assets and liabilities range from $100 million to $500 million.
“The Terra community and ecosystem have shown unprecedented resilience in the face of adversity, and this action allows us to continue working toward our collective goals while resolving outstanding legal challenges,” said Chris Amani, CEO of Terraform Labs. It is necessary to give.”
A court in Montenegro last November approved the extradition to South Korea or the US of Do Kwon, the cryptocurrency entrepreneur behind the crash of TerraUSD and Luna.
Kwon was arrested in March last year after being caught at the airport with fake documents. In addition to the ongoing investigation in South Korea, Kwon has been charged with multiple frauds by US federal prosecutors.
