Terraform Labs Declare Chapter 11 Bankruptcy

 

Over the weekend, Terraform Labs, the creator of failed stablecoin TerraUSD, made headlines as it filed for bankruptcy.

This filing came shortly after it lost its case in late December when the U.S. judge ruled in favour of the SEC that LUNA, UST, and MIR are unregistered securities.

Alongside this ruling, Terraform Labs and its founder, Do Kwon, have been hit with a class action lawsuit in Singapore.

Amid the sad turn of events, Terraform Labs filed a voluntary petition in Delaware for Chapter 11 bankruptcy on Jan 21st.

The company declared in the filing that it has between $100 to $500 million in assets and the same amount in liabilities. Terraform also listed the names of its creditors: TQ Ventures, a U.S. based digital assets investment fund, and Standard Crypto, a San Francisco based venture fund, amongst others.

In its statement, Terraform Labs disclosed that the filing will allow it to execute its business plan while navigating ongoing legal proceedings, including representative litigation pending in Singapore and U.S. litigation.

Meanwhile, alongside the class action suit in Singapore against Terraform Labs and its founder, they will also be facing a trial in the U.S. from the Securities and Exchange Commission (SEC) regarding the collapse of TerraUSD in May 2022.

Before the devastating collapse of the Luna token and TerraUSD stablecoin, these cryptocurrencies were widely used by millions of investors worldwide. Its unforeseen collapse in 2022 shook the crypto industry as it destroyed billions of dollars in investor fortune.