TERRAFORM LABS FILES CHAPTER 11 BANKRUPTCY IN THE US 

Embattled cryptocurrency company Terraform Labs, known for its involvement in the collapse of the TerraUSD stablecoin ecosystem in 2022, has filed for bankruptcy in the United States. The Singapore-based firm submitted a bankruptcy filing in Delaware, reporting assets and liabilities in the range of $100 million to $500 million. The filing also indicated that Terraform Labs has between 100 and 199 creditors.

This Chapter 11 bankruptcy protection filing comes shortly after a federal judge postponed the trial of Do Kwon, co-founder of Terraform Labs, who is facing allegations of a $40 billion cryptocurrency fraud in a case brought by the Securities and Exchange Commission (SEC).

Do Kwon, wanted by both the US and South Korea in connection with the Terra/Luna ecosystem collapse in 2022, is currently in custody in Montenegro for using a fake passport. Extradition to the US may occur by mid-March to face fraud charges.

Chris Amani, the CEO of Terraform Labs, stated that the bankruptcy filing was necessary to address legal challenges and allow the company to continue its operations. Amani expressed confidence in the Terra community’s resilience and its ability to navigate these challenges.

According to court documents, Do Kwon is listed as the majority shareholder of Terraform Labs with a 92% ownership stake, while South Korean entrepreneur Daniel Shin owns the remaining portion.

In response to these developments, the price of Terra (LUNA) experienced a 6% decline, trading at $0.623 at the time of writing. Terra (LUNA) had previously undergone a rebranding to Terra Classic (LUNC) in 2022, and a new chain assumed the Terra (LUNA) name. Despite an initial spike after the rebrand, the token has since declined by 97% from its peak.

The old LUNC token also declined by 5.5% to $0.000105, while TerraClassicUST is currently valued at $0.025, representing a significant loss in value.

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