NEW YORK, Jan. 22 — Terraform Labs (TFL), the company behind the stablecoin TerraUSD that disrupted and disrupted the crypto market in 2022, has filed for Chapter 11 bankruptcy, according to court documents filed yesterday. did.
Singapore-based Terraform Labs listed assets and liabilities ranging from US$100 million to US$500 million (RM472.4 million to RM2.3 billion) in a filing with the Delaware Bankruptcy Court.
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Terraform Labs said it will meet all financial obligations to its employees and vendors during the Chapter 11 litigation without the need for additional financing. We also plan to continue expanding our Web3 products.
Terraform Labs said in a statement: “This filing allows TFL to execute on its business plan while navigating ongoing legal proceedings, including an ongoing representative action in Singapore and a US action involving the Securities and Exchange Commission (SEC). It becomes possible.”
The SEC’s civil lawsuit against Terraform and Kwon could lead to the collapse of TerraUSD, a “stablecoin” designed to keep the price of $1 constant, and the more traditional token Luna, which is closely related to TerraUSD. related to.
A federal judge recently postponed an SEC trial against the company and its co-founder Do Kwon on charges of USD 40 billion in cryptocurrency fraud to allow for Kwon’s extradition.
Kwon Institute and Terraform Labs were held responsible for two cryptocurrencies whose collapse caused turmoil in crypto markets around the world two years ago.
When TerraUSD failed to maintain its $1 peg in May 2022, both cryptocurrencies lost an estimated over $40 billion. — Reuters