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Terraform Labs proclaims Chapter 11 bankruptcy.

After its cryptocurrency collapsed in 2022, Singapore-based Terraform Labs (TFL) filed for Chapter 11 bankruptcy in Delaware.

Terraform Labs said its Chapter 11 bankruptcy filing is “a strategic step that will enable it to continue its operations and support litigation pending in Singapore and U.S. litigation involving the Securities and Exchange Commission.” The company stated it will “meet all financial obligations to employees and vendors during the Chapter 11 case” without extra financing.

A court filing released today estimates Terraform Labs’ assets and liabilities at $100 million to $500 million and its creditors at 100 to 199. 

According to their announcement, Terraform Labs will expand Web3. Station v3, a cryptocurrency wallet, was introduced this month after the business acquired Pulsar Finance, a cross-chain portfolio manager and data supplier.

“The Terra community and ecosystem have shown unprecedented resilience in the face of adversity, and this action is necessary to continue working toward our collective goals while resolving the legal challenges that remain,” said Terraform Labs CEO Chris Amani.

A 2018 startup, Terraform Labs, destroyed $40 billion in market value and the crypto industry in May 2022.

The bankruptcy filing came four days after the U.S. SEC postponed Terraform Labs and co-founder Do Kwon’s $40 billion bitcoin fraud civil trial to March 25 from January 29. Montenegro is holding Kwon for using fake travel credentials to flee in March. The Terraform Labs co-founder may be extradited to the U.S. or South Korea in March once Montenegro’s Justice Minister rules on extradition.

Last February, the SEC accused Kwon and Terraform Labs of defrauding U.S. investors who bought Terra USD and Luna.

The court document shows that Kwon owns 92% of Terraform Labs, and co-founder Daniel Shin owns 8%.

Juliet P.
Author: Juliet P.

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