In Delaware, Terraform Labs submits Chapter 11 bankruptcy petition

Terraform Labs Pte. Ltd. has officially filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on January 21, as reported on the court’s website.

In Delaware, Terraform Labs submits Chapter 11 bankruptcy petition

According to the submitted filing, the company’s liabilities are estimated to fall within the range of $100 million to $500 million, mirroring its assets. Terraform Labs gained prominence as the entity behind the algorithmic stablecoin TerraUSD and its counterpart cryptocurrency Luna, both of which faced a collapse in May 2022. The situation worsened when, in February 2023, the U.S. Securities and Exchange Commission (SEC) brought fraud charges against the firm and its then-CEO, Kwon Do-hyeong.

The decision to file for bankruptcy is seen as a strategic move to address ongoing legal matters, including the SEC lawsuit and a pending litigation in Singapore. Terraform Labs, in a statement shared with The Block, stated, ‘This step protects our ability to continue working with the community on infrastructure, innovative tools and products, and other ecosystem support.‘ Chris Amani, the CEO of Terraform Labs, emphasized in the statement, ‘This step protects our ability to continue working with the community on infrastructure, innovative tools and products, and other ecosystem support.’

Terraform Labs, led by Do Kwon, initiates Chapter 11 bankruptcy protection filing

Terraform Labs, led by Do Kwon and known for the now-defunct TerraUSD (UST) stablecoin, has officially sought bankruptcy protection in the United States. The company filed for Chapter 11 bankruptcy protection at the United States Bankruptcy Court for the District of Delaware. In a filing dated January 21, the company disclosed estimated liabilities and assets ranging between $100 million and $500 million. Notably, this bankruptcy filing follows closely on the heels of a decision by the U.S. Securities and Exchange Commission (SEC) to postpone Do Kwon’s impending fraud trial to March 25. The SEC granted this delay in response to a request from Kwon’s legal team for additional time to prepare for the trial.