Singapore-based Terraform Labs (TFL), which operates digital assets TerraUSD (UST) and Luna, has filed for Chapter 11 bankruptcy protection in Delaware following the 2022 cryptocurrency collapse.
Terraform Labs, which granted its application under Section 11 of the Bankruptcy Protection Act, said the filing was a “strategic move to continue its business and support pending litigation in Singapore and US litigation involving the Securities and Exchange Commission.” ”. The group also said it will “fulfill all financial obligations to employees and vendors during the Chapter 11 litigation” without the need for additional financing.
According to court documents filed today, Terraform Labs' estimated assets and liabilities range from $100 million to $500 million, and the number of creditors ranges from 100 to 199.
According to the statement, Terraform Labs plans to continue expanding its Web3 business. The company recently acquired Pulsar Finance, a cross-chain portfolio manager and data provider, and launched Station v3, a cryptocurrency wallet, earlier this month.
“The Terra community and ecosystem has shown unprecedented resilience in the face of adversity. This action will continue our efforts toward our collective goals while resolving outstanding legal challenges. We need it to keep going,” said Chris Amani, CEO of Terraform Labs.
Terraform Labs, founded in 2018, wiped out at least $40 billion in market value and disrupted the cryptocurrency industry in May 2022.
The bankruptcy filing comes after the US SEC agreed to postpone the civil trial against Terraform Labs and co-founder Do Kwon on charges of $40 billion in cryptocurrency fraud from January 29 to March 25. It was held four days after. Kwon is currently being held in Montenegro on charges of using counterfeit cryptocurrencies. Travel documents for departure in March. The Terraform Labs co-founder could be extradited to the United States or South Korea in March, following a final extradition ruling that will be referred to Montenegro's justice minister.
In February last year, the US SEC indicted Kwon and Terraform Labs for defrauding US investors who purchased the digital assets Terra USD and Luna.
Kwon owns 92% of Terraform Labs, and the company's other co-founder, Daniel Shin, owns 8% of TFL, according to court filings.