Terraform Labs Files For Chapter 11 Bankruptcy Protection In The US

According to Coincu, Terraform Labs, the company behind the collapsed stablecoin TerraUSD, filed for Chapter 11 bankruptcy protection in the United States on January 21. The defunct firm's assets and liabilities, disclosed in the bankruptcy protection filing, range between $100 million and $500 million. Terraform Labs gained notoriety as the creator of the algorithmic stablecoin TerraUSD and its sister cryptocurrency Luna, both of which experienced a collapse in May 2022. The U.S. Securities and Exchange Commission (SEC) had previously charged the company and its then-CEO, Do-hyeong Kwon, with fraud in February 2023. According to Bloomberg, court records indicate that Terraform Labs has disclosed its assets and liabilities to fall within the range of $100 million to $500 million. Terraform Labs bankruptcy protection sheds light on the financial standing of the company as it grapples with the aftermath of its stablecoin's demise. In an additional twist to the saga, Do Kwon was arrested in March of the preceding year in Montenegro for attempting to travel with false documents. Presently, he awaits extradition from the country, and the U.S. District Court for the Southern District of New York has postponed the SEC's trial against Terraform Labs and Kwon to late March, accommodating Kwon's request.