based in Singapore Terraform Labs (TFL)the company behind digital assets TerraUSD (UST) and Luna; filed for Chapter 11 bankruptcy in Delaware after its cryptocurrency crash in 2022.
Terraform Labs, which confirmed its filing for Chapter 11 bankruptcy protection, said the filing is “a strategic step that will allow it to continue its operations and support pending litigation in Singapore and the U.S. with the Capital Market Commission”. The uniform also said it will “meet all financial obligations to employees and vendors during the Chapter 11 case” without requiring additional financing.
According court document filed todayTerraform Labs’ estimated assets and liabilities range from $100 million to $500 million, and the number of creditors is between 100 and 199.
Terraform Labs plans to continue expanding its Web3 business, according to its statement. The company recently acquired Pulsar Financeportfolio manager and cross-chain data provider and Station v3 launcheda cryptocurrency wallet, earlier this month.
“The Terra community and ecosystem have shown unprecedented resilience in the face of adversity, and this action is necessary to allow us to continue working toward our collective goals while resolving the legal challenges that remain,” said Chris Amani, CEO by Terraform Labs.
Founded in 2018, Terraform Labs wiped out at least $40 billion in market value and crashed the crypto industry in May 2022.
The bankruptcy filing comes four days later the US SEC agreed to postpone the civil suit against Terraform Labs and co-founder Do Kwon for alleged $40 billion cryptocurrency fraud by March 25 from January 29. Kwon is currently in custody in Montenegro for using fake travel documents to leave the country in March. The Terraform Labs co-founder could be extradited to the US or South Korea in March after the final extradition decision rests with Montenegro’s Justice Minister.
In February of last year, the US SEC charged Kwon and Terraform Labs with defrauding US investors who bought Terra USD and Luna digital assets.
Kwon owns 92 percent of Terraform Labs, and Daniel Shin, another co-founder of the company, has 8 percent of TFL, according to the court filing.
