Terraform Labs, the company behind LUNA and stablecoin UST, has filed for bankruptcy in the United States District of Delaware after seeming to recover from the collapse of the Terra ecosystem in May 2022.
The reported value places both estimated assets and liabilities within the range of $100-500 million dollars.
Terraform Labs Declares Bankruptcy Amid Founder’s Legal Issues
According to a recent court filing, Terraform Labs has filed for Chapter 11 bankruptcy protection in the United States District of Delaware.
This comes amid its founder, Do Kwon, in legal hot water, as he is still under extradition custody in Montenegro, while he requests that the United States court push back his scheduled trial by four-to-six weeks, so he can attend in person.
On Jan. 12, BeInCrypto reported that Kwon’s lawyers declared to the court that it is unlikely he will be able to attend his January scheduled hearing:
“Unfortunately, it now appears that Mr. Kwon is not likely to be extradited until February or March at the earliest.”
At the time of publication, Luna Classic is priced at $0.00010534. The filing for bankruptcy has had minimal influence on its value, as the price has increased by 0.15% in the last hour, yet has declined by 5.25% over the preceding 24-hour period.
Read more: A Guide to the Best Stablecoins in 2024
Bankruptcy Filing Swiftly Follows Terraform’s CEO Change
Last year, the crypto community speculated that Terraform Labs was rebuilding its reputation. Especially, following the significant collapse of its ecosystem in May 2022.
In July 2023, BeInCrypto reported that the company had appointed Chris Amani as the new interim CEO. Formerly holding the positions of COO and CFO, Amani was tasked with restoring Terraform Labs’ reputation..
It was the first of several crypto collapses in 2022. The domino effect wiped out billions of dollars of value from the crypto markets in a matter of days.
This is a developing story.
Read more: What Is a Stablecoin? A Beginner’s Guide
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Source: https://beincrypto.com/terraform-labs-files-chapter-11-bankruptcy/