Terraform Labs Bankruptcy Protection Reveals Up To $500M In Assets And Liabilities

Key Points:

• Terraform Labs, creator of the collapsed stablecoin TerraUSD, filed for Chapter 11 bankruptcy protection in the U.S. on January 21.
• The defunct company’s assets and liabilities, disclosed in Terraform Labs bankruptcy protection, range between $100 million and $500 million.

In a recent development, Terraform Labs, the company responsible for the once-prominent stablecoin TerraUSD, has officially filed for Chapter 11 bankruptcy protection in the United States.

Read more: Chainalysis: Terra Collapsed Due To Two Traders

Terraform Labs Bankruptcy Protection Now Filed

Terraform Labs bankruptcy protection, revealed in a filing made on January 21 to the United States Bankruptcy Court for the District of Delaware, marks a significant turn of events for the defunct firm.

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, the 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.