thenewscrypto.com
- Terraform Labs has filed for Chapter 11 bankruptcy protection in the United States.
- A US federal judge postponed the trial of Terraform Labs and Do Kwon, citing extradition considerations.
Terraform Labs, the entity responsible for the now-defunct stablecoin TerraUSD (USTC), has officially filed for Chapter 11 bankruptcy protection in the United States, according to a court document submitted on January 21.
The Singapore-based company, known for creating TerraUSD, listed its assets and liabilities in the range of $100 million to $500 million in the bankruptcy filing made with the court in Delaware. The move comes after the U.S. Securities and Exchange Commission (SEC) granted a delay in the upcoming fraud trial of Do Kwon, the co-founder of Terraform Labs, pushing the trial date to March 25.
Past Highlights
In February 2023, the SEC filed civil charges against Terraform Labs and Do Kwon, accusing them of multi-billion dollar crypto asset fraud. The charges are related to the tokens TerraUSD (USTC) and Terra (LUNA) and the upheaval in the crypto market caused by the $40 billion loss of the peg for TerraUSD in 2022.
After the firm’s collapse, the whereabouts of Do Kwon became a mystery until he was apprehended in Montenegro in March 2023. His arrest followed an attempt to use falsified travel documentation to leave the country.
However, LUNA, which has captured the crypto community’s attention with its performance, has seen a complete loss of its 100% value. While bankruptcy protection may appear to offer a remedy, the recent Chapter 11 filing for Terraform Labs in the US has resulted in the erasure of gains for USTC, LUNA, and Terra Classic (LUNC). Moreover, As the bankruptcy case extends, further losses are anticipated in the upcoming months, prolonging the impact on these tokens.