u.today
In the latest development in the Terra lawsuit, the SEC has requested that a U.S. federal judge approve a $4.47 billion settlement to resolve the lawsuit over the firm's 2022 collapse, which wiped out $40 billion in investor assets.
Terraform Labs will pay roughly $3.59 billion plus interest and a $420 million penalty, while Terra cofounder Do Kwon must transfer at least $204.3 million to the Terraform bankruptcy estate for distribution to investors, including $110 million in disgorgement, interest and an $80 million penalty, according to a court filing.
The resolution also requires Terraform to wind down its business and seek approval of a Chapter 11 liquidation plan in its bankruptcy case that replaces company directors, including current CEO Chris Amani, and appoints a trustee to use the company's remaining assets to pay creditors and investors.
The agreement was reached after a jury found Terraform Labs and cofounder Do Kwon responsible for fraud during a two-week civil trial in April.
What's next?
With the proposed settlement now public, Terraform Labs CEO Chris Amani takes to X to discuss what comes next for Terraform Labs (TFL). According to Amani, TFL had always planned to dissolve at some point, and the time has finally come. Following the court's request, TFL will be winding down operations completely.
2/ TFL always intended to dissolve at some point and that point is now. We will be winding down operations completely. Special thanks to the lunatics who supported us through this process and thanks to the TFL team. I’m incredibly proud that we were able to hold this company…
— Chris Amani | Terra (@fleece_cannon) June 12, 2024
In line with this, the Terraform Labs CEO stated that a community proposal will be shortly posted to burn all of TFL's unvested Luna. He further added that anything that remains vested in associated wallets will be burned by TFL.
Moving forward, the community will have to assume responsibility for the chain. Amani added that there are a few teams and developers who are willing to undertake this; additional information will be available in the coming days on associated forums.
Meanwhile, Terraform Labs products Pulsar finance, station wallet and enterprise protocol will continue to operate while TFL is winding down and preparing to sell.
Amani said a lot more is planned over the coming weeks and will be disclosed once approved by the courts.