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Terraform Labs announced on Thursday that it will cease operations after settling its civil fraud suit with the Securities and Exchange Commission (SEC) on June 12.
In a series of posts on X, CEO Chris Amani detailed the company's plans.
1/ With the proposed settlement now public, i can finally share some details about what is next for TFL.
— Chris Amani | Terra (@fleece_cannon) June 12, 2024
Terraform Labs will sell its remaining assets to digital asset portfolio manager Pulsar Finance, wen3 interface Station Wallet, and DAO management firm Enterprise Protocol. Key projects within the Terra ecosystem will be sold, and the community will take control of the Terra blockchain.
“TFL always intended to dissolve at some point and that point is now. We will be winding down operations completely,” Amani stated.
He thanked the community and the Terraform Labs team for their support and resilience.
Amani also highlighted plans for a community proposal to burn remaining vested tokens and the need for community-led governance of the Terra and Terra Classic (LUNC) blockchains.
Many community members supported LUNC's shift toward community governance, but some opposed it.
Impact of Legal Defeat
The decision to cease operations follows the $4.47 billion settlement with the SEC over the collapse of the algorithmic stablecoin UST in 2022. The settlement includes $3.58 billion in disgorgement and a $420 million civil penalty.
Amani acknowledged that while the company was well-positioned to accelerate growth if they had won the trial, the legal defeat left them unable to continue operations.
The value of Terra’s cryptocurrency tokens has plummeted following the news. Terra’s native LUNA has dropped by 7.3% over the last 24 hours and trading at $0.5218, at the time of writing. Terra’s decentralized finance (DeFi) protocols currently secure only $5.37 million in value locked, ranking it 107th among leading blockchains.