crypto-news-flash.com
- Terraform Labs, co-founded by Do Kwon, files for Chapter 11 bankruptcy amidst a turbulent period, with LUNA and LUNC prices dropping by 5%.
- Despite facing legal challenges and a significant market value loss, the company continues to expand in the Web3 space.
Referring to recently public documents, Terraform Labs, a Singapore-based company co-founded by Do Kwon, has filed for Chapter 11 bankruptcy protection, as per filings with the United States Bankruptcy Court, District of Delaware, dated January 21, 2024.
According to the publicly available filing document dated January 2024, the company’s estimated assets and liabilities range from approximately $100 million to $500 million, as detailed in the court documents.
Recalling an earlier post by CNF from last year entitle Class action lawsuit against Do Kwon and Terra dismissed – Implications for Investors, it is now revealed that the number of creditors is between 100 and 199. Do Kwon holds a majority share of 92% in Terraform Labs. The remaining shares are owned by South Korean entrepreneur Daniel Shin.
In response to these developments, Chris Amani, the Chief Executive Officer of Terraform Labs, stated:
The Terra community and ecosystem have shown unprecedented resilience in the face of adversity. This action is necessary to enable us to continue working toward our collective goals while resolving the outstanding legal challenges.
A recent report by Yahoo Finance highlighted Terraform Labs’ plans to expand its Web3 business. This includes the recent acquisition of Pulsar Finance, a cross-chain portfolio manager and data provider, and the launch of Station v3, a cryptocurrency wallet, earlier this month. Chris Amani reiterated the company’s commitment to overcoming challenges and focusing on growth.
Notably, Terraform Labs, founded in 2018, experienced a significant downturn in May 2022, erasing at least $40 billion in market value and impacting the wider crypto industry. This decline coincided with the company facing turbulence, including filing for bankruptcy and a 5% drop in the prices of LUNA and LUNC.
The bankruptcy filing occurred four days after the U.S. SEC agreed to postpone the civil trial against Terraform Labs and co-founder Do Kwon regarding an alleged $40 billion cryptocurrency fraud. The trial is now rescheduled for March 25, 2024, moved from the initial date of January 29.
Kwon, currently detained in Montenegro for using falsified travel documents, could face extradition to the U.S. or South Korea in March, pending a final ruling on extradition by Montenegro’s Justice Minister.