Terraform Labs files for bankruptcy in the United States
TFL has stated that it will fulfill all financial obligations to employees and vendors
22.01.2024 - 08:35
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What’s new? Singapore-based Terraform Labs (TFL), which created the Terra blockchain ecosystem with the LUNA native token and UST algorithmic stablecoin, has filed for Chapter 11 bankruptcy in the United States. The firm reported between $100 million and $500 million in assets and liabilities. TFL intends to fulfill all financial obligations to employees and vendors without additional funding. It also plans to continue expanding its Web 3.0 offerings.
What else is known? Chapter 11 involves restructuring debt and continuing to operate the company, as well as prohibiting creditors from filing lawsuits to obtain the funds they are entitled to in bankruptcy proceedings.
“The filing will allow TFL to execute on its business plan while navigating ongoing legal proceedings, including representative litigation pending in Singapore and U.S. litigation involving the Securities and Exchange Commission (SEC),” TFL said in a statement.
In May 2022, the UST and LUNA exchange rates collapsed to zero, causing tens of billions of dollars in losses to investors. After Terra’s collapse, TFL founder Do Kwon went on the run, with lawsuits filed against him on fraud charges not only by authorities but also by investor groups from Korea, the US, and Singapore.
Terra Classic’s USTC stablecoin rate is up by 175% year-to-date
On November 27, the asset reached its highest level since last July
In January, the New York court postponed the start of Do Kwon’s fraud trial until March 25. The businessman is still in custody in Montenegro and is awaiting a decision by the Ministry of Justice on extradition to the United States or Korea, of which he is a citizen.
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