Blockchain company co-founded by Do Kwon and Daniel Shin, Terraform Labs announced that it continues to operate and fulfill all financial obligations to employees and suppliers. The announcement comes as the company filed for Chapter 11 bankruptcy protection in the United States Federal Bankruptcy Court for the District of Delaware earlier today.
The filing will enable Terraform Labs to implement its business plan amid ongoing legal proceedings, which include representative litigation in Singapore and United States litigation involving the Securities and Exchange Commission (SEC). According to the company, this move will facilitate ongoing operations and assistance for the Terra community while addressing unresolved legal matters.
The company estimated liabilities and assets are ranging between $100 million and $500 million.
“The Terra community and ecosystem have shown unprecedented resilience in the face of adversity, and this action is necessary to allow us to continue working toward our collective goals while resolving the legal challenges that remain outstanding. This step protects our ability to continue working with the community on infrastructure, innovative tools and products, and other ecosystem support,” said Chris Amani, chief executive officer of Terraform Labs in a written statement. “We have overcome significant challenges before and, against long odds, the ecosystem survived and even grew in new ways post-depeg; we look forward to the successful resolution of the outstanding legal proceedings.”
The company additionally noted that following the acquisition of Pulsar Finance, a cross-chain portfolio manager and data provider, as well as the launch of Station v3—a cross-chain wallet enabling smooth multi-chain token swaps, transfers, gas fee token top-ups, and advanced cross-chain transaction history, along with the Enterprise Protocol cross-chain staking upgrade—it is set to continue expanding its Web3 offerings.
4/4 Following the recent acquisition of @PulsarFinance, the launch of @StationWallet v3, and the @enterprise_dao cross-chain staking upgrade, TFL plans to continue expanding its software suite, delivering useful and intuitive products to users across Cosmos.
— Terra Powered by LUNA (@terra_money) January 22, 2024
Established in 2018 and headquartered in Singapore, Terraform Labs is an open source software development company specializing in blockchain technology. The company has developed an end-to-end Web3 experience, encompassing a blockchain, wallet, block explorer, RPC solution, suite of apps and a range of developer tools.
Focused on facilitating the growth of decentralized economies, Terraform Labs is the core contributor to the Terra blockchain and is the creator behind products and tools such as Alliance, Station, Enterprise and Warp.
Terraform Labs Faces Legal Challenges
The Terra ecosystem faced a significant setback in May 2022. Following the company’s implosion, the co-founder Do Kwon was arrested in Montenegro in March 2023 for attempting to leave the country.
The US SEC initiated civil charges against Terraform Labs and Do Kwon in February 2023, accusing both parties of orchestrating a “multi-billion dollar crypto asset securities fraud” related to the tokens formerly known as UST and Terra (LUNA). The United States and South Korea currently are both seeking Do Kwon’s extradition, leading to speculation about the potential for multiple sentences in both countries.
Recently, the SEC agreed to a postponement of civil trial against Terraform Labs and its co-founder Do Kwon. The decision to delay the trial is aimed at facilitating Do Kwon’s extradition from Montenegro to allow his participation in the legal proceedings in the United States.
Amidst filing for bankruptcy protection, Terraform Labs maintains operational activity, emphasizing its commitment to the community and ongoing expansion, despite legal challenges and Do Kwon’s upcoming trial.
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