👉👉👉 Terraform Labs says bankruptcy will aid appeal of #SEC suit
Terraform Labs, the creator of the now-defunct #stablecoin TerraClassicUSD (#USTC ), has filed for Chapter 11 bankruptcy, citing its intention to use bankruptcy protections to appeal a lawsuit filed by the United States Securities and Exchange Commission (SEC). The bankruptcy filing, submitted to a Delaware Bankruptcy Court on January 30, is seen as crucial for successfully challenging the SEC case.
Terraform Labs CEO, Chris Amani, argued that the Chapter 11 bankruptcy status would eliminate the need for a "supersedeas bond" (usually required for appeals) equal to 110% of the total judgment. Amani asserted that the SEC's claims against the firm, related to the alleged orchestration of a "multibillion-dollar crypto asset securities fraud," were unfounded. He contended that Terraform Labs' crypto assets, including approximately $28 million in Bitcoin, $7 million in various cryptocurrencies, and around $87 million in Luna tokens, should not be classified as securities.
The SEC had filed civil charges against Terraform Labs and its founder, Do Kwon, in February 2023, accusing them of involvement in a crypto asset securities fraud scheme. Kwon's Terra Money ecosystem collapsed in May 2022, leading to his arrest in Montenegro in March 2023. His extradition is sought by both the U.S. and South Korea, where he could face a 40-year jail sentence for alleged crimes committed in his home country.
The bankruptcy filing aims to protect Terraform Labs as it navigates legal challenges and appeals the SEC lawsuit.
Source - cointelegraph.com
