- Terraform Labs files for Chapter 11 bankruptcy protection with the US Court.
- The platform’s assets and liabilities range from $100 million to $500 million, as per the filing.
- The filing stated that the company would take care of the ongoing legal proceedings and the financial obligations.
Terraform Labs, the once-prominent crypto exchange whose collapse in 2022 triggered the protracted crypto winter, has recently filed for Chapter 11 bankruptcy in the US court.
According to a filing dated January 21, both the assets and liabilities of the company ranged from $100 million to $500 million.
In May 2022, Terraform Labs saw a major crash with the fall of its key tokens, TerraUSD and Luna.
Wiping out more than $40 billion in market cap, the fall of Terraform Labs led to the downfall of a wider crypto market.
According to the bankruptcy filing, Terraform Labs has agreed to settle the company’s financial obligations to its employees during the bankruptcy case without additional finance.
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Terraform Labs also plans to continue with its Web3 offerings’ expansion.
In addition, the company will also handle the prevailing legal affairs, including the SEC lawsuit and the bankruptcy proceedings.
The statement read, “The filing will allow TFL to execute its business plan while navigating ongoing legal proceedings, including representative litigation pending in Singapore and the U.S. litigation involving the Securities and Exchange Commission (SEC).”
Meanwhile, Chris Amani, Terraform Labs Chief Executive Officer, acknowledged the community’s cooperation in times of adversity. He further cited,
“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.”
The recent bankruptcy filing followed the postponement of Terraform Labs Co-Founder Do Kwon’s civil trial to January 25.
With multiple developments in the SEC lawsuit against the company, including Do Kwon’s arrest, his extradition procedures, and the recent filing, the crypto community is eagerly awaiting further moves.
