Terraform Labs Files for Bankruptcy in US

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Terraform Labs Pte. Lte. has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on January 21, according to the court’s website.

The company’s bankruptcy filing revealed that its liabilities are estimated to be between $100 million and $500 million, with assets in the same range. Terraform Labs is the creator of the algorithmic stablecoin TerraUSD and sister cryptocurrency Luna, both of which suffered a collapse in May 2022.

The US Securities and Exchange Commission accused the company and then-CEO Kwon Do-hyeong of fraud in February 2023.

This bankruptcy filing will help Terraform Labs manage ongoing legal matters, including the SEC lawsuit and a pending litigation in Singapore.

According to a statement from the company, this step will allow them to continue their work within the community and support infrastructure, innovative tools, and products.