Terraform Labs Pte. has filed a voluntary petition in Delaware for Chapter 11 bankruptcy, according to documents filed on Jan. 21.
The embattled cryptocurrency firm behind the failed stablecoin TerraUSD declared in the filing it has between $100 to $500 million in estimated assets and the same amount in liabilities. TerraUSD, a dollar-pegged cryptocurrency and Terra's LUNA token collapsed in May 2022, destroying billion of dollars in investor wealth.
"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" Terraform Labs said in a statement.
Amongst the list of unsecured creditors are TQ Ventures, a U.S.-based digital assets investment fund, and Standard Crypto, a San Fransisco-based venture fund.
Terraform Labs and its founder, Do Kwon, currently face the prospect of a class action suit in Singapore as well as a trial in the U.S. from the Securities and Exchange Commission (SEC) regarding the collapse of TerraUSD.
Separately, in late December, Kwon and Terraform Labs lost a case regarding the status of LUNA and MIR when a U.S. judge ruled that they are securities.
Source : CoinDesk by Sam Reynolds / Jan 22, 2024