Terraform Labs (TFL) Files for Bankruptcy
Terraform Labs Pte Ltd (TFL), the company behind the TerraUSD (UST) stablecoin that caused the crypto market to collapse in 2022, has filed for Chapter 11 bankruptcy in Delaware, United States. The move is aimed at resolving the legal challenges faced by the company while allowing them to continue working towards their goals. The bankruptcy documents reveal that TFL has estimated assets and liabilities between $100 million and $500 million, with 100 to 199 creditors. Co-founder Do Kwon holds a majority stake of 92% in TFL, while Daniel Shin owns the remaining shares.
Legal Challenges and Fraud Charges
Terraform Labs and co-founder Do Kwon are currently facing fraud charges and have been sued by the U.S. Securities and Exchange Commission (SEC). In a previous ruling, Judge Jed S. Rakoff found TFL guilty of selling unregistered securities, but dismissed allegations of unauthorized security-based swaps. The SEC’s fraud case against TFL will be taken to trial by a jury.
Impact on Terra (LUNA) and LUNC Prices
Following the bankruptcy filing, Terra (LUNA) has experienced a 6% drop in the last 24 hours, with its current price at $0.62. The 24-hour high and low for LUNA are $0.621 and $0.666, respectively. Additionally, LUNC price has fallen by 2% in the last 24 hours, trading at $0.000105. The 24-hour high and low for LUNC are $0.000104 and $0.000112, respectively.
Hot Take: Terraform Labs Faces Bankruptcy Amid Legal Challenges
Terraform Labs, the company behind TerraUSD, has filed for Chapter 11 bankruptcy as it confronts legal challenges and fraud charges brought by the U.S. Securities and Exchange Commission. The move aims to resolve outstanding legal issues while allowing Terraform Labs to continue pursuing its goals. With co-founder Do Kwon holding a majority stake and assets and liabilities estimated between $100 million and $500 million, the bankruptcy filing marks a significant development in the case. As a result, Terra (LUNA) and LUNC prices have experienced declines in the last 24 hours. The future of Terraform Labs and its impact on the crypto market remain uncertain.
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