Terraform Labs Protects Itself through US Bankruptcy Filing
Terraform Labs (TFL) has taken the step of filing for Chapter 11 bankruptcy protection in the United States. The move comes as the company faces ongoing litigation with the U.S. Securities and Exchange Commission (SEC) over the collapse of the Terra blockchain. The bankruptcy filing includes details of the company’s assets and liabilities, estimating them to be between $100 million and $500 million. The filing states that funds will be available to distribute to unsecured creditors. Despite the filing, Terraform Labs has assured that it will fulfill its financial obligations to employees and vendors without seeking additional financing, and it plans to continue expanding its Web3 offerings.
Delivering on Financial Obligations
Terraform Labs has made a commitment to meet its financial commitments to employees and vendors throughout the Chapter 11 process without the need for additional financing. CNBC reports that the company also intends to expand its Web3 offerings as it navigates ongoing legal proceedings both in Singapore and in the U.S. involving the SEC. By filing for Chapter 11 bankruptcy protection, TFL aims to execute its business plan while dealing with the legal challenges it faces.
Kwon’s Trial Delayed
Kwon Do-hyeong, co-founder of Terraform Labs, who stands accused by the SEC of defrauding investors following the collapse of the luna cryptocurrency and stablecoin terrausd, will have his upcoming trial delayed. The trial has been moved to April to allow for Kwon’s extradition proceedings from Montenegro, where he has remained after an arrest warrant was issued by South Korean authorities. Meanwhile, Terraform Labs CEO Chris Amani expressed optimism, saying that the ecosystem has overcome previous challenges and that the company looks forward to a successful resolution of its legal proceedings.
Hot Take: Terraform Labs Files for Bankruptcy amid SEC Litigation
Terraform Labs has recently filed for Chapter 11 bankruptcy in the United States. This move comes as the company faces legal battles with the SEC over the collapse of the Terra blockchain. By filing for bankruptcy, Terraform Labs aims to continue executing its business plan while dealing with ongoing litigation. Despite this setback, the company has committed to meeting its financial obligations to employees and vendors without additional financing. Furthermore, Terraform Labs plans to expand its Web3 offerings. Meanwhile, co-founder Do Kwon’s trial has been delayed, allowing for extradition proceedings. Terraform Labs remains optimistic about the outcome of its legal proceedings.
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