Terraform Labs Files for Chapter 11 Bankruptcy
A Singapore-based firm, Terraform Labs, has filed for Chapter 11 bankruptcy protection. The company, which was responsible for the collapse of the TerraUSD stablecoin ecosystem in 2022, listed its assets and liabilities between $100 million and $500 million. The filing also revealed that there are between 100 and 199 creditors involved. This bankruptcy filing comes shortly after a federal judge postponed the trial of co-founder Do Kwon, who is facing allegations of a $40 billion cryptocurrency fraud.
Do Kwon Still Wanted
Do Kwon, co-founder of Terraform Labs, is wanted by authorities in both the US and South Korea. Following the collapse of the Terra/Luna ecosystem, which caused significant losses in the crypto market and led to the downfall of several digital asset firms in 2022, Kwon is currently in custody in Montenegro for traveling on a fake passport. He may be extradited to the US by mid-March to face charges of fraud.
Terra LUNA Price Reaction
The rebranding of the original Terra (LUNA) to Terra Classic (LUNC) resulted in the creation of a new chain under the Terra (LUNA) name. The LUNA token has experienced a 6% decrease in value over the past few hours, currently trading at $0.623. Since its peak after the rebranding in May 2022, it has suffered a staggering 97% decline. Similarly, the old LUNC token has dropped by 5.5% to $0.000105, while TerraClassicUST has collapsed to $0.025.
Hot Take: Terraform Labs Faces Bankruptcy as Co-founder Do Kwon Remains Wanted
Terraform Labs, the company behind the collapse of the TerraUSD stablecoin ecosystem, has filed for Chapter 11 bankruptcy protection. With assets and liabilities between $100 million and $500 million, the firm is facing legal challenges and a significant number of creditors. Meanwhile, co-founder Do Kwon is wanted by authorities in the US and South Korea for his alleged involvement in a $40 billion cryptocurrency fraud. The bankruptcy filing and ongoing legal proceedings have had an impact on the value of Terra tokens, with LUNA experiencing a 97% decline since its rebranding in 2022. The future of Terraform Labs remains uncertain as it navigates through these challenges.
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