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Singapore-based Terraform Labs, the firm behind TerraUSD and Luna, has filed for Chapter 11 bankruptcy in the US.
With the filing, Terraform Labs said it aims to sustain operations and address litigation in Singapore and the US. The company also committed to meeting its financial obligations without additional funding.
The bankruptcy filing coincides with the US SEC postponing the trial against co-founder Do Kwon to March 25. Kwon, charged with a US$40 billion crypto fraud case, is in custody in Montenegro.
Despite the filing, Terraform Labs is looking to continue expanding its business. The company recently acquired portfolio manager Pulsar Finance and launched crypto wallet Station v3.
Founded in 2018, Terraform Labs is the firm behind Terra, a blockchain protocol and payment platform for algorithmic stablecoins. It raised over US$200 million from investors like Arrington Capital, Coinbase Ventures, and Lightspeed Venture Partners.
In 2022, the prices of Terraform Labs’ Luna and Terra crashed, leading to a collapse in the crypto market that year. Experts said that the crash potentially wiped out half a trillion dollars in just one week.
See also: US regulator’s approval could trigger bitcoin rush among SEA investors
Editing by Miguel Cordon and Lorenzo Kyle Subido
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