© Reuters. FILE PHOTO: Do Kwon, the cryptocurrency entrepreneur, who created the failed Terra (UST) stablecoin, is taken to court docket in handcuffs, to face fees of forging official paperwork, in Podgorica, Montenegro, March 24, 2023. REUTERS/Stevo Vasiljevic/File Pho
By Mrinmay Dey
(Reuters) -Terraform Labs (TFL), the corporate behind the stablecoin TerraUSD, which collapsed and roiled cryptocurrency markets in 2022, filed for Chapter 11 chapter in the USA, in response to court docket papers filed on Sunday.
Singapore-based Terraform Labs, in a submitting with the chapter court docket in Delaware, listed property and liabilities within the vary of $100-$500 million.
Terraform Labs stated it could meet all monetary obligations to staff and distributors throughout the Chapter 11 case with out requiring further financing. It additionally plans to proceed Web3 choices growth.
“The submitting will enable TFL to execute on its marketing strategy whereas navigating ongoing authorized proceedings, together with consultant litigation pending in Singapore and U.S. litigation involving the Securities and Change Fee (SEC),” Terraform Labs stated in an announcement.
The SEC’s civil case towards Terraform and Kwon is linked to the collapse of TerraUSD, a “stablecoin” designed to keep up a relentless $1 value, and the extra conventional token Luna, which intently related to TerraUSD.
Lately, a federal decide postponed the trial of the SEC towards the corporate and its co-founder, Do Kwon, over an alleged $40 billion cryptocurrency fraud, to allow Kwon’s extradition for his participation.
Kwon and Terraform Labs had been held answerable for two cryptocurrencies whose collapse brought about turbulence in crypto markets all over the world two years in the past.
Each cryptocurrencies misplaced an estimated $40 billion or extra when TerraUSD failed to keep up its $1 peg in Might 2022.