Company behind Terra stablecoin files for bankruptcy protection
Terraform Labs (TFL), the company behind the stablecoin TerraUSD, which collapsed in 2022 and ushered in the dreaded ‘crypto winter’, has filed for bankruptcy protection in the US.
The Singapore-based company says it will meet all financial obligations to employees and suppliers during the Chapter 11 period without raising additional funding.
TerraUSD and sister currency Luna were pegged to the US dollar but proved unable to withstand the turmoil in the crypto market in 2022. The coins were mainly meant to be stable intermediate crypto transactions between different crypto currencies. Before crashing both coins had an estimated combined worth of $40 billion.
“The filing will allow TFL to execute on its business plan while navigating ongoing legal proceedings, including representative litigation pending in Singapore and US litigation involving the Securities and Exchange Commission (SEC),” Terraform Labs said in a statement seen by Reuters.
Recently, a federal judge postponed watchdog SEC’s lawsuit against the company and its co-founder Do Kwon. Do Kwon must first be extradited for the case from Montenegro where he was imprisoned for trying to leave the country using a forged Costa Rican passport.
News Wires
Subscribers 0
Fans 0
Followers 0
Followers