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Terraform Labs is discontinuing its operations, liquidating essential projects to satisfy a court-mandated fine, and transferring control of the Terra and Terra Classic blockchains to the community.
Chris Amani, the CEO of Terraform Labs, revealed the company’s total shutdown following the court’s directive to pay $4.47 billion as part of a settlement related to a civil lawsuit initiated by the U.S. Securities and Exchange Commission (SEC).
Amani indicated that the shutdown had been a possibility since the SEC lawsuit was initiated and became unavoidable after the company lost the legal battle. He stated that they have lost and can no longer sustain operations. Additionally, he mentioned that the company will divest all significant projects within the Terra ecosystem to meet its financial responsibilities to the regulator. Consequently, the following assets will be offered for sale:
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However, it is still unclear how Terraform Labs plans to generate the funds necessary for the settlement. A report from The Wall Street Journal indicated that at the time of the bankruptcy filing in January 2024, the company had $430.1 million in its accounts, while Terraform Labs’ liabilities amounted to $450.9 million. Furthermore, under U.S. law, secured creditors take precedence in bankruptcy proceedings, meaning the company must settle their claims first. As a result, the SEC may have to wait over a year for its payment.
The CEO of Terraform Labs also mentioned that the governance of the Terra and Terra Classic blockchain networks will be transferred to the developer community, and the team will soon burn all management tokens. This decision by the company resulted in a decline in the prices of LUNA and LUNC, which dropped by 5% and 2%, respectively, over the past 24 hours.
A jury found Terraform Labs and its former CEO Do Kwon, who is currently detained in Montenegro and awaiting extradition, responsible for the collapse of the Terra ecosystem. As part of the lawsuit settlement, the company has agreed to pay $4.47 billion to the SEC, while Do Kwon will face fines totaling $204.3 million.
Сообщение Terraform Labs to Cease Operations Due to SEC Settlement появились сначала на CoinsPaid Media.
