Among the top controversial crypto companies in the world, Terraform Labs finally filed its Chapter 11 bankruptcy protection in the United States over the weekend. It is widely known that Terraform Labs was responsible for the massive collapse of two renowned cryptocurrencies, both known as stablecoins, the TerraUSD and the Luna coin, amidst the scrutiny it faced.
Moreover, the infamous former CEO and co-founder of Terraform, Do Kwon, is still in custody in Montenegro, awaiting extradition for the charges against him.
Terraform Labs Filed for Bankruptcy in the US
(Photo : SAVO PRELEVIC/AFP via Getty Images)
Bloomberg reported that earlier this Sunday, Terraform Labs filed for Chapter 11 bankruptcy protection in the United States, with massive assets and liabilities declared in its filing. An estimated $100 million to $500 million was said to be still in the crypto firm's filing but is not yet confirmed.
Moreover, Terraform Labs also has an estimated 100 to 199 creditors present, with its disgraced co-founder, Do Kwon, still owning a 92 percent stake, as a major shareholder of the company. It was found that his listed address was registered in Singapore, best known for being the company's incorporation, coming from Kwon and co-founder, Daniel Shin.
According to Reuters, Terraform claimed that it does not need additional financing to meet its financial obligations to employees and vendors amidst this Chapter 11 filing. Despite the bankruptcy filing, Terraform Labs is still looking into its Web3 offerings expansion for the company and its cryptocurrency.
Terraform Labs is also facing a massive fraud case from the US Securities and Exchange Commission, particularly with the alleged $40 billion fraud on Terra and Luna's collapse.
Terraform Labs and Do Kwon
As one of the top cryptocurrency firms during its heyday, Terraform Labs offered two of the top known stablecoins in the world, Terra and Luna, but its reign did not last long as it faced a significant collapse in the market. That being said, South Korean authorities claimed that this was due to the alleged fraudulent acts of 8 individuals from Terraform and their associates, issuing arrest warrants for them.
However, this became a wild goose chase for the notorious former CEO of the company, Do Kwon, who initially fled his home country and went to Singapore amidst the issue. It did not stop there, as the renowned executive was arrested in Montenegro, and it was found that he carried fake passports with him after denying the allegations that say he was on the run.
Similar to massive crypto cases before with FTX's Sam Bankman-Fried and Celsius Network's Alex Mashinsky, Do Kwon is facing a perilous fate for his alleged actions, yet to be deliberated for its legal proceedings. For now, the massive downfall of a renowned crypto firm was filed, with Terraform Labs issuing its Chapter 11 bankruptcy protection, with its assets soon to be turned over.
