Important Development for LUNA and LUNC! Bankruptcy Application Arrived

In an important development, Terraform Labs, the organization behind the stablecoin TerraUSD (UST), which stirred the cryptocurrency market in 2022, has officially filed for bankruptcy in the state of Delaware in the United States. The move is positioned as a strategic step to address legal challenges while ensuring continuity in achieving the company's goals, as outlined in court documents filed Sunday

Basic Information on Terraform Labs (TFL) Filing for Bankruptcy
Terraform Labs, founded by Do Kwon and headquartered in Singapore, initiated Chapter 11 bankruptcy protection, as detailed in documents filed with the Delaware bankruptcy court on January 21.

The company's estimated assets and liabilities range from $100 million to $500 million, while the number of creditors ranges from 100 to 199. Do Kwon, who owns a 92% majority stake in Terraform Labs, manages the company, while South Korean entrepreneur Daniel Shin owns the remaining shares.

Terraform Labs CEO Chris Amani emphasized the importance of this strategic move and said:

“The Terra community and ecosystem have demonstrated unprecedented resilience in the face of challenges, and this action is a necessary move to allow us to continue working toward our shared goals while resolving pending legal challenges.”

Legal Challenges and Fraud Allegations
The background of Terraform Labs' bankruptcy filing includes legal difficulties and fraud allegations. Co-founder Do Kwon and the company are facing fraud charges and are also being sued by the U.S. Securities and Exchange Commission (SEC).

In December, Judge Jed S. Rakoff ruled in favor of the SEC, confirming that Terraform Labs and Do Kwon had sold unregistered securities and thus violated securities laws. Specifically, the court rejected allegations that the company engaged in transactions involving unregistered securities-based swaps. SEC's fraud case against Terraform Labs will continue to be heard by jury