Bitrabo Editorial
Terraform Labs (TFL), a blockchain company engaged in a legal battle with the US Securities and Exchange Commission (SEC), has chosen to dissolve following a significant settlement of $4.7 billion, putting an end to prolonged legal proceedings.
CEO Chris Armani Announces Closure of Terraform Labs
In response to the SEC’s disclosure of the settlement details, CEO Chris Armani made a public announcement on X (formerly Twitter), confirming the complete shutdown of TFL’s operations.
Armani expressed gratitude towards supporters and the TFL team for their dedication during challenging times, stating that the company had always planned to dissolve at some point, with the time now having arrived.
Despite being disappointed with the trial’s outcome, Armani revealed that TFL would wind down operations and hand over ownership of the chain to the community, promising further communication once court approval is secured.
TerraUSD Collapse and Investor Losses
The SEC’s legal action against Terraform Labs primarily centered on allegations of fraud related to the collapse of TerraUSD, a stablecoin, resulting in approximately $40 billion in investor losses in 2022.
Throughout the trials preceding the settlement, the SEC accused TFL of deceiving investors about the stability of TerraUSD, which was purportedly pegged to the US dollar algorithmically.
Despite filing for Chapter 11 bankruptcy protection earlier in the year, Terraform Labs was mandated by the court to pay the penalties demanded by federal regulators, with former CEO Do Kwon also facing legal challenges.
As Terraform Labs proceeds with its dissolution, stakeholders and industry watchers anticipate further details on the winding-down process, while the outcome of Do Kwon’s extradition case remains pending, casting uncertainty on his future and potential legal consequences.
At the time of writing, the Luna Classic token (LUNC) was trading at $0.0001013, showing a 4.3% decline over the last 24 hours.
Image source: DALL-E, chart source: TradingView.com