Bitrabo Editorial
In the latest development amidst Terraform Labs’ bankruptcy case, a recent court ruling has given the green light for various significant actions for the troubled crypto firm.
Terraform Labs, held accountable for defrauding investors and incurring losses of around $40 billion due to the collapse of TerraUSD and LUNA tokens in 2022, is now focused on addressing crucial operational aspects and settlements during its bankruptcy proceedings.
Reopening of Shuttle Bridge and LUNA Token Burning
Recently announced by the company, the court order permits Terraform Labs to reopen the Shuttle bridge, a crucial component of the Terra network enabling the transfer of Terra assets to Ethereum (ETH), Binance Smart Chain (BSC), and Harmony in exchange for wrapped tokens.
TFL aims to move all assets from Shuttle Bridge wallets to more secure ones and offer users a simple interface to redeem wrapped assets for 30 days post the effective date of TFL’s proposed Chapter 11 plan.
Following this period, TFL plans to permanently shut down the Shuttle bridge, with any remaining assets being burned. Additionally, Terraform Labs has declared its intent to undelegate and burn the 150 million LUNA tokens acquired from the Terra Community Grant.
In adherence to the court order and settlement with the US Securities and Exchange Commission (SEC), TFL will also begin the un-delegation process for the 125 million LUNA currently staked with the 49 validators chosen by the Terra Delegation Committee.
Upon undelegation, both the 125 million LUNA used for delegations and the 25 million LUNA allocated for liquidity provisioning will be burned, as per the company’s announcement.
Terraform Labs to Cease Operations
Following a settlement agreement, Terraform Labs – entangled in a protracted legal dispute with the SEC – has opted to wind down its operations. The settlement, totaling $4.47 billion, concluded more than a year of intense legal battles.
TFL’s CEO Chris Armani, in a social media post on X (formerly Twitter), expressed disappointment with the trial outcome but confirmed the company’s decision to wind down operations and transfer chain ownership to the community.
Conversely, former Terraform CEO Do Kwon, wanted by both the United States and South Korea for alleged involvement in capital markets and securities fraud, also faced legal challenges.
The Supreme Court of Montenegro reversed Do Kwon’s extradition to South Korea in April, referring the case to the Higher Court in Podgorica. The final decision on the extradition rests with the justice minister after the Higher Court evaluates if the legal conditions for extradition are met.
At present, LUNA has witnessed a 2% decline within the 24-hour timeframe, bringing the token’s value to $0.000088. Nonetheless, LUNA still shows gains of 24% and 32% in the seven and fourteen-day periods, respectively.
Featured image from DALL-E, chart from TradingView.com