Terraform’s assets and liabilities were estimated at between $100 and $500 million, as stated on the district court’s website.
According to representatives, the bankruptcy procedure will allow Terraform to simultaneously continue supporting the ecosystem and legal proceedings with the US Securities and Exchange Commission (SEC) and Singapore regulators.
“The Terra community and ecosystem have demonstrated unprecedented resilience in the face of adversity, and this action is necessary so that we can continue to work toward our collective goals while addressing remaining legal issues,” commented Chris Amani, CEO of Terraform Labs.
The LUNC token reacted with a fall
Amid the news, all Terraform-related cryptocurrencies sank. Thus, according to CoinMarketCap, the price of Luna Classic (LUNC) over the past 24 hours dropped by 5.2% to $0.000105.
Daily trading volume, meanwhile, increased by 6.8% and amounted to $31.5 million. Market capitalization decreased by 5% and now barely exceeds $600 million.
Allegations against Terraform and Do Kwon
The SEC first brought charges against Terraform and its founder, Do Kwon, in February 2023. The regulator claims that together, both parties organized a “multi-billion-dollar crypto-asset securities fraud” with the collapsed stablecoin TerraClassicUSD (UST) and LUNA.
The founder of the company was arrested in Montenegro in March last year. He tried to flee the country with false documents and is now awaiting extradition from the country to the United States or South Korea.
In November, the Podgorica court decided that Do Kwon would be handed over to the American authorities but later overturned this verdict.
Last week, the founder of Terraform asked the American court to postpone the hearing because he wanted to attend it in person. The authorities granted Kwon’s request, and a hearing is now scheduled for March 25.
