{"id":94330,"date":"2024-09-23T05:08:57","date_gmt":"2024-09-23T09:08:57","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=94330"},"modified":"2024-09-23T05:09:40","modified_gmt":"2024-09-23T09:09:40","slug":"terraform-labs-receives-approval-for-wind-down","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/terraform-labs-receives-approval-for-wind-down\/","title":{"rendered":"Terraform Labs Receives Approval for Bankruptcy Wind-Down After SEC Settlement"},"content":{"rendered":"\n

Terraform Labs, led by Do Kwon<\/a>, received court approval to wind down operations as part of a bankruptcy settlement.<\/p>\n\n\n\n

\"Terraform
Terraform Labs Receives Approval for Bankruptcy Wind-Down After SEC Settlement<\/figcaption><\/figure>\n\n\n\n

Terraform Labs, owned by Do Kwon, has been granted court consent to cease operations as part of a bankruptcy agreement.

Terraform's bankruptcy plan was authorized by US Bankruptcy Judge Brendan Shannon on September 19, describing it as a “welcome alternative” to additional litigation.

The corporation, which was incorporated in Singapore, was the subject of a lawsuit for defrauding cryptocurrency investors who lost $40 billion when Luna crashed in 2022.

In January, Terraform Labs<\/a> declared bankruptcy and ultimately reached a settlement agreement with the U.S. Securities and Exchange Commission (SEC) for an astonishing $4.5 billion.

The agency was seeking $4.7 billion in disgorgement and prejudgment interest for Terraform Labs and Do Kwon, as well as additional civil penalties of $420 million and $100 million for the firm and its co-founder, respectively.<\/p>\n\n\n\n

D. Kwon had contended that the SEC's initial request for $5.3 billion was “far less appropriate” than a maximum penalty of $1 million.”<\/p>\n\n\n\n

The SEC is unlikely to receive a significant amount, if any, from the settlement, as it has consented to be compensated only after Terraform has addressed crypto loss claims during its bankruptcy wind-down. Terraform stated that it is “impossible to estimate” the total value of crypto losses eligible for payment during the liquidation.

The company stated that it could distribute between $184.5 million and $442.2 million to crypto purchasers and other stakeholders as part of its bankruptcy liquidation.<\/p>\n\n\n\n

Luna and UST Collapse<\/h2>\n\n\n\n

In May 2022, the Terra ecosystem\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>, which was led by Terraform Labs, underwent a remarkable collapse. The value of UST, an algorithmic stablecoin that was intended to maintain a 1:1 parity with the US dollar, plummeted as a result of the loss of its peg.<\/p>\n\n\n\n

This resulted in a domino effect, which caused the price of Luna, the utility token of the ecosystem, to plummet to the point of near-worthlessness. The crash caused billions of dollars in losses for investors and marked the beginning of a protracted crypto winter for the remainder of the industry.<\/p>\n","protected":false},"excerpt":{"rendered":"

Terraform Labs, led by Do Kwon, received court approval to wind down operations as part of a bankruptcy settlement. Terraform Labs, owned by Do Kwon, has been granted court consent to cease operations as part of a bankruptcy agreement. Terraform’s bankruptcy plan was authorized by US Bankruptcy Judge Brendan Shannon on September 19, describing it […]<\/p>\n","protected":false},"author":36,"featured_media":94345,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[21975,21380,8081],"class_list":["post-94330","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bankruptcy-wind-down","tag-sec-settlement","tag-terraform-labs-2"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2024\/09\/image-1280x720-38-860x484-1.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/94330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=94330"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/94330\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/94345"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=94330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=94330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=94330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}