Crypto firm Terraform Labs files for bankruptcy in US after $40B crypto crash

By Minh Hieu   January 23, 2024 | 05:00 pm PT
Crypto firm Terraform Labs files for bankruptcy in US after $40B crypto crash
Luna token price fluctuates following Terraform labs bankruptcy news. Photo by VnExpress/Khuong Nha
Terraform Labs, the cryptocurrency firm behind the Luna and TerraUSD tokens, which crashed and wiped out an estimated US$40 billion in 2022, has declared bankruptcy in the U.S.

The Singapore-based firm submitted its bankruptcy application to a court in Delaware on Sunday, according to The Straits Times.

This step is intended to enable the firm to maintain operations and support the Terra community and ecosystem, Terraform Labs said.

It reaffirmed its commitment to fulfilling all financial responsibilities to its employees and vendors throughout the bankruptcy process without the need for extra funding.

Both the company’s assets and liabilities were in the range of $100,000-500,000, as listed in court papers.

Just a few days before the filing, the U.S. Securities and Exchange Commission agreed to postpone the trial against the firm and its co-founder, Do Kwon, Reuters reported.

In the lawsuit, the commission held Terraform and Kwon responsible for the collapse of the two cryptocurrencies in 2022, in which both tokens lost an estimated $40 billion.

Kwon is currently being held in Montenegro after he was arrested for leaving the country with a fake passport last March.

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