The collapsed crypto company Terraform Labs has filed for bankruptcy in the United States.
The company has filed a voluntary petition in the U.S. Bankruptcy Court for the District of Delaware.
The document, filed Sunday, indicates that Terraform Labs has between 100 and 199 creditors, owns between $100,000,001 and $500 million in estimated assets and owes between $100,000,001 and $500 million in estimated debts.
The document also indicates that disgraced Terra founder Do Kwon owns 92% of the company’s shares, while Daniel Shin, who co-founded Terraform Labs with Kwon, owns 8%.
The company reports this in a press release claims the bankruptcy filing is a “strategic step that will allow the company to continue its operations and support of the Terra community and ecosystem.”
Current Terraform Labs CEO Chris Amani says the Terra community and ecosystem have “shown unprecedented resilience” and states that filing for bankruptcy is necessary to resolve outstanding legal issues.
“This move protects our ability to continue working with the community on infrastructure, innovative tools and products, and other ecosystem support. We have overcome significant challenges before and, against long odds, the ecosystem has survived and even grown in new ways after deep development; we look forward to the successful resolution of the ongoing legal proceedings.”
Kwon was arrested in Montenegro last year after trying to board a flight to Dubai with forged documents. He is wanted by authorities in both the US and South Korea for his alleged role in the multi-billion dollar demise of the Terra (LUNA) ecosystem in 2022.
In December, U.S. District Judge Jed S. Rakoff ruled that Terraform Labs and Kwon had offered and sold the company’s proprietary token, LUNA, and its decentralized finance (DeFi) token Mirror Protocol (MIR) as unregistered securities.
While the judge sided with the U.S. Securities and Exchange Commission (SEC) on unregistered securities charges, he sided with Terraform Labs on the regulator’s claims that the company was unregistered on securities based swaps and rejected those fees.
The SEC and Terraform Labs had both moved for summary judgment in an ongoing fraud case. Rakoff denied both parties’ requests for summary judgment on the fraud claims, which will be decided at a jury trial.
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