Cryptocurrency company Terraform Labs, which is behind the TerraUSD stablecoin that collapsed in the spring of 2022, filed for Chapter 11 bankruptcy in the United States, writes CNBC. This procedure provides for business restructuring and the possibility of continuing to work.
Terraform Labs’ liabilities, by its own estimates, range between $100 million and $500 million, while the company’s assets are estimated at approximately the same amount. In the submitted application, Terraform Labs assured that it would meet all its financial obligations to its employees and suppliers without the need for additional financing.
Despite the upcoming procedure, the company intends to continue expanding its Web3 offering.
- In May 2022, the TerraUSD stablecoin lost its peg to the dollar. This led to its collapse to $0.05. The incident caused a crash in the cryptocurrency market;
- In 2023, the Securities and Exchange Commission (SEC) charged the company and its founder Do Kwon with a billion-dollar fraud scheme;
- Last spring, Do Kwon was detained in Montenegro. The United States and South Korea requested his extradition; The Montenegrin court initially approved such a decision, but the appeal court sent the case for a new trial.
Author:
Natalia Gormaleva
Source: RB
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