Singapore-based Terraform Labs (TFL), the company behind digital assets TerraUSD (UST) and Luna, filed for bankruptcy protection in Delaware after its cryptocurrency collapsed in 2022.
TerraformLabs confirmed that the company has filed for bankruptcy protection in the United States as "a strategic step that will enable it to continue operations and support pending litigation in Singapore and U.S. litigation involving the Securities and Exchange Commission."
According to a court document filed today, Terraform Labs' assets and liabilities are estimated to be between $100 million and $500 million, and the number of creditors is between 100 and 199.
In its statement, TerraformLabs said it plans to continue to expand its Web3 business. The company recently acquired cross-chain portfolio management company and data provider PulsarFinance and launched cryptocurrency wallet Stationv3 earlier this month.
"The Terraform community and ecosystem have shown unprecedented resilience in the face of adversity, and this action is necessary to allow us to continue working toward our collective goals while resolving outstanding legal challenges," said Chris Amani, CEO of TerraformLabs.
Terraform Labs, founded in 2018, wiped out at least $40 billion in market capitalization in May 2022, bringing the cryptocurrency industry to its knees.
Four days before the bankruptcy filing, the U.S. Securities and Exchange Commission agreed to postpone the civil trial against the co-founder of DoKwon Terraform Labs in an alleged $40 billion cryptocurrency fraud from January 29 to March 25. Kwon is currently in custody for leaving Montenegro in March using forged travel documents.
Last February, the U.S. Securities and Exchange Commission accused Quan and Terraform Labs of defrauding U.S. investors who purchased the digital assets TerraUSD and Luna.
Court documents show that Kwon owns 92% of Terraform Labs and Daniel Shin, another co-founder of the company, owns 8% of TFL.