Documents filed on January 21 indicate that Terraform Labs Pte. has voluntarily filed a Chapter 11 bankruptcy petition in Delaware.
The troubled cryptocurrency startup that created the defunct stablecoin TerraUSD stated in the petition that its estimated assets and liabilities range from $100 to $500 million. When TerraUSD, a cryptocurrency backed by the dollar and its LUNA token, crashed in May 2022, investor capital worth billions of dollars was lost.
“The filing will allow TFL to execute on its business plan while navigating ongoing legal proceedings, including representative litigation pending in Singapore and U.S. litigation” stated Terraform Labs in a statement.
TQ Ventures, an American digital assets investment company, and Standard Crypto, a venture fund based in San Francisco, are on the list of unsecured creditors.
Regarding the collapse of TerraUSD, the Securities and Exchange Commission (SEC) is presently threatening to bring a class action lawsuit against Terraform Labs and its founder, Do Kwon, in Singapore and have a trial in the United States.
In a different development, a U.S. judge declared that LUNA and MIR are securities in late December, defeating Kwon and Terraform Labs in their legal battle over their legality.