Terraform Labs files for bankruptcy

The Terraform Labs company behind the once infamous pair of LUNA-UST projects has filed for bankruptcy protection in the US.

Terraform Labs files for bankruptcy

Terraform Labs, developer of two projectsLUNA and stablecoin UST collapsed in May 2022, filed for bankruptcy in a Delaware court in the US.

In its bankruptcy filing, the company claims both assets and liabilities are currently between $100 and $500 million.

The bankruptcy filing was announced as Terraform Labs prepares to enter triallawsuit with the US Securities Commission (SEC). As reported by Coin68, the US court sided with the SEC whenacknowledges the argument that LUNA and UST are securities, and therefore Terraform Labs violated US law by offering these coins to US investors without going through the SEC.

However, the time for the trial has recently taken placepostponed to the end of Marchto wait for the participation of the founder of Terraform LabsDo Kwon, who isdetained in Montenegrobutrelease date unknown.

Terraform Labs initially blamed the collapse of LUNA-UST on external actors, claiming that the project had been taken over by investment funds such asCitadel Secutities plays dirty, but againCould not provide specific evidenceand was refuted.

In addition to Terraform Labs, another investment fund said to have a connection to LUNA-UST's operating model isJump Cryptoand the leaderKanav Kariya is also being investigated by the SECaccused of abetting acts of deceiving investors about the true nature of the project.

The price of LUNA token, the coin re-issued by Terraform Labs at the end of May 2022, has decreased slightly after news that the company declared bankruptcy.

1h chart of the LUNA/USDT pair on Binance at 09:35 AM on January 22, 2024

Meanwhile, the two old coins LUNA and UST, now renamed LUNC and USTC, also decreased slightly on Binance.

1h chart of the LUNC/USDT pair on Binance at 09:35 AM on January 22, 2024

1h chart of the USTC/USDT pair on Binance at 09:35 AM on January 22, 2024