Terraform Labs Declares Bankruptcy in US Court

Terraform Labs Pte. has declared bankruptcy under Chapter 11 in Delaware, as seen in documents from Jan. 21. Terraform Labs, the company popularly known for the failed TerraUSD stablecoin has reported their assets and liabilities. The company reported an asset and Liability valued at $100 to $500 million, claiming that the value of their assets and liabilities are the same. TerraUSD and Terra's LUNA token collapsed in May 2022, causing huge losses for investors, a heartbreaking story in the history of crypto.

Now that the company has filed for bankruptcy, The filing will help Terraform Labs continue its business while dealing with legal issues, including its cases in Singapore and the United States, Two U.S. digital investment funds TQ Ventures and Standard Crypto, are both among the major creditors.

Terraform Labs and its founder Do Kwon are faced witha class action suit in Singapore and a U.S. trial by the Securities and Exchange Commission (SEC) due to TerraUSD's collapse.

In a separate U.S. case, a judge ruled that LUNA and MIR, two of Terraform Labs' cryptocurrencies, are securities. This decision was made in late December.