Terraform Labs Files for Chapter 11 Bankruptcy Following TerraUSD Collapse

Terraform Labs, the cryptocurrency firm behind the failed stablecoin TerraUSD, has filed for Chapter 11 bankruptcy in Delaware. The filing reveals estimated assets and liabilities ranging from $100 million to $500 million. TerraUSD collapsed in May 2022, resulting in significant losses for investors. Terraform Labs stated that the filing will allow the company to execute its business plan while addressing ongoing legal proceedings, including representative litigation in Singapore and the U.S. The bankruptcy comes as Terraform Labs faces a class-action suit in Singapore and an SEC trial related to the TerraUSD collapse. Terraform Labs CEO Chris Amani stated that the move is crucial for the company and its investors, allowing them to work toward goals while resolving outstanding legal challenges. Co-founder Do Kwon and Terraform Labs are facing fraud charges and a lawsuit from the U.S. Securities and Exchange Commission (SEC), with the recent ruling that they violated securities laws by selling unregistered securities. (Source: Coingape)