PODGORICA, MONTENEGRO - JUNE 16: Do Kwon is led out of court on June 16, 2023 in Podgorica, Montenegro. The TerraUSD cryptocurrency and its companion token Luna collapsed in 2022, wiping approximately $40 billion from the cryptocurrency market and Do Kwon, the founder, was charged with fraud by US prosecutors following his arrest in Montenegro. (Photo by Filip Filipovic/Getty Images)
Filip Filipovic | Getty Images News | fake images
Terraform Labs, the company behind the TerraUSD stablecoin, which crashed and roiled cryptocurrency markets in 2022, filed for Chapter 11 bankruptcy in the United States, according to court documents filed on Sunday.
Singapore-based Terraform Labs, in a Delaware bankruptcy court filing, listed assets and liabilities in the range of $100 million to $500 million.
Terraform Labs said it would meet all financial obligations to employees and suppliers during the Chapter 11 case without requiring additional financing. It also plans to continue expanding the Web3 offering.
"The filing will allow TFL to execute its business plan while navigating ongoing legal proceedings, including pending representative litigation in Singapore and US litigation involving the Securities and Exchange Commission (SEC)," Terraform Labs said in a release.
The SEC's civil case against Terraform and Kwon is related to the collapse of TerraUSD, a "stablecoin" designed to maintain a constant price of $1, and the more traditional Luna token, which became closely associated with TerraUSD.
A federal judge recently postponed the SEC's trial against the company and its co-founder, Do Kwon, for an alleged $40 billion cryptocurrency fraud, to allow for Kwon's extradition for his involvement.
Kwon and Terraform Labs were held responsible for two cryptocurrencies whose collapse caused turmoil in crypto markets around the world two years ago.
Both cryptocurrencies lost approximately $40 billion or more when TerraUSD failed to maintain its $1 peg in May 2022.
