The estimated assets and liabilities of the company range from $100 million to $500 million, according to the business.
The firm that created the defunct stablecoin TerraUSD (UST), run by Do Kwon’s Terraform Labs, has sought bankruptcy protection in the US.
A petition made on January 21 indicated that the company had sought Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware, estimating its liabilities and assets at $100 million to $500 million.
According to a separate statement by Chris Amani, CEO of Terraform Labs, “The Terra community and ecosystem have demonstrated unparalleled resilience in the face of adversity; therefore, this action is essential so that we may continue working toward our shared objectives while resolving the outstanding legal challenges.”
“We are eagerly anticipating the victorious conclusion of the remaining legal proceedings; we have triumphed over formidable obstacles in the past, and the ecosystem not only survived but flourished in novel ways after depeg.”
The court document states that the estimated assets of the now-defunct corporation are equal to its estimated liabilities, which range from $100 million to $500 million.
Four days before the bankruptcy filing, Kwon’s legal team requested a postponement of his imminent fraud trial, and the U.S. Securities and Exchange Commission (SEC) agreed to postpone the proceedings until March 25.
In May 2022, Kwon’s Terra ecosystem failed. It wasn’t until March 2023 that the co-founder was apprehended in Montenegro for trying to flee the country using fake travel credentials; his whereabouts had been a mystery since the corporation had collapsed.
Terraform Labs and Kwon were first subject to civil proceedings brought by the SEC in February 2023. There were accusations that the two groups had colluded in a “multi-billion dollar crypto asset securities fraud” using the UST and Terra (LUNA) tokens.
The United States and South Korea are both requesting that Kwon be extradited. Speculation that Kwon might face multiple sentences in both nations has been increasing.
Extraditing Kwon to South Korea would subject him to a 40-year prison term in the nation where the bulk of his offenses are believed to have been committed.
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