Terraform Labs Warns of Potential Shutdown of Products and Services by October 30
The shutdown of Terraform Labs sets an important standard for how bankruptcies are handled in the crypto industry, and will likely influence future bankruptcy cases.
You are viewing a single comment's thread from:
Terraform Labs has announced that several of its products and services may shut down by October 30, 2024. The company is in discussions with third parties to transfer control of these operations, but if no agreements are made, the shutdown will proceed.
The products that could be affected by this move are Enterprise, Warp, Station, and Alliance Hub. In addition, services like Finder Block Explorer, Foundation, IBC Relayers, Mantlemint, FCD, and API services are also at risk. This decision aligns with the company’s planned exit from direct involvement in the Terra ecosystem, a plan that’s been in motion since their bankruptcy filing.
Legal Background and Bankruptcy Proceedings
In September 2024, a US Bankruptcy Judge approved the company’s plan to wind down operations. The judge described the plan as a better alternative than prolonged litigation. Terraform Labs filed for bankruptcy in January 2023 following the collapse of its TerraUSD stablecoin and Luna
LUNA
$0.39
in May 2022. The event led to around $40 billion in investor losses.
Its founder, Do Kwon, was accused of financial fraud. Terraform Labs reached a $4.5 billion settlement with the US Securities and Exchange Commission (SEC). However, the SEC is unlikely to collect the full amount, as the settlement will be paid after Terraform addresses crypto loss claims from its bankruptcy proceedings.
Article