Despite the collapse of its cryptocurrencies in 2022, Singapore-based Terraform Labs (TFL), the company behind digital assets TerraUSD (UST) and Luna, has filed for Chapter 11 bankruptcy in Delaware. The company sees this as a strategic step to enable it to continue its operations and support legal disputes in Singapore and the U.S. The bankruptcy filing comes four days after the U.S. SEC agreed to postpone the civil trial against Terraform Labs and co-founder Do Kwon over an alleged $40 billion cryptocurrency fraud to March 25.
The outfit is optimistic about the bankruptcy filing and has assured it will meet all financial obligations to employees and vendors without requiring additional financing. With estimated assets and liabilities ranging from $100 million to $500 million and the number of creditors between 100 and 199, Terraform Labs remains confident about continuing its Web3 business. Despite the challenges, the company recently acquired Pulsar Finance, a cross-chain portfolio manager and data provider, and launched Station v3, a cryptocurrency wallet, earlier this month. The CEO of Terraform Labs, Chris Amani, expressed the need to continue working towards collective goals and resolving the legal challenges that remain outstanding.
Terraform Labs gained popularity in the industry since its founding in 2018, but the collapse of the crypto industry in May 2022 led to the wiping out of at least $40 billion in market value. However, the company has plans to continue expanding its Web3 business despite the legal hurdles it currently faces.