Terraform Labs (TFL), the blockchain company that has been at the center of a long legal battle with the US Securities and Exchange Commission (SEC), has decided to dissolve its operations following a landmark settlement agreement. the Colonywhich was valued at a staggering $4.47 billion, ended more than a year of intense legal proceedings.
CEO Chris Armani confirms Terraform Labs closure
On Wednesday, the US Securities and Exchange Commission revealed details of the settlement, prompting CEO Chris Armani to do so Announce Complete liquidation of the company's operations via a social media post on X (formerly Twitter).
Armani admitted that TFL “always intended to dissolve at some point” and that the time had come. Expressing his gratitude to the supporters who stood by the company throughout the ordeal, Armani also praised the TFL team for their dedication to sustaining the company and ecosystem during difficult times.
While he expressed his disappointment about Trial outcomeArmani acknowledged that TFL will wind down its operations and transfer ownership of the chain to the community. Armani concluded by saying:
We have a lot to plan over the coming weeks, and I will be able to communicate further once the courts approve this. I'll be here until the winds die down to make sure everything runs smoothly.
TerraUSD collapse and investor losses
the Legal case v. Terraform Labs revolves primarily around allegations of fraud by the Securities and Exchange Commission. These accusations stem from the collapse of TerraUSD, a stablecoin, which resulted in losses of approximately $40 billion in investor assets in 2022.
During the trials leading up to the settlement, the SEC alleged that investors were deceived about the stability of the TerraUSD coin, which was “allegedly” algorithmically linked to the US dollar.
Terraform Labs denied the allegations, criticizing the SEC's portrayal of cryptocurrency companies as “outlaws.” Although it was submitted to Chapter 11 bankruptcy protection In January, the court ordered Terraform Labs to pay fines demanded by federal regulators.
On the other hand, former CEO Do Kwon, who is wanted by the United States and South Korea for his involvement in capital markets and securities fraud, also faced legal complications.
In April, the Supreme Court of Montenegro annulled Do Kwon's extradition to South Korea and referred the case back to the Supreme Court in Podgorica.
Decision on Do Kwon extradition It now falls to the Supreme Court, which will determine whether the legal conditions for extradition have been met. The final decision on extradition will rest with the Minister of Justice.
As Terraform Labs moves forward with its dissolution, stakeholders and industry observers are eagerly awaiting more details regarding the company's liquidation process. Additionally, the outcome of Do Kwon's extradition case has not yet been determined, leaving uncertainty surrounding his future and potential legal ramifications.
As of writing, the company's Luna Classic token (LUNC) was trading at $0.0001013, down 4.3% over the past 24 hours.
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