Terraform Labs, A Company Managed By Do Kwon, Filed For Bankruptcy Due To Financial Difficulties.

Terraform Labs stated that its estimated assets and liabilities are between 100 million and 500 million dollars.

The company supported by the discontinued stablecoin TerraUSD (UST), Terraform Labs, has filed for bankruptcy in the United States. On January 21, the company applied to the Delaware District Bankruptcy Court, stating that its assets and liabilities are between 100 million and 500 million dollars.

Chris Amani, CEO of Terraform Labs, shared the following statement: "The Terra community and ecosystem have shown exceptional resilience in the face of challenges. This step is truly necessary to resolve pending legal difficulties and stay true to our common goals. We've overcome challenges before, the ecosystem has survived, and even thrived in new ways. We eagerly anticipate successfully resolving the pending legal process.”

According to the court documents, the estimated debts of the bankrupt company range between 100 million and 500 million dollars, and its estimated assets are in the same range.

The bankruptcy application was filed just four days after the legal team's request for a delay from Kown, following the SEC's acceptance of the postponement of the fraud case to March 25.

Kown's Terra Money ecosystem collapsed in May 2022. The whereabouts of the company's co-founder, Do Kwon, were unknown until his arrest in Montenegro in March 2023, where he attempted to use fake documents while attempting to leave the country.

SEC first filed a lawsuit against Terraform Labs and Kwon in February 2023, alleging "billion-dollar crypto asset fraud" involving the tokens previously known as UST and Terra (LUNA).

Both the United States and South Korea are seeking the extradition of Kwon. It is increasingly likely that Kwon will be prosecuted on multiple charges in both countries. If extradited to South Korea, Kwon could face a 40-year prison sentence.

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