Terraform Labs is ceasing operations, selling off key projects to pay a court-ordered fine, and handing over management of the Terra and Terra Classic blockchains to the community.
Chris Amani, CEO of Terraform Labs, announced the company’s complete shutdown following the court’s order to pay $4.47 billion as part of a settlement of a civil lawsuit filed by the U.S. Securities and Exchange Commission (SEC).
Amani disclosed that the shutdown issue was open since the SEC lawsuit was filed and became inevitable after the company lost the court battle. According to him, they lost and can no longer continue operations. He also said the company will sell all key projects in the Terra ecosystem to fulfill its financial obligations to the regulator. Thus, the following assets will be put up for sale:
- Pulsar Finance, a decentralized cross-chain data platform acquired by Terraform Labs in November 2023.
- Station, a cryptocurrency wallet and interface for working with various blockchain protocols and decentralized applications (dApps).
- Enterprise Protocol, a solution to simplify the creation and management of decentralized autonomous organizations (DAO). It provides users with tools to set up and maintain DAOs without the need for deep tech and programming skills.
However, it remains to be seen where exactly Terraform Labs intends to raise the amount needed for the settlement. According to a report by The Wall Street Journal, at the time of the bankruptcy filing in January 2024, the company had $430.1 million in its accounts, with Terraform Labs’ liabilities totaling $450.9 million. Also, under U.S. law, secured creditors have priority in bankruptcy, and the company must pay them first. Thus, the SEC will likely have to wait more than a year for payment.
The CEO of Terraform Labs also said that the management of the Terra and Terra Classic blockchain networks will be handed over to the developer community, and the team will soon burn all management tokens. The company’s decision led to a decline in the quotes of LUNA and LUNC, which over the past 24 hours fell by 5% and 2%, respectively.
A jury found Terraform Labs and its former CEO Do Kwon, who is in custody in Montenegro and awaiting extradition, guilty of the collapse of the Terra ecosystem. As part of the lawsuit settlement, the company agreed to pay $4.47 billion to the SEC, and Do Kwon will have to pay $204.3 million in fines.
Сообщение Terraform Labs to Cease Operations Due to SEC Settlement появились сначала на CoinsPaid Media.
