Kwon Terraform Labs files for Chapter 11 bankruptcy protection
Do Kwon Terraform Labs, the company behind the now-defunct stablecoin TerraUSD (UST), has filed for bankruptcy protection in the United States.
According to a Jan. 21 filing, the company filed for bankruptcy protection in the 11th District of Delaware in the United States Bankruptcy Court, citing between $100 million and $500 million in liabilities and assets.
“The Terra community and ecosystem have shown unprecedented resilience in times of crisis, and this move allows us to continue working toward our common goal by resolving the remaining legal challenges,” said Chris Amani, CEO of Terraform Labs. A different description.
“We have overcome significant challenges before and, against long odds, the ecosystem has survived and even grown in new ways post-Depeg; we look forward to successfully resolving the outstanding legal proceedings.”
According to court filings, the defunct company has liabilities estimated at $100 to $500 million and the same amount in estimated assets.
The bankruptcy filing comes four days after the US SEC agreed to postpone Do Kwon's upcoming fraud trial to March 25 after receiving a request from Kwon's legal team to delay the proceedings.
Related: SEC joins Do Kwon's request to start trial after extradition to US
The Kwon Terra Money Ecosystem collapses in May 2022. Shortly after the company's demise, co-founder Do Kwon's whereabouts were unknown until he was arrested in March 2023 in Montenegro after he tried to use a forged travel document to leave the country.
The SEC first filed civil charges against Terraform Labs and Kwon in February 2023. Both parties have been accused of orchestrating a “multi-billion dollar crypto asset securities fraud” related to tokens previously called UST and Terra (LUNA).
Both the US and South Korea are seeking Kwon's extradition. Suspects are growing that Kwon may face heavy fines in both countries.
Kwon could face up to 40 years in prison if extradited to South Korea, where he committed most of his crimes.
Magazine: Defy's Billion Dollar Secret: Insiders Responsible for Hacking
