Terraform Labs ends operations, Terra Community takes over
Terraform Labs CEO Chris Amani has announced that the company will cease operations following a $4.47 billion settlement with the United States (US) Securities and Exchange Commission (SEC).
The company plans to sell key projects in the Terra ecosystem and give the community control of the Terra (LUNA) blockchain.
“[Terraform Labs] It is always meant to dissolve at some point and that point is now. We will completely destroy the system […] If we had won the test we would have been in a good position to speed things up but unfortunately we lost and as a result we cannot work.
Related: Terraform to pay $4.47B to settle SEC civil suit
The decision to settle
The decision to dissolve Terraform Lab in 2010 It follows a $4.47 billion settlement with the SEC regarding the historic collapse of algorithmic stablecoin UST in 2022.
The settlement includes a hefty $3.58 billion disgorgement — the relinquishment of ill-gotten gains — and a $420 million civil penalty.
In the year After taking over from Do Kwon in July 2023, Amani confirmed his intention to liquidate the company's operations and burn down unoccupied and owned properties.
“@evan_docs will post a community proposal soon to burn them all. [Terraform Labs] Unpaid Luna. Anything left in our wallets gets burned. [Terraform Labs]He said.
Related: Terraform, Do Kwon to Reach Fraud Settlement with SEC
Society to take the lead
Amani outlined the community's proposal for burning the remaining tokens and the need for community-driven governance of the Terra and Terra Classic (LUNC) blockchain.
The decision to hand over power to the community has drawn mixed reactions from the community – some expressing optimism while others have criticized the past leadership.
While most of the community supports the move to LUNC, one community member's response to Amani X's post strongly criticized the decision.
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Market and regulatory implications
Terraform Labs' solvency decision has sent LUNA and LUNC prices down 5% and 2% in the past 24 hours.
The 4.47 billion SEC settlement sets a significant regulatory precedent for actions taken in the crypto space and focuses on pushing regulatory compliance and governance.
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