Terraform Labs Dissolves After $4.47B Settlement With SEC

Terraform Labs (TFL), the blockchain company at the center of a protracted legal battle with the US Securities and Exchange Commission (SEC), has decided

Blockchain company Terraform Labs (TFL) will dissolve its operations following a $4.47 billion settlement with the US Securities and Exchange Commission (SEC). The settlement, announced on Wednesday, brings an end to a year-long legal battle.

The SEC had accused TFL of defrauding investors in the collapse of TerraUSD, a stablecoin that led to losses of around $40 billion in 2022. The regulator alleged that investors were misled about the stability of TerraUSD, which was “purportedly” pegged to the US dollar.

Terraform Labs denied the allegations, accusing the SEC of portraying cryptocurrency companies as “lawless.” Despite filing for Chapter 11 bankruptcy protection in January, Terraform Labs was ordered by the court to pay the penalties sought by federal regulators.

CEO Chris Armani announced the company’s dissolution on X (formerly Twitter), following the disclosure of the settlement details. Armani said that TFL had “always intended to dissolve at some point” and that the time had come.

Expressing gratitude to the supporters who stood by the company throughout the ordeal, Armani also commended the TFL team for their dedication to maintaining the company and ecosystem during the challenging times.

While expressing disappointment over the trial outcome, Armani said that TFL would wind down operations and transfer ownership of the chain to the community.

“We have a lot more to plan over the coming weeks, and I’ll be able to communicate more once this has been approved by the courts,” Armani concluded.

“I’ll be here for the full wind down to ensure all goes smoothly.”

Meanwhile, legal troubles continue for former Terraform Labs CEO Do Kwon, who is wanted by the United States and South Korea for his involvement in capital markets and securities fraud.

In April, the Supreme Court of Montenegro overturned Do Kwon’s extradition to South Korea and referred the case back to the Higher Court in Podgorica.

The decision on Do Kwon’s extradition now rests with the Higher Court, which will determine whether the legal conditions for extradition have been met. The final decision on extradition will lie with the justice minister.

As Terraform Labs prepares to dissolve, further details regarding the company’s winding-down process are awaited by stakeholders and industry observers. The outcome of Do Kwon’s extradition case is also yet to be determined, leaving uncertainty surrounding his future and the potential legal ramifications.

At the time of writing, Terraform Labs’ Luna Classic (LUNC) token was trading at $0.0001013, down 4.3% in the last 24 hours.

News source：https://www.kdj.com/cryptocurrencies-news/articles/terraform-labs-dissolves-b-settlement.html

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