Terraform Labs, Once a Leader in the Crypto Sector, Is Facing the Final Phase of Its Closure

As part of a multibillion-dollar agreement with the Securities and Exchange Commission (SEC), the company has announced the sale of four of its companies.

Bankrupt crypto company Terraform Labs is looking to sell four of its assets, as part of a $4.5 billion agreement with the U.S. Securities and Exchange Commission (SEC).

The sales are part of a broader liquidation of Terraform’s operations, with the aim of maximizing value for creditors and stakeholders.

On July 9, Terraform announced that it is exploring options to sell the following platforms:

Pulsar Finance, a portfolio monitoring platform that was acquired by Terraform in November 2023.

Station, a crypto wallet platform.

Enterprise, a no-code management platform for decentralized autonomous organizations (DAOs) that was launched in November 2022.

Warp, a smart contract automation protocol that saw updates as recently as February and March.

Terraform filed for Chapter 11 bankruptcy in Delaware in January, just months after acquiring Pulsar Finance. Both Warp and Station are still being actively developed by Terraform, despite the liquidation process.

Other Terraform Labs-SEC agreements

Last month, Terraform reached a $4.5 billion agreement with the SEC. The settlement includes nearly $3.6 billion in disgorgement, a $420 million civil penalty, and about $467 million in prejudgment interest.

As part of the settlement, Terraform co-founder and former CEO Do Kwon has agreed to pay $110 million in disgorgement, $14.3 million in prejudgment interest, and a $80 million civil penalty.

The settlement also essentially bans Kwon and Terraform from the crypto industry, closing the book on a lawsuit that was filed by the SEC in February 2023, and which accused the parties of securities fraud and fraud.

Terraform created Terra Luna Classic (LUNC), a crypto that was designed to power the algorithmic stablecoin TerraUSD (UST), which is now known as TerraClassicUSD (USTC).

In May 2022, USTC lost its peg to the dollar, which caused both crypto prices to crash. At the time of writing, both LUNC and USTC prices have been nearly wiped out.

Even Terraform’s current token, Terra (LUNA), has failed to show signs of recovery. In fact, it fell 3% during the week to reach $0.37, and has dropped nearly 98% from its May 2022 peak of $18.87, according to CoinGecko.

Interested parties are asked to contact Terraform’s investment banker, CAVU Securities, for more information on the sales.

Rasgard accuses Do Kwon, Terraform Labs of misconduct in Terra Luna crypto crash

Crypto influencer Rasgard recently took to platform X (formerly known as Twitter) to highlight alleged misconduct by Do Kwon and his failed crypto venture Terraform Labs.

Accusing Kwon of deception and manipulation, the influencer claims that the Terraform founder always acted with the intention of deceiving the public.

According to Rasgard, Kwon orchestrated a secret deal with Jump Trading that led to the UST peg being lost for the first time in May 2021. Kwon allegedly misled the public by claiming that the token was designed to “autocorrect itself.”

Furthermore, Rasgard accuses Terraform Labs of faking transactions on the Chai payment platform to simulate legitimate activity. Prior to the crash, Kwon had also reportedly bet $1 million on the price of LUNA and the stability of the UST peg.

The situation worsened in 2022 when Anchor Protocol, a lending platform built on Terra, began slashing interest rates on stablecoin deposits.

This move reportedly led to a mass exodus of protocols, which contributed to the loss of the UST peg and the eventual collapse of LUNA.

The event sparked concern within the crypto community and led to increased regulatory scrutiny of algorithmic stablecoins.

Following these events, Kwon allegedly transferred over 10,000 BTC to a cold wallet, from which over $100 million was reportedly withdrawn via a Swiss bank.

Rasgard also claims that Kwon moved around 40,000 BTC from the burn wallet into secret wallets. Kwon was later arrested in Montenegro, facing eight charges, including securities fraud, commodities fraud, wire fraud, and conspiracy.

After multiple delays, Kwon and his legal team are awaiting extradition to face the trial.

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