Terraform Labs to Reopen Shuttle Bridge, Burn LUNA Tokens as It Winds Down Operations

In a significant development in Terraform Labs' (TFL) ongoing bankruptcy proceedings, a recent court order has authorized several key actions for the troubled crypto company.

Terraform Labs (TFL), the company behind the collapsed Terra ecosystem, has obtained several key approvals from the bankruptcy court overseeing its Chapter 11 proceedings.

According to a company announcement on Friday, the court has authorized TFL to reopen the Shuttle bridge, a component of the Terra network that enables the transfer of Terra assets to Ethereum, Binance Smart Chain, and Harmony in exchange for wrapped tokens.

As part of this process, TFL will relocate all assets held in Shuttle Bridge wallets to more secure wallets and provide users with a simplified interface for redeeming wrapped assets until 30 days after the effective date of TFL’s proposed Chapter 11 plan. Following this period, TFL will permanently shut down the Shuttle bridge, and any remaining assets will be burned.

Furthermore, Terraform Labs has announced its intention to undelegate and burn the 150 million LUNA tokens received from the Terra Community Grant.

In compliance with the bankruptcy court order and the settlement reached between TFL and the US Securities and Exchange Commission (SEC), TFL will also initiate the un-delegation process for the 125 million LUNA currently staked with the 49 validators selected by the Terra Delegation Committee.

Once the LUNA has been undelegated, both the 125 million LUNA used for delegations and the 25 million LUNA allocated for liquidity provisioning will be burned, according to the company’s announcement.

This bankruptcy court order comes as Terraform Labs, embroiled in a long legal battle with the SEC, has decided to dissolve its operations following a settlement agreement.

The SEC had accused TFL and its founder, Do Kwon, of defrauding investors and causing losses of approximately $40 billion with the collapse of its TerraUSD and LUNA tokens in 2022.

As part of the settlement, TFL agreed to pay $4.47 billion in penalties and dissolve its operations, while Kwon remains at large after being charged with capital markets and securities fraud by the US and South Korean authorities.

At the time of writing, LUNA has seen a 2% decline in the 24-hour time frame, bringing the token down to $0.000088. However, LUNA still records gains of 24% and 32% in the seven and fourteen-day time frames.

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