Terraform Labs files for Chapter 11 bankruptcy in Delaware
Quick Take
- Co-founder and former CEO Do Kwon is currently awaiting extradition from Montenegro, while his U.S. trial is set for late March.
Terraform Labs Pte. Lte. filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Jan. 21, according to the court’s website.
The company’s liabilities are estimated to be between $100 million and $500 million, and its amount of assets lies in the same range, its filing showed.
Terraform Labs is the company behind the algorithmic stablecoin TerraUSD and sister cryptocurrency Luna, both of which collapsed in May 2022. The U.S. Securities and Exchange Commission charged the firm and then-CEO Kwon Do-hyeong with fraud in February 2023.
The bankruptcy filing will allow the company to take care of ongoing legal affairs, including the SEC lawsuit and a pending litigation in Singapore, Terraform Labs said in a statement shared with The Block.
"This step protects our ability to continue working with the community on infrastructure, innovative tools and products, and other ecosystem support," Chris Amani, CEO of Terraform Labs, said in the statement.
Kwon was arrested in March last year in Montenegro for attempting to travel with false documents. The former Terra 
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chief is awaiting his extradition from the country, while the U.S. District Court for the Southern District of New York pushed back SEC’s trial against Terraform and Kwon to late March at Kwon’s request.
Updates: Added more details from the filing and Terraform Labs' statement
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