Terraform Labs, Firm Behind Cryptocurrency Luna, Files for Bankruptcy

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January 22, 2024 – Seoul, South Korea** – Terraform Labs, the cryptocurrency firm behind the ill-fated Luna and TerraUSD (UST) stablecoin, has filed for bankruptcy in the United States. The filing comes after a tumultuous few months for the company, which saw the value of its cryptocurrencies plummet to near zero, wiping out billions of dollars in investor wealth. The bankruptcy filing was made in the Southern District of New York on Friday, January 20th. In its filing, Terraform Labs listed assets of between $10 million and $50 million, and liabilities of between $1 billion and $10 billion. The company said that it had more than 100,000 creditors. The collapse of Terraform Labs has sent shockwaves through the cryptocurrency world. Luna and UST were once two of the most popular cryptocurrencies, with a combined market capitalization of over $60 billion at their peak. However, the value of both currencies began to plummet in May 2022, after UST lost its peg to the US dollar. The ensuing sell-off wiped out the value of Luna and UST, and left many investors with significant losses. The bankruptcy filing is the latest in a series of setbacks for Terraform Labs. In May 2022, the company was fined $40 million by the Securities and Exchange Commission (SEC) for failing to register its Luna and UST offerings as securities. The SEC also accused Terraform Labs of misleading investors about the risks associated with its cryptocurrencies. The bankruptcy filing is likely to have a significant impact on the cryptocurrency industry. It is likely to further erode investor confidence in cryptocurrencies, and it could lead to increased regulatory scrutiny of the industry.

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