Doomed crypto firm Terraform Labs files for bankruptcy in the US

Doomed crypto firm Terraform Labs files for bankruptcy in the US

Co-founder Do Kwon is still jailed in Montenegro for using forged passports.

Doomed crypto firm Terraform Labs files for bankruptcy in the US |
REUTERS / Reuters

Terraform Labs, the company that wiped out $40 billion from the crypto market with the collapse of its TerraUSD and Luna stablecoins, has finally filed for Chapter 11 bankruptcy protection on Sunday. Bloomberg reports that the crypto firm’s estimated assets and liabilities are both in the range of $100 million to $500 million, with the estimated number of creditors being somewhere between 100 and 199. Co-founder and former CEO Do Kwon is listed as the majority shareholder at 92 percent, with an address registered in Singapore — where the company is incorporated.

Following the arrest of Kwon and his associate in Montenegro for traveling with forged passports last March, Kwon is currently still in jail until his extradition to the US — likely by mid-March, according to Bloomberg — where he will face securities fraud charges. The entrepreneur is also wanted in his home country, South Korea, for similar charges, which reportedly led to him, his family and some key Terraform Labs personnel fleeing to Singapore between April and May 2022. Shortly before Interpol placed him on the “red notice” list in September that year, Kwon denied that he was “on the run,” but the eventual discovery of his fake passports would suggest otherwise.

Kwon will likely join the fate of other big names in the crypto downfall, namely Sam Bankman-Fried of FTX fame and former Celsius Network chief Alex Mashinsky. Meanwhile, Coinbase continues its battle against the SEC’s accusation of illegally running an unregistered national securities exchange, broker and clearing agency. Bloomberg analyst Elliott Stein recently shared that Coinbase may likely win full dismissal as soon as this quarter, if not by the end of Q2.

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