Terraform Labs, the cryptocurrency firm behind the stablecoin TerraUSD (UST), has filed for Chapter 11 bankruptcy in the U.S.
Headquartered in Singapore, Terraform Labs, in a filing with a bankruptcy court in Delaware, listed assets and liabilities of $500 million U.S.
Terraform Labs said in court that it’s able to meet all financial obligations to its employees and vendors during the Chapter 11 case without requiring any additional capital or financing.
The TerraUSD stablecoin lost its peg to the U.S. dollar in 2022 and collapsed, causing chaos in cryptocurrency markets worldwide.
A stablecoin is a cryptocurrency whose value is tied to another asset, typically the U.S. dollar or the price of gold.
The U.S. Securities and Exchange Commission (SEC) has taken legal action against Terraform Labs and its co-founder Do Kwon following the TerraUSD collapse.
A U.S. federal judge recently postponed the start of the SEC’s trial against Terraform Labs so that Kwon can be extradited to the U.S. and participate.
About $40 billion U.S. was wiped off global cryptocurrency markets when the TerraUSD stablecoin failed to maintain its $1 U.S. peg in May 2022.
