Terraform Labs Files for Bankruptcy Amid Legal Troubles

Co-founder Do Kwon Faces Extradition to the US, SEC Lawsuit Pending

Terraform Labs, the company behind the failed TerraUSD stablecoin, has filed for Chapter 11 bankruptcy, listing assets and liabilities between $100 million and $500 million.
The company’s co-founder, Do Kwon, is facing extradition to the US following the fall of TerraUSD and its sister token Luna, which vaporized billions of dollars in 2022.
Terraform Labs faces a civil securities fraud lawsuit from the SEC, linked to the 2022 collapse of its algorithmic stablecoin UST and governance token LUNA.
Do Kwon is currently serving a four-month sentence in Montenegro for using forged passports in an attempt to leave the country in March.
A federal judge last week agreed to postpone Do Kwon's SEC trial, after he requested that it be pushed back to enable him to attend, pending his extradition from Montenegro.