Chris Amani, CEO of Terraform Labs, has announced that the firm will cease operations following a $4.47 billion settlement with the United States Securities and Exchange Commission (SEC).
The company plans to sell key projects within the Terra ecosystem and transfer control of the Terra blockchain to the community.
“[Terraform Labs] always intended to dissolve at some point and that point is now. We will be winding down operations completely. […] We were well positioned to accelerate things if we had won the trial, but unfortunately, we lost and as a result, can no longer operate.”
This decision comes after Terraform Labs settled with the SEC over the historic collapse of the algorithmic stablecoin TerraUSD (UST) in 2022.
The settlement includes a $3.58 billion disgorgement and a $420 million civil penalty.
Having taken over from Do Kwon in July 2023, Amani confirmed the firm’s plan to wind down operations and burn both unvested and vested holdings.
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He stated, “@evan_docs will shortly post a community proposal to burn all of [Terraform Labs] unvested Luna. Anything that remains vested in our wallets will be burned by [Terraform Labs].”
Amani also emphasized the need for community-led governance of the Terra and Terra Classic blockchains.
The proposal to burn remaining vested tokens and transfer governance elicited mixed reactions from the community, with some expressing optimism and others critiquing past leadership.
The shift toward community control received broad support, particularly for Terra Classic, though some responses to Amani’s X post were critical of the decision.
The dissolution of Terraform Labs has impacted the market, with the prices of LUNA and LUNC falling by 5% and 2%, respectively, within the last 24 hours.
The $4.47 billion SEC settlement sets a significant regulatory precedent in the crypto space, emphasizing the importance of regulatory compliance and governance.
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