Terraform Labs, a defunct stablecoin firm, has been granted Chapter 11 bankruptcy approval by a Delaware court. This decision, deemed a favorable alternative by Judge Brendan Shannon, aims to prevent prolonged legal battles over investor losses. The company, known for its TerraUSD (UST) stablecoin and Luna (LUNA) token, suffered a $45 billion market value collapse in May 2022, triggering a widespread crypto industry crisis. Following bankruptcy filing in January 2024, Terraform agreed to a $4.47 billion SEC settlement for defrauding investors. Founder Do Kwon, accused of misleading investors about TerraUSD's stability, faces civil fraud charges. Despite estimating potential payments of $184.5 million to $442.2 million to stakeholders, the firm's total crypto losses remain uncertain. Kwon, evading authorities in Europe and Asia, was arrested in Montenegro and faces extradition to South Korea. The outcome of today's decision may impact the SEC settlement, contingent on Terraform's liquidation success. Read more AI-generated news on: https://app.chaingpt.org/news