Terraform Labs received approval from the U.S. Bankruptcy Court to begin liquidation on Thursday, PANews reported. Judge Brendan Shannon approved the bankruptcy plan at a hearing in Wilmington, Delaware, calling it a "welcome alternative" to continued litigation over investor losses.
Terraform estimates that it will be able to pay between $184.5 million and $442.2 million to cryptocurrency investors and other stakeholders as part of the bankruptcy liquidation.
In June, Terraform Labs reached a settlement with the U.S. Securities and Exchange Commission (SEC) and agreed to pay a $4.47 billion fine. The SEC accused Terraform and its founder Do Kwon of defrauding cryptocurrency investors, who lost about $40 billion when TerraUSD and Luna tokens collapsed in 2022. Do Kwon faces criminal charges in both the United States and South Korea, but he denies any wrongdoing.
