U.S. Bankruptcy Judge approves Terraform Labs’ wind-down plan.
Terraform lost an estimated $40 billion after TerraUSD and Luna crashed in 2022.
Do Kwon faces SEC settlements and criminal charges in the U.S. and South Korea.
Terraform Labs, the company behind the failed TerraUSD and Luna tokens, is preparing to wind down after a U.S. court greenlit its bankruptcy plan. This decision closes a chapter on its dramatic $40 billion collapse.
During a hearing in Wilmington, Delaware, U.S. Bankruptcy Judge Brendan Shannon described the plan as a “welcome alternative” to minimize investor losses rather than engage in lengthy legal battles. The crypto firm suffered an estimated $40 billion loss in 2022 when its TerraUSD and Luna tokens crashed, leaving investors and the cryptocurrency world in shock.
From Prominence to Collapse
The blockchain firm, founded by Do Kwon and Daniel Shin, was once known for its Terra blockchain protocol and algorithmic stablecoin payment platform. However, the company’s fortunes changed drastically in May 2022 when TerraUSD, a stablecoin meant to maintain a constant $1 price, collapsed. This led to the loss of nearly $45 billion in ma…
The post Terraform Labs, Behind TerraUSD Collapse, Gets Bankruptcy Approval appeared first on Coin Edition.
