1. Terraform Labs Chapter 11 Bankruptcy Overview:
- Filed under Chapter 11 by CEO Chris Amani, with the approval of the Board of Directors.
2. Financial Snapshot:
- Assets valued at $100 million, while liabilities amount to $500 million.
3. Founder's Legal Situation:
- Founder Do Kwon remains incarcerated in Montenegro for alleged involvement with falsified documents.
4. USTC Stablecoin Status:
- Despite the company's financial challenges, USTC, Terraform Labs' stablecoin, still holds the 9th position in market cap among stablecoins.
After engaging in an intricate game of cat and mouse with various agencies for nearly 20 months, Do Kwon and Terraform Labs have, at last, sought refuge in Chapter 11 Bankruptcy, officially filing with Delaware authorities on January 21, 2024. This strategic move comes after the company's notorious USTC and LUNA projects collapsed in 2022, causing a global loss of over $64 billion in assets.
Terraform Labs, the orchestrator of this financial drama, has made its bankruptcy filings under the United States Chapter 11 Bankruptcy, attributing the decision to a significant disparity between its assets and liabilities. According to the filed documents, the company's assets total $100 million, while liabilities soar to nearly $500 million, with a creditor count ranging between 100 and 199.
Legal proceedings were executed under the guidance of Chris Amani, Terraform Labs' CEO, with the approval of the company's board of directors. In an unexpected twist, despite the financial turmoil, Terraform Labs recently acquired Pulsar Finance, a cross-chain portfolio management company.
Meanwhile, founder Do-Kwon finds himself in custody in Montenegro, facing charges of falsifying travel documents. The uncertainty looms over his extradition.
Adding to the legal tangle, a US court has deemed the MIR and LUNA cryptocurrencies issued by Terraform Labs as securities, intensifying regulatory scrutiny. Additionally, a class action lawsuit in Singapore, filed by Julius Moreno Beltran and Douglas Gan, seeks justice for a consortium claiming a $57 million loss, further complicating Terraform Labs' legal landscape.
This is not the first time Terraform Labs has been under investigation; South Korean authorities probed the company after the collapse of LUNA and USTC, but no conclusive evidence was found. In February 2023, the SEC charged Terraform Labs and former CEO Do Kwon with criminal charges, alleging a multi-billion dollar scam between April 2018 and May 2022, branded as "crypto schemes."
The Terra LUNA fiasco, triggered by a fatal design flaw, saw both LUNA and USTC crumble in May 2022. Panic ensued as holders withdrew en masse, leading to a cascading collapse of the entire ecosystem. Despite this, USTC still holds the 9th position among stablecoins, boasting a market cap of approximately $220 million, though its value plummeted by 98%.
It is crucial to note that while this narrative aims to provide accurate and timely information, readers are advised to conduct their research due to the volatile nature of cryptocurrencies. Voice of Crypto disclaims responsibility for any missing facts or inaccuracies, emphasizing the need for independent financial decision-making in the realm of highly volatile crypto assets.
#terraformlabs #Crypto2024 #cryptocurrency #bankrupt #BinanceSquare

#Write2Earn Genesis Global settles legal dispute with New York AG Letitia James over allegations of selling unregistered securities via its Earn program.STORY HIGHLIGHTSThe filing shows #GENESIS will cease any future business operations in New York.Genesis creditors to adopt procedures valuing digital assets at current market price.Some stakeholders have voiced opposition to Genesis' proposed liquidation plan.On Thursday, February 8, #bankrupt cryptocurrency lender Genesis Global reached a settlement in the lawsuit filed by New York Attorney General Letitia James. The lawsuit alleged that Genesis had defrauded customers through its now-defunct Earn program.Under the Earn program, customers could earn interest payments by loaning their digital assets. However, according to the SEC, this activity constituted an unregistered securities offering.Genesis Global Settles With NYAGThe settlement agreement of Genesis with NYAG outlines terms whereby assets that could have been seized by state authorities will instead be returned to former Earn customers and other creditors associated with Genesis. This arrangement follows a separate $21 million settlement reached by Genesis to resolve a complaint filed by the U.S. Securities and Exchange Commission (SEC) regarding its Earn program.Last October, Attorney General James filed a lawsuit against Genesis, its parent company Digital Currency Group, and Gemini, alleging fraud amounting to $1.1 billion against customers. However, the settlement disclosed in the New York bankruptcy court specifically addresses allegations against Genesis alone, as per court documents.While the companies have consistently denied any wrongdoing, Genesis has agreed to settle the claims without admitting liability. Furthermore, as part of the settlement, Genesis has committed to cease its operations in New York and intends to undergo liquidation proceedings. Recently, the bankrupt crypto lender also filed for asset sales while selling a large part of its #gbtc shareholdings.NYAG Offers Help to the Bankrupt Crypto LenderNew York authorities have made a significant offer to creditors as per the court documents. This is irrespective of whether the company settles its debts in cryptocurrency or cash.Genesis, currently navigating Chapter 11 bankruptcy, has proposed a plan to return Bitcoin and other digital tokens to clients affected by the freeze on their assets. However, the final decision regarding the mode of repayment lies with the judge, who may mandate repayment in cash instead.One notable aspect of the proceedings is the agreement among major Genesis creditors to adopt procedures that would value digital assets closer to their current market prices. This adjustment reflects the substantial increase in cryptocurrency prices since the crypto lender filed for Chapter 11 in January 2023. Unlike previous bankruptcies in the crypto sector, where assets were valued at their Chapter 11 filing date, this approach seeks to account for the significant appreciation in crypto asset values over time.However, not all stakeholders agree with Genesis’ proposed liquidation plan. Digital Currency Group, the parent company of Genesis, has voiced opposition to the plan, arguing that it could unfairly benefit certain creditors in the Chapter 11 process.Genesis will present its proposed liquidation plan to Judge Sean Lane of the New York bankruptcy court on February 14th, seeking approval for both the settlement agreement and the proposed plan.