Judge Brendan Shannon approved Terraform Labs’ liquidation plan, allowing the company to terminate assets worth between $184.5 million and $442.2 million.
Terraform Labs settled with the SEC following the fall of its stablecoin TerraUSD and cryptocurrency LUNA, leading to $40 billion in losses.
The SEC payment includes $4.47 billion, though the agency expects to regain only a fraction after investors' claims are settled.
Terraform Labs has received court permission to wind down its operations, honouring a development in its ongoing legal battle. A US bankruptcy court judge authorised the company plan during a recent bankruptcy hearing, allowing Terraform Labs to liquidate its remaining assets.
Judge Approves Terraform Labs Liquidation
In a recent hearing, Judge Brendan Shannon backed Terraform Labs' liquidation plan and considered it a more logical alternative to a long lawsuit. The judge’s ruling allows the company to begin winding up its assets, with possible payouts to investors and other stakeholders ranging from $184.5 million to $442.2 million.
Terraform Labs had been under investigation following the collapse of its stablecoin TerraUSD and cryptocurrency LUNA in 2022. This collapse led to approximately $40 billion in losses for traders.
As reported earlier by Cryptonewsland, It had been accused of duping investors by the SEC and its founder, Do Kwon, leading to many lawsuits and defamation. This has thus enabled the company to get approval for its liquidation plan from the SEC after it decided to settle with them.
Settlement and Asset Liquidation
The payment settlement that the SEC has made with the assistance of Terraform Labs is a payment regalement of $4. 47 billion. However, based on this, it is still expected that the regulator will be able to recoup only a fraction of this amount, with the payment being made out once claims are made by the affected investors. Terraform Labs has said that it is still impossible to forecast the total losses that will make the final share distributions for shareholders. LUNA has experienced different movements over the past 24 hours. At its peak, the price reached $0.3969 before undergoing a steady decline. The market opened higher but showed a notable downtrend, with several small recoveries that were short-lived. Towards the end, the price continued its downward trajectory, settling around $0.386 at the time of writing.
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