Gold Finance reported that Terraform Labs has received approval from a US bankruptcy judge to begin liquidation. Terraform estimates it will pay approximately $1.845 billion and $4.422 billion to stakeholders as part of the bankruptcy.

In February 2023, the SEC filed charges against Terraform and its co-founder, Do Kwon, over the algorithmic stablecoin Terra USD (UST) which collapsed a year earlier. The agency alleged the company defrauded and misled investors. The two parties had a long-running dispute over the fine amount before reaching a settlement. Lawyers for Terraform and Kwon said the fine should be close to $1 million, while the SEC proposed they pay $5.3 billion.