Terraform Labs Cleared for Liquidation in U.S. Bankruptcy Court

PANews reported on September 20th that Terraform Labs received approval from a U.S. bankruptcy court to begin liquidation. U.S. Bankruptcy Judge Brendan Shannon, at a hearing in Wilmington, Delaware, approved Terraform's bankruptcy plan, 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.

Earlier this year, in June, Terraform Labs reached a settlement with the U.S. Securities and Exchange Commission (SEC), agreeing to pay a $4.47 billion penalty. The SEC previously accused Terraform and its founder, Do Kwon, of defrauding cryptocurrency investors who lost approximately $40 billion when TerraUSD and Luna tokens collapsed in 2022. Do Kwon faces criminal charges in both the U.S. and South Korea, though he has denied any wrongdoing.