Terra Luna’s Developer Filed for Bankruptcy in the USA

Terraform Labs Files for Bankruptcy

Terraform Labs, the developer of the cryptocurrencies “Terra Luna” and “TerraUSD,” has filed for bankruptcy in the USA. The company submitted its bankruptcy application to a court in the state of Delaware under Chapter 11 of the US Bankruptcy Code, seeking creditor protection.

Reasons Behind the Bankruptcy

Terraform Labs was facing a major financial crisis in the US. The US accused Terraform Labs founder Do Kwon and the company of “orchestrating a multi-billion dollar cryptocurrency securities fraud.” These allegations severely damaged the company’s financial situation and reputation.

Do Kwon’s Legal Troubles

Do Kwon, 31, was on Interpol’s red notice list and was arrested in Montenegro last year. Both the US and South Korea had requested Kwon’s extradition. Kwon is also accused of fraud and violating capital market laws in his home country of South Korea. This situation further deepened Terraform Labs’ legal and financial troubles.

The Future of Terra Luna and TerraUSD

Terra Luna and TerraUSD were once highly popular projects in the cryptocurrency market. However, recent legal issues and the bankruptcy filing have made the future of these projects uncertain. The crypto community is eagerly waiting to see how Terraform Labs will navigate through this challenging period.