Terraform Labs, a bankrupt crypto firm, is set for a Chapter 11 bankruptcy reorganization hearing on September 19 in Beijing. The outcome will determine if the company can restructure or must liquidate. Terraform Labs faced a dramatic collapse in 2022 when its stablecoin UST lost its peg to the US dollar. Following intense regulatory scrutiny and a lawsuit from the SEC, the company filed for bankruptcy in January 2024. A settlement with the SEC in July 2024 resulted in Terraform and its co-founder, Do Kwon, being banned from the crypto industry and agreeing to pay $4.5 billion in penalties. The company is now selling key assets, including Pulsar Finance and Station, as part of its bankruptcy proceedings.

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Bankrupt crypto firm Terraform Labs is now facing a critical moment with its Chapter 11 bankruptcy reorganization hearing scheduled for Sept. 19 in Beijing. The outcome of this hearing will play a crucial role in determining the company’s future. It has been embroiled in legal battles and financial turmoil since its dramatic collapse in 2022. The court’s decision will determine whether the company can successfully restructure and emerge from bankruptcy or be forced to liquidate its remaining assets and cease operations entirely. Terraform Lab’s fortunes took a sharp turn when its stablecoin UST lost its peg to the US dollar in May 2022, triggering a catastrophic collapse that wiped out billions of dollars in value. This event not only led to a loss of investor confidence but also attracted intense scrutiny from regulators, culminating in a lawsuit from the United States Securities and Exchange Commission (SEC) in February 2023. In January 2024, Terraform Labs filed for Chapter 11 bankruptcy in Delaware, marking the beginning of a long and complex legal process. The company’s co-founder and former CEO, Do Kwon, who had been at the center of the controversy, also faced legal action. In a joint settlement with the SEC announced in July 2024, Terraform and Kwon agreed to pay a staggering $4.5 billion in penalties, disgorgement, and interest. This settlement effectively banned Kwon and Terraform from the crypto industry, signaling the end of an era for the once-influential firm. As part of the bankruptcy proceedings, Terraform Labs is now seeking to sell key assets as it winds down its operations. Related: 3AC liquidators file $1.3B claim against Terraform Labs The company is actively exploring the sale of the portfolio tracking platform Pulsar Finance, the crypto wallet platform Station, the no-code decentralized autonomous organization (DAO) management platform Enterprise, and the smart contract automation protocol Warp. These businesses, once considered valuable assets, are now being sold as Terraform attempts to raise funds to meet its obligations under the SEC settlement. The $4.5 billion settlement with the SEC is one of the largest in the cryptocurrency industry’s history. It highlights the severity of the company’s transgressions and the far-reaching consequences of its collapse. The reopening of the Shuttle Bridge and the destruction of a subst a ntial amount of LUNA tokens, as authorized by the court , are seen as critical steps in the restructuring process. Magazine: The $2,500 doco about FTX collapse on Amazon Prime… with help from mom 

Terraform Labs Faces Crucial Bankruptcy Hearing in Beijing