Court Approves Terraform Labs Operations Wind-down

A US court has granted Terraform Labs permission to cease its operations as it shifts its focus to working with the bankruptcy trustee to distribute assets and settle claims from investors.

Terraform Labs, after reaching a settlement with the US Securities and Exchange Commission (SEC), has been given the green light to wind down its operations in bankruptcy by a court order.

The US Bankruptcy Judge Brendan Shannon has approved Terraform’s bankruptcy plan in Wilmington, Delaware. The court has considered this plan a favorable alternative to further disputes over investor losses.

With this approval, the proceedings of Terraform’s bankruptcy, which began in January this year, come to a close.

In April, following the jury’s finding that the company was involved in investor fraud, Terraform agreed to settle the case with the SEC by paying a fine of $4.47 billion.

It is estimated that the collapse of Terra ecosystem in 2022 resulted in a $40 billion loss for investors.

As part of the settlement, Terraform co-founder Do Kwon has been held liable to pay $110 million of the agreed amount, along with an additional $14.3 million for prejudgment interest.