Terraform Labs, the name behind TerraUSD (UST-USD) and TerraLuna (LUNA-USD), has voluntarily filed for Chapter 11 bankruptcy in Delaware.
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The company disclosed that it has about $100 million to $500 million in estimated assets and liabilities. Its TerraUSD (pegged to the U.S. dollar) and TerraLuna tokens had spectacularly collapsed in 2022, substantially weakening investor confidence in the crypto landscape.
The company is also facing legal action in Singapore and the U.S. At the same time, Terraform expects to honor all financial obligations to its employees and vendors without the need for additional capital during the bankruptcy proceedings. Further, Terraform aims to continue with the expansion of its Web3 offerings, according to Reuters. The failure of TerraUSD had led to an estimated loss of nearly $40 billion for investors. The price of Terra Classic has plunged by nearly 11% today.
In another development, Horst Jicha, the founder of crypto mining company USI Tech, has been accused of defrauding investors of nearly $150 million. At one time, USI promised returns of nearly 140% to investors. Subsequently, Jicha shuttered the platform and transferred most of the assets to accounts under his control, according to Bloomberg.
Meanwhile, Bitcoin (BTC-USD) and Ethereum (ETH-USD) have declined by 2.6% and 4.2%, respectively, today.
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