- Terraform Labs has filed for bankruptcy.
- In response, the price of LUNA plummeted.
Terraform Labs, the company responsible for the now-defunct stablecoin TerraUSD [UST], filed for Chapter 11 bankruptcy protection in the United States.
The filing, submitted to the United States Bankruptcy Court for the District of Delaware, disclosed estimated liabilities and assets in the range of $100 million to $500 million.
This development comes amid ongoing legal challenges and follows the collapse of the Terra ecosystem in May 2022.
Calling it quits
In response to the bankruptcy filing, Chris Amani, the CEO of Terraform Labs, emphasized the resilience of the Terra community.
He stated that the move is essential to address legal hurdles and continue working towards collective goals.
The decision follows the recent postponement of Do Kwon’s fraud trial by the U.S. Securities and Exchange Commission (SEC) to the 25th of March.
Kwon, the co-founder of Terraform Labs, had his whereabouts unknown after the ecosystem’s collapse until his arrest in Montenegro in March 2023 for attempting to use falsified travel documents.
The SEC initially filed civil charges against Terraform Labs and Kwon in February 2023.
The charges accused them of orchestrating a “multi-billion dollar crypto asset securities fraud” related to the tokens formerly known as UST and Terra [LUNA].
Both the U.S. and South Korea are currently seeking Kwon’s extradition, with potential legal consequences in both countries, including the possibility of multiple sentences.
If extradited to South Korea, Kwon could face a 40-year jail sentence in the country where the majority of his alleged crimes occurred.
Just like last time
In the past, LUNA has always been affected by developments around Terraform Labs and Do Kwon. Things remained the same this time around as well.
At press time, LUNA was trading at $0.608725 and its price had declined by a massive 7.78% in the last 24 hours.
The price movement of the token also remained bearish over the last few months, with many lower lows and lower highs being exhibited.
How much are 1,10,100 LUNCs worth today?
The RSI around the token had plummeted as well, suggesting that there was no bullish sentiment behind the LUNA token.
However, Social Volume around the token had grown, partly due to the updates around Terraform Labs and Do Kwon. But this sentiment remained largely negative, as indicated by the drastic drop in price.
Source: Santiment
