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14/06/24
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Terraform Labs to Hand Over Blockchain Control to Community as Operations End
Two days ago, Terraform Labs’ CEO Chris Amani revealed that the company will stop operating after they agreed to a settlement proposed by the Court with the U.S. Securities and Exchange Commission.
According to Amani, Terraform Labs is planning the sale of major projects within the Terra ecosystem and handing over control of the Terra blockchain to the community.
“[Terraform Labs] always intended to dissolve at some point and that point is now. We will be winding down operations completely. […] We were well positioned to accelerate things if we had won the trial, but unfortunately, we lost and as a result, can no longer operate,” said Amani.
The decision came after the court ordered the firm to pay disgorgement of about $3.6bn, representing net profits gained from the alleged conduct; the disgorgement fine includes prejudgment interest of about $467 million. A civil penalty of $420 million was also ordered, so the aggregate fines imposed on the firm is about $4.473bn.
TerraUSD lost its peg to the USD two years ago, prompting losses valued at billions of dollars. Last year, the SEC sued the firm for alleged sales of unregistered securities and defrauding investors after the collapse of the Terra ecosystem, and Amani took over as the firm’s CEO in July 2023.
Amani said Terraform wants to burn unvested and vested holdings, as well as usher in community-led governance of the Terra and Terra Classic blockchains. According to another report, the U.S. SEC may eventually receive a small portion of the $4.473bn settlement with the firm because claims are prioritized when it comes to bankruptcy.
The Wall Street Journal’s report noted that the firm’s assets were valued at $430.1 million against liabilities valued at $450.9 million when they filed for bankruptcy six months ago.
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