News broke that Terraform Labs, a developer on the Terra blockchain, has agreed to settle with the U.S. Securities and Exchange Commission (SEC). Following the public announcement, Terraform Labs CEO Chris Amani revealed plans to dissolve the company and requested the community to take over the Terra network. The company also plans to sell several projects within the Terra ecosystem.
In May 2022, the Terra ecosystem’s algorithmic stablecoin UST experienced a severe destabilization event, leading to the collapse of the Terra chain and its native token LUNA. In February 2023, the SEC accused Terraform Labs and its founder Do Kwon of orchestrating a crypto asset securities fraud involving UST and other cryptocurrencies. According to reports, the SEC submitted a proposed final consent judgment this Wednesday and requested court approval. According to court documents, Terraform Labs has agreed to settle with the SEC and will pay a $4.47 billion fine.
Amani stated that the community will need to take ownership of the Terra blockchain, saying, “I believe there are several teams and developers who want to do this, and you should soon see relevant information on the forum.” Amani also mentioned that Terraform Labs plans to burn all unallocated LUNA through community proposals, stating, “Any remaining allocated assets in our wallets will be burnt by TFL.” The company will also initiate the process of selling several of its products, including Pulsar Finance, Station Wallet, and Enterprise DAO, with expectations that these products will continue to operate even after the company dissolves.
Chris Amani, who previously served as Terraform’s COO, took over as CEO in July 2023 following Kwon. Terraform filed for bankruptcy protection in the state of Delaware in January of this year.
References:
The Block, Chris Amani’s tweet
