In a significant development in Terraform Labs’ (TFL) ongoing bankruptcy proceedings, a recent court ruling has authorized several key actions for the embattled crypto company.
Terraform Labs, which was found liable for defrauding investors and causing losses of approximately $40 billion with the collapse of its TerraUSD and LUNA tokens in 2022, is aiming to address key aspects of its operations and regulations as it navigates the bankruptcy process.
Shuttle Bridge Reopening and LUNA Token Burning
As announcement On Friday, the court order allowed Terraform Labs to reopen the Shuttle Bridge, a component of the Terra Network that facilitates the transfer of Terra assets to Ethereum (ETH), Binance Smart Chain (BSC), and Harmony in exchange for wrapped tokens.
TFL plans to move all assets held in Shuttle Bridge wallets to more secure wallets and provide users with a simplified interface to exchange wrapped assets for up to 30 days after the effective date of the TFL proposal. Chapter 11 plan.
After this period, TFL intends to permanently close the Shuttle Bridge, and burn all remaining assets. Additionally, Terraform Labs has announced plans to delegate and burn the 150 million LUNA tokens received from the Terra Community Grant.
In accordance with the bankruptcy court In accordance with the order and settlement reached between TFL and the United States Securities and Exchange Commission (SEC), TFL will also initiate the delegation process for the 125 million LUNA currently staked to the 49 validators selected by the Terra Delegation Committee.
Once the LUNA is delegated, the 125 million LUNA used for delegations and the 25 million LUNA allocated for liquidity provisioning will be burned, according to the company’s announcement.
Terraform Labs to cease operations
The bankruptcy court’s decision comes as Terraform Labs, embroiled in a lengthy legal battle with the SEC, decided to dissolve its operations following a settlement agreement. regulationThe $4.47 billion settlement ended more than a year of intense legal proceedings.
As reported By Bitcoinist, TFL CEO Chris Armani, in a social media post on X (formerly Twitter), expressed disappointment with the outcome of the lawsuit, but confirmed the company’s plans to wind down operations and transfer ownership of the chain to the community.
On the other hand, former Terraform CEO Do Kwon, wanted by the United States and South Korea for his involvement in financial market and securities fraud, has also faced legal complications.
In April, Montenegro’s Supreme Court annulled Do Kwon’s extradition to South Korea, sending the case back to the Supreme Court in Podgorica. The Supreme Court must now determine whether the legal conditions for extradition are met, with the final decision resting with the Minister of Justice.
At the time of writing, LUNA has seen a 2% drop over a 24-hour period, bringing the token down to $0.000088. However, LUNA is still seeing gains of 24% and 32% over seven- and fourteen-day periods.
Featured image of DALL-E, chart from TradingView.com
