“Follow financial obligations to employees and businesses during bankruptcy protection period”
Terraform Labs, co-founded by Kwon Do-hyung, a key figure in the cryptocurrency Terra and Luna crash, filed for bankruptcy protection in a U.S. court.
According to CoinDesk US, a virtual currency media outlet, on the 21st (local time), Terraform Labs submitted an application for bankruptcy protection under Article 11 (Chapter 11) of the Federal Bankruptcy Act to the Delaware State Court on this day.
Terraform Labs stated in its application that it has assets ranging from 100 million (approximately 134 billion won) to 500 million dollars (approximately 670 billion won) and liabilities of the same amount.
The list of unsecured creditors includes TQ Ventures, a U.S.-based digital asset investment fund, and Standard Crypto, a San Francisco-based venture fund.
Terraform Labs said in a statement that it would meet its financial obligations to its employees and suppliers without requiring additional capital while under bankruptcy protection.
“This filing will allow the company to execute its business plan while navigating the ongoing legal proceedings, including the representative litigation in Singapore and the U.S. litigation,” he said.
Previously, Terraform Labs’ virtual currencies Terra and Luna plummeted in May 2022, with a market capitalization of about $40 billion (KRW 53.58 trillion) evaporating.
Mr. Kwon was later indicted in Korea and the United States on charges of fraud and violating securities laws, but as Mr. Kwon fled overseas, judicial authorities in both countries are having difficulty securing new recruits.
Mr. Kwon was arrested by local authorities at Podgorica International Airport, the capital of Montenegro, in March of last year, and the Montenegrin court decided to extradite Mr. Kwon in November of the same year.
However, it has not been decided to which country he will be extradited, and the U.S. Wall Street Journal (WSJ) previously reported early last month, citing a source familiar with the matter, that Montenegro’s Minister of Justice said in a closed-door discussion with the U.S. ambassador to his country that he plans to extradite Mr. Kwon to the United States. did.
The Montenegrin court acknowledged that the Korean Ministry of Justice had first applied for extradition, but ruled that the final decision would be made by the Minister of Justice.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.