Terraform Labs Pte. Ltd., a Singapore-based blockchain software development company behind the Terra blockchain network, TerraUSD (UST) algorithmic stablecoin, and LUNA token, filed for Chapter 11 protection on January 21, 2024 in the District of Delaware (Case No. 24-10070) before Judge Brendan Linehan Shannon. The filing was driven by SEC enforcement exposure after the May 2022 TerraUSD/LUNA collapse destroyed approximately $40-$45 billion in market value. A jury unanimously found Terraform and co-founder Do Kwon liable for securities fraud on April 5, 2024, leading to a settlement package totaling approximately $4.47 billion. Kwon was required to transfer at least $204 million to the bankruptcy estate and was later sentenced to 15 years in prison. A later-filed affiliate, Terraform Labs Limited, was jointly administered. The Second Amended Plan of Liquidation was confirmed September 20, 2024, establishing a Wind Down Trust (JTC Cayman Limited as trustee, Todd R. Snyder as Plan Administrator) with separate claim pools for general unsecured creditors and crypto loss claimants, plus a subordinated SEC consent claim. Repayment estimates were reported at $185 million to $442 million.
