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Homepage > News > Business > Terraform to wind down operations; Consensys’ suit dismissed The United States Securities and Exchange Commission (SEC) saw progress in two of its cases last week, as a bankruptcy court approved Terraform Labs winding down its operations, meaning the company is a step closer to being able to pay some of the $4.47 billion it owes—along with founder Do Kwon—to the regulator. Meanwhile, a Texas federal court judge dismissed a lawsuit brought by blockchain company Consensys against the SEC that claimed the agency was investigating Ethereum to classify it as a security. In the first of these two positive results for the SEC, Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware approved Terraform’s bankruptcy plan, according to a September 19 Reuters report. The case emerged from the May 2022 collapse of Terraform Labs, when its UST algorithmic stablecoin lost its peg to the U.S. dollar, leading to the printing of more of the company’s native token, LUNA, in an attempt to prop up UST. This eventually led to a crash in LUNA, and the whole Terra ecosystem came tumbling down, with an estimated $60 billion being wiped out of the digital asset space. In February 2023, the SEC charged Terraform and Kwon in the U.S. District Court for the Southern District of New York with securities fraud and for offering and selling securities in unregistered transactions. In December, the court found the pair liable for the latter. Terraform filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware on January 21, 2024, only a couple of months before a jury unanimously found the company and its founder liable for securities fraud, in April. The SEC argued that the pair should pay $4.7 billion in disgorgement and prejudgment…

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Filed under: News - @ September 24, 2024 11:26 am