A significant development in the ongoing Terraform Labs (TFL) bankruptcy proceedings is a recent court order that authorized the struggling cryptocurrency company to take several key actions.
Terraform Labs, which was found responsible for defrauding investors and causing losses of approximately $40 billion in connection with the collapse of its TerraUSD and LUNA tokens in 2022, intends to address key aspects of its operations and settlements as it goes through the bankruptcy process.
Reopening the Swing Bridge and Burning LUNA Tokens
How announced On Friday, the company issued a court order that allows Terraform Labs to reopen the Shuttle Bridge, a component of the Terra network that facilitates the transfer of Terra assets to Ethereum (ETH), Binance Clever Chain (BSC), and Harmony in exchange for wrapped tokens.
TFL plans to migrate all assets held in Shuttle Bridge wallets to more secure wallets and provide users with a simplified interface to exchange secured assets up to 30 days from TFL’s proposed effective date Chapter 11 Roadmap.
After this period, TFL intends to permanently close the swing bridge and burn any remaining assets. Additionally, Terraform Labs has announced its intention to revoke the delegation and burn the 150 million LUNA tokens received from the Terra Community Grant.
According to Bankruptcy court Under the order and settlement reached between TFL and the U.S. Securities and Exchange Commission (SEC), TFL will also begin the process of revoking the delegation of the 125 million LUNA units currently held by 49 validators selected by the Terra Delegation Committee.
According to the company’s announcement, upon the revocation of the delegation of LUNA funds, both the 125 million LUNA funds earmarked for delegation and the 25 million LUNA funds earmarked for liquidity will be burned.
Terraform Labs is closing down
The bankruptcy court order comes as Terraform Labs, embroiled in a lengthy legal battle with the SEC, moved to wind down its operations following a settlement agreement. settlementamounting to $4.47 billion, concluded more than a year of intense legal proceedings.
How reported According to Bitcoinist, TFL CEO Chris Armani expressed disappointment in a social media post on X (formerly Twitter) regarding the outcome of the lawsuit, but confirmed that the company intends to wind down operations and hand over ownership of the network to the community.
On the other hand, former Terraform CEO Do Kwon, who is wanted by the United States and South Korea for his involvement in capital markets and securities fraud, also had to face legal complications.
Montenegro’s Supreme Court overturned Do Kwon’s extradition to South Korea in April, sending the case to the Podgorica High Court. The High Court will now determine whether the legal conditions for extradition have been met, with the final decision up to the Justice Minister.
At the time of writing, LUNA has seen a 2% decline in the 24-hour time frame, bringing the token’s value down to $0.000088. However, LUNA is still seeing gains of 24% and 32% in the seven-day and fourteen-day time frames.
Featured image from DALL-E, chart from TradingView.com
