As an experienced financial analyst, I believe that the proposed settlement between Terraform Labs (TFL) and the SEC marks the end of an era for this troubled company. The $4.47 billion penalty, along with the requirement for TFL to wind down its business and seek bankruptcy liquidation, is a clear indication that the company’s days are numbered.
As an analyst, I would rephrase it as: The SEC has proposed a $4.47 billion settlement to the U.S. federal judge for approval, aiming to conclude the Terra lawsuit. This lawsuit stems from the 2022 collapse of the firm, which resulted in the loss of approximately $40 billion worth of investor assets.
According to recent court filings, Terraform Labs is required to pay approximately $3.59 billion, including accrued interest, and incur a $420 million penalty. Additionally, Do Kwon, one of the cofounders, must transfer a minimum of $204.3 million to the Terraform bankruptcy estate for subsequent distribution among affected investors. This amount consists of $110 million in disgorgement, interest, and penalties, totaling $80 million.
The decision calls for Terraform to close shop and request court approval for a Chapter 11 liquidation plan in their bankruptcy proceedings. This plan would involve replacing the current board, including CEO Chris Amani, with new directors, and designating a trustee to manage any remaining assets to repay creditors and investors.
As a crypto investor, I’d rephrase it like this: “The verdict came down in April after a two-week civil trial, with the jury finding me, along with Terraform Labs and my co-founder Do Kwon, guilty of fraudulent practices.”
What’s next?
After the recent announcement of the proposed settlement, Terraform Labs CEO Chris Amani shares insights on the future of Terraform Labs (TFL) in a public conversation on X. According to Amani’s statements, TFL had intended to disband eventually, and that moment has now arrived. In compliance with the court’s mandate, TFL is set to shut down its operations entirely.
TFL originally planned to discontinue its operations at some point, and that moment has arrived now. We will be gradually wrapping up all our business activities. A heartfelt gratitude goes out to those who have stayed with us on this journey, and a big thank you to the TFL team. I’m immensely proud of how far we’ve come as a company.
— Chris Amani | Terra (@fleece_cannon) June 12, 2024
According to the Terraform Labs CEO, a community proposal is imminently coming up for a vote to destroy all unclaimed Luna tokens held by Terraform Labs. Any Luna tokens that still remain vestted in related wallets will also be eliminated by Terraform Labs.
As a crypto investor, I understand that going forward, it will be the community’s role to take charge of the blockchain. Amani mentioned that there are dedicated teams and developers ready to assume this responsibility. More details about their efforts will be shared on relevant forums soon.
As a crypto investor, I can tell you that Terraform Labs (TFL) is in the process of winding down its operations and preparing to sell. However, this doesn’t mean that their products, such as Pulsar finance, Station wallet, and enterprise protocol, will cease to function. Instead, these platforms will continue to operate independently during this transition period.
I, as an analyst, can tell you that Amani mentioned there are more plans in store for the upcoming weeks, which will be shared once they receive the necessary court approvals.
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2024-06-13 19:27