Terraform Labs has filed for bankruptcy protection in the US. This is about the well-known Chapter 11 process.

Terraform Labs is a well-known provider of collapsed stablecoin TerraUSD (USD). When the stablecoin lost its peg with the dollar, billions in customer deposits evaporated.

The filing was officially filed in the U.S. Bankruptcy Court for the District of Delaware. This is a special and important legal step for the company.

In its Chapter 11 filing, Terraform Labs shares its assets and liabilities estimated at $100 million to $500 million. The filing aims to restructure the company’s debt.

They want to fulfill all financial obligations to both its employees and suppliers. The company indicated that this would be possible without the need for external financial support. Also, the company wants to focus fully on web3 again.

The report reads as follows:

“The filing will help TFL implement its business plan as it navigates ongoing legal proceedings, including US actions involving Singapore and the Securities and Exchange Commission (SEC).”

TerraUSD collapsed in May 2022. The SEC has filed a civil suit against Terraform Labs and founder Do Kwon for a $40 billion crypto scam. This legal battle has, among other things, forced the company into bankruptcy.

Earlier, the SEC agreed to postpone Kwon’s hearing until mid-March.