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In the realm of cryptocurrency, we already witnessed the bankruptcy of several crypto firms, amid this, Terraform Labs has shown a similar action. Terraform Labs, the firm responsible for the now-defunct TerraUSD (UST) stablecoin, has sought refuge under Chapter 11 bankruptcy protection in the United States.&nbsp; Terraform Labs declares bankruptcy in Delaware According to a filing on January 21, 2024, at the United States Bankruptcy Court for the District of Delaware, Terraform Labs disclosed estimated liabilities and assets ranging from $100 million to $500 million. Following all these challenges, Chris Amani, the CEO of Terraform Labs, issued a statement acknowledging the remarkable resilience of the Terra community.&nbsp; 
Amani stated that the Chapter 11 filing is a necessary step to guide legal hurdles while maintaining focus on shared objectives. Despite past setbacks, Amani expressed confidence in overcoming challenges, noting the ecosystem’s growth following a previous crisis. 
This bankruptcy development closely follows a decision by the U.S. Securities and Exchange Commission (SEC) to delay the upcoming fraud trial of Do Kwon, the co-founder of Terraform Labs, until March 25. The extension was granted in response to a request from Kwon’s legal team. 
However, the Terra Money ecosystem, spearheaded by Kwon, faced a critical collapse in May 2022. Kwon’s whereabouts became unknown until his concern in Montenegro in March 2023 for attempting to leave the country using falsified travel documentation. 
The SEC had initially filed civil charges against Terraform Labs and Kwon in February 2023, accusing them of directing a “multi-billion dollar crypto asset securities fraud” related to the tokens formerly UST and Terra (LUNA). The Chapter 11 filing reveals that Terraform Labs is grappling with estimated liabilities and assets within the $100 million to $500 million range, highlighting the financial challenges facing the company. Bankruptcy impact on LUNA&nbsp;&nbsp; 
Adding to the complexity of the situation, <a href="https://news.todayq.com/do-kwon-set-to-extradite-us-rather-than-south-korea/">extradition requests</a> have been issued by both the U.S. and South Korea for Kwon as reported by Todayq News. The SEC alleges Kwon’s involvement in a significant crypto fraud, while South Korea seeks extradition based on purported crimes committed within its borders. If extradited to South Korea, Kwon could potentially face a daunting 40-year jail sentence. 
However, the future of Terraform Labs and its co-founder Do Kwon remains uncertain as legal proceedings and regulatory actions unfold.&nbsp; 
Following all these ongoing developments, Terra (Luna) is currently trading near $0.62, and in the last 24 hours, it has experienced over a 4.5% downturn. However, over the longer period of the last 30 days, it has plummeted by over 35%. It has been observed that, following the extradition of Do Kwon, this token is continuously falling. 
Additionally, the initial Terra Luna (LUNC) is also down by over 5%. Moreover, as of now, the overall cryptocurrency market is also experiencing a decline, with major cryptocurrencies like Bitcoin, Ethereum, Solana, and many others also seeing decreases. 
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LUNA tokens drop 5% as Do Kwon’s Terraform files for bankruptcy

Todayq News

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