The company Terraform Labs, which on Sunday definitively lost $40 billion due to the collapse of its stablecoins TerraUSD and Luna, filed for bankruptcy protection from creditors. According to Bloomberg, the firm’s estimated assets and liabilities range between $100 million and $500 million, with an estimated number of creditors somewhere between 100 and 199. Co-founder and former CEO Do Kwon is listed as the majority shareholder with a 92% stake.
Kwon is still in prison after he and his companion were arrested in Montenegro in March last year while traveling with false passports. It is planned to be released in the US, which, according to Bloomberg, should probably happen by mid-March. In the US, Kwon will face securities fraud charges. The businessman is also facing similar charges in his home country of South Korea, which has reportedly led to he, his family, and some key Terraform Labs employees fled to Singapore in April 2022. Shortly before Interpol placed him on the wanted list in September of that year, Kwon denied being “on the run.”
Kwon met a similar fate as several owners of major cryptocurrency companies, namely FTX’s Sam Bankman-Fried and former Celsius Network head Alex Mashinsky.