Terraform Labs, which is currently bankrupt, is in the process of liquidating 4 of its entities in order to comply with its multi-billion-dollar SEC agreement.
To wound down operations, Terraform Labs, a bankrupt crypto firm, seeks to sell four businesses as part of a $4.5 billion agreement with the United States securities regulator.
Terraform announced on July 9 that it is “actively investigating” the possibility of selling its portfolio monitoring platform Pulsar Finance, smart contract automation protocol Warp, crypto wallet platform Station, and no-code decentralized autonomous organization (DAO) management platform Enterprise.
Pulsar Finance was acquired by Terraform in November 2023, just months before it filed for Chapter 11 bankruptcy in Delaware in January. The organization introduced the enterprise one year prior, in November 2022.
It continues to actively develop its Warp protocol and Station wallet, with its most recent updates occurring in February and March.
It further stated that the sale is part of its “broader wind-down of operations under the terms of its settlement with the US Securities and Exchange Commission” and is intended to “maximize value for its creditors and other stakeholders.”
Terraform reached a $4.5 billion settlement with the SEC last month, agreeing to pay nearly $3.6 billion in disgorgement, a $420-million civil penalty, and approximately $467 million in prejudgement interest.
Do Kwon, Terraform’s co-founder and former CEO, consented to pay $110 million in disgorgement, $14.3 million in prejudgment interest, and a $80 million civil penalty with the company.
The SEC’s February 2023 lawsuit, which accused Kwon and Terraform of securities law violations and fraud, was also terminated due to the agreement, which effectively prohibited them from participating in the cryptocurrency industry.
Terraform developed a cryptocurrency known as Terra Luna Classic (LUNC), which was linked to the US dollar algorithmic stablecoin TerraUSD (UST), which is now known as TerraClassicUSD (USTC). However, the linkage to the dollar was broken in May 2022.
The depeg resulted in an unstoppable death spiral for the prices of USTC and LUNC because the price of one was intended to balance the price of the other in Terraform’s ecosystem. The current state of both is a 100% decline.
The current token, Terra, did not respond to the news and is currently trading at $0.37, a 3% decrease from its apex of $18.87 in May 2022, as reported by CoinGecko.
Terraform extended an invitation to its investment financier, CAVU Securities, to communicate with individuals who are interested in purchasing its businesses.
