Bankrupt crypto firm Terraform Labs is planning to sell four of its businesses as it winds down operations in line with a $4.5 billion settlement with the U.S. Securities and Exchange Commission (SEC).
On July 9, Terraform Labs announced it is “actively exploring options” to sell its portfolio tracking platform Pulsar Finance, crypto wallet platform Station, no-code decentralized autonomous organization (DAO) management platform Enterprise, and smart contract automation protocol Warp.
Terraform Labs acquired Pulsar Finance in November 2023, just months before filing for Chapter 11 bankruptcy in Delaware in January 2024. The company had launched Enterprise a year earlier, in November 2022.
The firm continues to develop its Warp protocol and Station wallet, with their most recent updates released in February and March respectively.
The sales aim to “maximize value for its creditors and other stakeholders” and are part of the “broader wind-down of operations under the terms of its settlement with the SEC.”
Last month, Terraform reached a $4.5 billion settlement with the SEC, agreeing to pay nearly $3.6 billion in disgorgement, a $420 million civil penalty, and around $467 million in prejudgment interest.
In conjunction with Terraform, co-founder and former CEO Do Kwon agreed to pay $110 million in disgorgement, $14.3 million in prejudgment interest, and an $80 million civil penalty. The settlement also effectively bans Kwon and Terraform from the crypto industry, concluding the SEC’s February 2023 lawsuit accusing them of securities law violations and fraud.
Summary Review: Terraform Labs is taking significant steps to comply with its $4.5 billion settlement with the SEC by selling off four key businesses. This move is part of a broader effort to maximize value for creditors and stakeholders while winding down its operations. The agreement with the SEC also includes substantial financial penalties and effectively bans Terraform and its co-founder, Do Kwon, from the cryptocurrency industry. These actions mark the end of a tumultuous period for Terraform Labs as it seeks to close this chapter and address the repercussions of its past activities.
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