Do Kwon Files Chapter 11 Bankruptcy Protection

Do Kwon, creator of TerraUSD filed for Chapter 11 bankruptcy with estimated obligations and assets between $100 million and $500 million.

Do Kwon, the owner of Terraform Labs and the creator of the now-defunct TerraUSD (UST) stablecoin has submitted a petition for protection under the United States bankruptcy code.

The company submitted a petition for protection under Chapter 11 of the United States Bankruptcy Code to the United States Bankruptcy Court for the District of Delaware on January 21.

The petition said the company claimed to have between $100 and $500 million in estimated obligations and assets. In a separate statement, Chris Amani, the Chief Executive Officer of Terraform Labs, said, “The Terra community and ecosystem have demonstrated an unprecedented level of resilience in the face of adversity.

“We have overcome significant challenges before and, against long odds, the ecosystem survived and even grew in new ways post-depeg; we look forward to the successful resolution of the outstanding legal proceedings.”

This action is necessary to allow us to continue working toward our collective goals while resolving the legal challenges that remain outstanding.”

According to the court document, the company that has since gone out of business is expected to have liabilities ranging from $100 million to $500 million and assets that are anticipated to be the same amount.

The court had scheduled Kwon’s fraud trial for March 25. Still, the United States Securities and Exchange Commission (SEC) agreed to postpone it after receiving a request from his legal team to defer the proceedings.

The bankruptcy filing comes just four days after the SEC made the decision. In May of 2022, Do Kwon’s Terra environment succumbed to destruction.

In March 2023, authorities detained the company’s co-founder Do Kwon in Montenegro for attempting to leave the country using forged travel documents, revealing his location after it had remained unknown.

This occurred shortly after the company went out of business. In February 2023, the Securities and Exchange Commission (SEC) initially brought civil accusations against Terraform Labs and Do Kwon.

Both parties were accused of a “multi-billion dollar crypto asset securities fraud” connected to the tokens formerly known as UST and Terra (LUNA).

The United States of America and South Korea are both attempting to extradite Kwon. The attention on the possibility of Kwon receiving multiple prison sentences in both nations has been increasing.

If Kwon is deported to South Korea, the nation where he is believed to have committed the majority of his offenses, he may face a forty-year prison sentence.