Deniz 
Reporting from Reuters indicates that another chapter closed for Terraform Labs following the company’s bankruptcy court clearance of closure of operations.
According to Terraform, the company behind the well-known algorithmic stablecoin Terra, bankruptcy will pay around $184.5 million and $442.2 million to stakeholders.
The company’s case was taken before the U.S. Securities and Exchange Commission; its wind-down follows Terraform closing another chapter.
Over the algorithmic stablecoin Terra USD (UST), which failed a year earlier, the SEC prosecuted Terraform and co-founder Do Kwon in February 2023. The government claimed the company misled and stole from investors. Both sides were haggling over minute details before the conclusion. While the SEC has requested they pay $5.3 billion, lawyers for Terraform and Kwon claimed fines should be closer to $1 million.
Terraform Labs agreed to pay fines to the U.S. District Court for the Southern District of New York totaling $4.7 billion in June. Terraform promised to pay $3.58 billion in disgorgement, $420 million in a civil penalty, and would prevent Kwon from serving as an officer or director of any public company as part of the deal.
As part of the bankruptcy process, the SEC stated it would obtain its claim once creditors were paid.
“Under the liquidation terms of the Chapter 11 Plan that Terraform is required to propose, the SEC will recover on its claim after harmed investors and other general unsecured creditors recover in full. If all Terraform’s assets are distributed pursuant to such a plan, the SEC’s monetary remedies will be deemed satisfied,” the agency stated in June’s settlement papers.
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