Terraform Labs Sells Four Companies in Bankruptcy Proceedings
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Terraform Labs Sells Four Companies in Bankruptcy Proceedings

Terraform Labs intends to dispose of Pulsar, Station, Warp, and Enterprise.

Terraform Labs, the company behind the collapsed Terra blockchain, is set to sell four of its businesses in Chapter 11 bankruptcy proceedings.

On July 9, the company announced that it was looking for a buyer for Pulsar Finance, a cross-chain wallet tracker that the company acquired in November 2023 in a bid to rebuild the ecosystem after its collapse. Terraform Labs (TFL) is also looking to sell Station, a non-custodial hot wallet based on Cosmos, Enterprise, a codeless DAO governance platform, and Warp, an on-chain automation protocol for executing smart contracts.

“The sale process represents a significant step in TFL’s efforts to maximize value for its creditors and other stakeholders as part of a broader winding-down of its business,” Terraform Labs said. “This sale is part of a broader winding-down of TFL’s business under the terms of a settlement with the U.S. Securities and Exchange Commission.”

The news did not move LUNA, the native token of the Terra 2.0 network, which posted a modest daily gain of 1.4%, in line with the broader cryptocurrency markets. However, LUNA is down 34% over the past 30 days to a market capitalization of $263 million — roughly where it was in November 2023 when TFL acquired Pulsar Finance.

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LUNA/USD. Source: CoinGecko.

In April 2022, during its heyday, TFL’s Layer 1 network, Terra Classic, boasted over $31.3 billion in total value locked (TVL), bringing the market capitalization of the Luna Classic (LUNC) token to $41 billion.

Its impressive rise was fueled by the massive success of the unsecured “algorithmic” stablecoin UST, which saw its market capitalization reach over $18.7 billion on the promise of a 20% annual return to holders.

However, in early May, Terra Classic and UST lost over 97% of their value in just a few days, amid a sudden loss of confidence in the unsecured UST project. According to DefiLlama, only $2.15 million remains on the network today.

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Terra Classic TVL. Source: DeFi Llama.

Terraform Labs filed for bankruptcy in the United States in January. In April, TFL co-founder Do Kwon and his company were found liable for orchestrating a $40 billion fraud. Do Kwon was also convicted of misleading investors and acting recklessly.

In early June, Terraform settled with the U.S. Securities and Exchange Commission for $4.47 billion, of which about $400 million came from Do Kwon.

Related: How Terra is trying to rise from the ashes with new Terraform Labs CEO Chris Amani