Terraform Labs, a bankrupt crypto firm, is planning to sell four of its businesses as part of a $4.5 billion deal with the SEC. The businesses include Pulsar Finance, Station, Enterprise, and Warp. Despite financial difficulties, Terraform Labs is continuing to develop the Warp protocol and Station wallet. The sale of these businesses is part of the company’s strategy to maximize value for its creditors and stakeholders in compliance with the terms of its settlement with the SEC.
The collapse of Terra caused a significant loss in the crypto ecosystem, wiping out nearly $40 billion from the market and leading to the downfall of several crypto hedge funds that had collateralized the firm. In April 2024, Terraform Labs and co-founder Do Kwon were found guilty of defrauding investors in a civil case brought by the SEC. Terra’s current token, trading at $0.37, has declined significantly from its peak of $18.87 in May 2022. Interested buyers are invited to contact CAVU Securities, Terraform’s investment banker, regarding the potential acquisition of its businesses.
Last month, U.S. District Court Judge Jed Rakoff approved a settlement requiring Terraform Labs and Kwon to pay $4.5 billion in disgorgement and civil penalties. They will also be permanently banned from engaging in transactions involving “crypto asset securities.” The settlement follows initial SEC proposals of a $5.3 billion penalty, which Terraform Labs contested, advocating for a maximum fine of $1 million. Legal representatives for Kwon and Terraform Labs agreed to the SEC’s revised settlement offer of $4.5 billion on June 6.
Kwon, currently in custody in Montenegro awaiting a decision on his extradition, did not attend the trial where the settlement was reached. Terraform Labs, under Chapter 11 bankruptcy protection, faces the challenge of fulfilling the substantial financial obligations imposed by the settlement. The company’s CEO, Chris Amani, testified during the trial that Terraform Labs has approximately $150 million in assets. The announcement of the sale did not significantly impact Terra’s token price, which continues to trade at $0.37, reflecting a substantial decline from its peak value.
Despite the challenges faced by Terraform Labs, the company continues to work on the development of the Warp protocol and Station wallet. The sale of its businesses is seen as a strategic move to maximize value for creditors and stakeholders in line with the terms of the SEC settlement. Interested buyers looking to acquire Pulsar Finance, Station, Enterprise, or Warp can reach out to CAVU Securities, Terraform’s investment banker, for further details. Judge Jed Rakoff’s approval of the $4.5 billion settlement between Terraform Labs, Do Kwon, and the SEC marks a significant step in addressing the legal consequences of the firm’s actions.
