- Terraform Labs received court approval to wind down its operations following a bankruptcy court- hearing leading to price rallies for both LUNA and LUNC.
- The payout is estimated to range between $184.5 million and $442.2 million.
Terraform Labs, the once-prominent blockchain behind the Terra ecosystem, has received a green flag to wind down operations following a recent bankruptcy hearing. This is a significant chapter for the firm’s journey which has been anything but smooth since the catastrophic collapse of TerraUSD and LUNA in 2022.
As a leading news outlet reported, the court’s decision follows an agreement to settle with the U.S. Securities and Exchange Commission . Notably, the court’s decision has ignited a surge in both LUNA and LUNC’s market prices.
In a recent court hearing officiated over by Judge Brendan Shannon in Wilmington, Delaware, in what was termed as a “welcome alternative”, Terraform Labs was approved to liquidate all its assets and close its operations. In essence, the approval would enable the company to initiate the liquidation of its remaining assets. This process is expected to result in a payout to investors and other stakeholders ranging from $184.5 million to $442.2 million.
Backtracking, the U.S. SEC accused Terraform Labs and its founder, DO Kwon, of defrauding Singapore and other investors which led to the well-remembered Terra Ecosystem collapse which wiped approximately $40 billion in market value. Additionally, Terraform co-founder Do Kwon was also ordered to pay $110 million as part of a settlement agreement and an additional $14.3 million in prejudgment interest.
In light of the collapse, the liquidation approved by the court will see the company initiating its compensation period to investors who were affected in the crash. News has it that the payout is estimated to range between $184.5 million and $442.2 million. However, A blotch of darkness mars the scene; the company has stated that it is “impossible to estimate” at this point.
The SEC is on the brink of gaining something or nothing; this comes after Terraform Labs agreed to settle the SEC lawsuit for $4.47 billion. However, according to the SEC, the agency will only collect its portion of the settlement after the affected investors have been compensated through liquidation.
LUNC and LUNA Prices Surge
The Terraform Labs Liquidation news has had a positive impact on the tokens’ sentiment, and both LUNA and LUNC have witnessed noble price rallies. At the time of writing, LUNC is swapping hands with $0.00008762, marking a 2.63% and a 4.01% surge in the last 24 hours and past week, respectively. Additionally, its trading volume has also spiked by 41.29%. On the other hand, LUNA underwent a 1.63%, leaving its price hovering around the $0.3971 mark.
CoinGlass data also revealed that the Futures Open Interest for both LUNA and LUNC surged by 27% and 28%, indicating growing confidence among traders.
