Terraform Labs CEO Chris Amani has said that the company will wind down operations following the settlement of a significant securities fraud case with the U.S. Securities and Exchange Commission (SEC).
Amani made this statement in a recent social media post while expressing gratitude to the supporters.
Amani also outlined the plans for the future of the Terra ecosystem following the resolution of its legal dispute. He noted that the company would soon post a community proposal to burn all unvested Luna tokens.
“Anything that remains vested in our wallets will be burned by TFL,”
he wrote.
Whether this dramatic reduction in supply will positively impact the long-term viability of $LUNA and $LU1NC remains uncertain.
Though the company is shutting down, Amani suggested that the Terra ecosystem might continue under community leadership. He called for community members to take over the ownership of the blockchain, hinting that several teams and developers are interested in assuming control.
“The community will need to take over ownership of the chain. I believe there are a couple teams and devs who want to do this and you should be seeing information in the forums soon,“
he added.
Terraform Labs’ legal troubles began with the collapse of its algorithmic stablecoin, Terra USD (UST), in 2022, which led to catastrophic investor losses.
Following this incident, the SEC charged Terraform and its co-founder, Do Kwon, accusing both entities of conducting unregistered transactions and committing securities fraud.
The SEC’s proposed final consent judgment, filed with the U.S. District Court for the Southern District of New York, includes $3.58 billion in disgorgement and $420 million in civil penalties. It also bars Kwon from serving as an officer or director of any public company.
In the recent court filing, the regulator emphasized that the judgement aims to provide meaningful recovery for investors and serve as a deterrent against future misconduct in the crypto industry.
Terraform Labs initially challenged the SEC’s proposed $5.3 billion fine, seeking to reduce it to $1 million, but eventually reached a settlement.
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