Terraform Labs Plans to Sell 4 Companies to Comply with SEC Deal

Terraform Labs, a once-prominent player in the digital asset market, is taking steps to sell off four of its key businesses. This move is part of a $4.5 billion settlement with the U.S. SEC and represents a significant shift in the company’s operations as it prepares to wind down entirely.

Terraform Labs Seeks Sale

In an announcement, Terraform Labs said it is exploring options to sell some of its businesses. These include its crypto wallet platform, Station, portfolio tracking platform, Pulsar Finance, smart contract automation tool, Warp, and the no-code DAO management platform, Enterprise.

This move comes amid efforts to comply with the terms of its settlement with the SEC. Just months after acquiring the Pulsar Finance platform in November last year, Terraform filed for Chapter 11 bankruptcy in Delaware.

Meanwhile, Enterprise, another key platform, was launched a year earlier, in November 2022. Despite its financial struggles, Terraform Labs continued to update and develop Warp and Station. The latest updates were released in February and March 2024, respectively.

The company stated that Terraform considers these planned sales an effort to maximize value for its stakeholders and creditors. The move is also part of a broader process of shutting down operations following the SEC settlement.

The $4.5 billion settlement reached last month requires Terraform to pay nearly $3.6 billion in disgorgement, around $467 million in prejudgment interest, and a $420 million civil penalty.

Co-founder and former CEO Do Kwon will also pay $110 million in disgorgement, an $80 million civil penalty, and $14.3 million in prejudgment interest.

This settlement effectively bars Kwon and Terraform from participating in the crypto industry. It also concludes the SEC’s lawsuit filed in February 2023, which accused them of securities fraud and other violations.

Terraform Labs’ Struggles

Terraform’s troubles began in May 2022 when its TerraUSD (UST) stablecoin lost its peg to the U.S. dollar. As a result, UST and the Terra Luna Classic (LUNC) cryptocurrency witnessed a near-total loss of value, with investors losing millions of dollars.

A year ago today, UST/LUNA crashed. $40 billion in value gone. BTC went from 28k to 19k. A few lessons can be learned. pic.twitter.com/h0Hyj5elx6

— CZ 🔶 BNB (@cz_binance) May 11, 2023

According to CoinGecko, the company’s current token, Terra, remains significantly devalued. It is trading at around $0.37, down 98% from its peak of $18.87 in May 2022.

As Terraform navigates its wind-down process, it has invited potential buyers to purchase its businesses and contact its investment banker, CAVU Securities.

This step is crucial for the company to fulfill its obligations to creditors and stakeholders while closing a disorderly chapter in its history.

Meanwhile, a key developer for LUNC has just finished creating an Oracle Split logic system v3.1.0. This new system will redirect rewards from the community pool tax burn to the Oracle Pool (OP) to enhance long-term staking rewards.