Terraform Labs, the Singapore-based company behind the Terra blockchain and its native cryptocurrency LUNA, has filed for Chapter 11 bankruptcy protection in the United States. 

Terraform Labs’ bankruptcy filing shows up to US$500 million in estimated liabilities and assets. 

Founded by Kwon Do-hyung, a South Korean national better known as Do Kwon, Terraform Labs has been at the center of a media firestorm following the collapse of its stablecoin, UST, in May 2022. 

Terraform Labs saw its TerraUSD (UST) stablecoin and Luna cryptocurrency lose nearly all their value in the collapse, which drew attention to the inherent risks in algorithmic stablecoins, which TerraUSD was.

This event triggered billions of dollars in investor losses and led to the bankruptcies of high-profile cryptocurrency firms, including Celsius Network and Three Arrows Capital.

Kwon was arrested in a Montenegro airport last March when he attempted to board a flight to Dubai with a fake passport. 

Kwon has been charged with fraud by the U.S. authorities. The Securities and Exchange Commission has agreed to delay Kwon’s trial to March 25, giving the Terra founder more time to be extradited to the U.S.