Bankruptcy could force Terraform Labs to wind down its operations, leading to the closure of its products and services.
Following its June settlement with the SEC, Terraform Labs plans to close multiple services by October 30 unless third parties take over.
Terraform Labs stated on X on September 25 that it will shut down various products and services on October 30 unless third parties take over.
Terraform is conducting the selloff as part of its wind-down after settling with the SEC in June.
According to Terraform, it is “continuing progress with 3rd party discussions,” but the conversations are not going as planned; the tweet reminds both the Terraform community and prospective buyers that they have limited time to act.
Terraform outlined four services and four products under consideration, listing the Luna Foundation Guard, which Do Kwon directs, along with the blockchain explorer and its API services.
Terraform CEO Chris Amani announced the planned takeovers on June 12, after the company reached its settlement with the SEC, indicating that these plans have been in progress for a while.
“I’m incredibly proud that we were able to hold this company and ecosystem together and continue to build innovative products through all of this. We were well positioned to accelerate things if we had won the trial, but unfortunately, we lost and as a result, can no longer operate.”
Some responsibility for adhering to the bankruptcy terms may fall on the Terraform community.
“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,” Amani said in June.
Logically, the community will step in to manage the network’s basic services.
As part of the Terraform bankruptcy plan, the company turned off the Pisco testnet APIs in early September.
The omission of Pulsar Finance from the list of products for sale suggests it may already have a buyer, although the company referenced its sale back in June.
Terraform submitted its bankruptcy filing in January in the U.S. and reached a settlement with the SEC in June, agreeing to pay $4.47 billion, which includes disgorgement, penalties, and interest.
A Delaware judge sanctioned the Terraform bankruptcy plan on September 20.
