Terraform Labs Plans to Sell 4 Main Businesses for $4.5 Billion

Bittime - Terraform Labs, a crypto company that went bankrupt, announced plans to sell its 4 main businesses for a total of $4.5 billion.  

Terraform Labs: Reason for Sale 

Sales plan This is an effort to fulfill the settlement agreement with the US SEC as well as to phase out the company's operations.

Before, Terraform Labs reached a $4.5 billion settlement with SEC. This agreement also prohibits one of its founders, Do Kwon, from participating in the crypto industry.  

At the moment, Terraform is actively exploring options to sell portfolio tracking platform Pulsar Finance, crypto wallet platform Station, no-code DAO management platform Enterprise, and smart contract automation protocol Warp.

Details of the Business Terraform Labs Will Sell

1. Pulsar Finance

   Terraform Labs acquired Pulsar Finance in November 2023, months before filing for Chapter 11 bankruptcy in Delaware in January. Pulsar Finance is a portfolio tracking platform that helps users monitor and manage their investments in crypto assets.

2. Station

   This crypto wallet platform allows users to securely store, send, and receive various digital assets. The last update to Station was in March.

3. Enterprise

   Enterprise that launched in November 2022, is a no-code DAO management platform that makes it easy to manage decentralized autonomous organizations. This platform is designed to help DAOs manage their operations more efficiently.

4. Warp

   This smart contract automation protocol is still actively being developed, with the last update taking place in February. Warp allows users to automate various functions in the smart contract ecosystem.

Efforts to Maximize Value for Creditors

The sale is part of Terraform's efforts to maximize value for creditors and other stakeholders, and is part of a broader winding down of operations under the terms of the settlement with the SEC.

Last month, Terraform agreed to pay nearly $3.6 billion in disgorgement, a civil penalty of $420 million, and about $467 million in prejudgment interest. 

Jointly with Terraform, its co-founder and former CEO, Do Kwon, agreed to pay $110 million in disgorgement, $14.3 million in prejudgment interest, and a civil penalty of $80 million.

The deal also prohibits Kwon and Terraform from operating in the crypto industry, as well as ending an SEC lawsuit in February 2023 that accused them of securities law violations and fraud.

Bankruptcy Terraform Labs

Terraform Labs is known for creating the Terra Luna Classic crypto asset (away), which is linked to an algorithmic stablecoin TerraUSD (UST), which is now called TerraClassicUSD (USTC). 

However, in May 2022, UST lost its link to the US dollar causing an inevitable death spiral for USTC price and away. Both are now down almost 100%.

The current price of the token, Terra LUNA, also showed no significant movement on this news and fell 3% in the past week to $0.37. This price is also down 98% since its peak in May 2022 of $18.87..

Sales Process by Terraform Labs

Terraform Labs invites investors interested in purchasing its business to contact its investment bank, CAVU Securities. This sale is expected to help the company fulfill its obligations to creditors and other stakeholders, as well as resolve ongoing legal issues with the SEC.

With this sale, Terraform Labs hopes to end their operations in the most profitable manner for all parties involved. 

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