Terraform Labs files for bankruptcy protection

Terraform Labs filed for Chapter 11 bankruptcy in the United States according to court papers filed on Sunday and cited by Reuters on Monday.

The Singapore-based company is behind the stablecoin TerraUSD which has collapsed and roiled cryptocurrency markets in 2022.

Terraform Labs listed in the filing assets and liabilities ranging around $100-$500 million.

The company also said it would meet all financial obligations to its employees and vendors without requiring additional financing during the Chapter 11 case.

“The Terra community and ecosystem have shown unprecedented resilience in the face of adversity, and this action is necessary to allow us to continue working towards our collective goals while resolving the legal challenges that remain outstanding,” said CEO of Terraform Labs, Chris Amani.

Stablecoins are cryptocurrencies whose value is pegged, or tied, to that of another currency, commodity, or financial instrument, according to Investopedia.