Terraform Labs CEO Chris Amani said Terra will become a community project as the company winds down following a $4.5 billion SEC settlement.
Amani wrote on June 12 that the community must “take over ownership of the chain.” He said that certain teams and developers want to handle the project and will announce their intent on the forums.
Amani added that Terraform Labs “always intended to dissolve” and can now do so.
He said the company was “well positioned to accelerate” if it had won the SEC case but no longer can operate because it lost the trial.
Terraform Labs will continue to operate its products during the wind-down period.
The company will sell Pulsar Finance, a cross-chain portfolio manager it acquired in late 2023, and two other products, Station Protocol and Enterprise Protocol.
Additionally, Amani announced that TFL will post a proposal to burn all of its unvested Luna. The firm will also propose to burn any vested crypto that it holds in its wallets.
Coinbase CLO slams settlement
The settlement has attracted attention elsewhere in the industry. Coinbase CEO Paul Grewal criticized the case’s outcome and highlighted its benefits for the SEC.
Grewal said the outcome “just makes the SEC an unsecured creditor,” meaning the agency will receive funds through Terraform Labs’ bankruptcy case. He added that the firm orders Terra’s co-founder and former CEO Do Kwon to “hand over $7 million of assets.”
Grewal said:
“It’s predictably on-brand … There’s zero meaningful relief to fraud victims. This is no way to regulate.”
Meanwhile, Messari CEO Ryan Selkis also denounced the settlement amount and said it should go to a victims’ restitution fund over the SEC. He added that any other outcome should result in SEC Chair Gary Gary Gensler going “to prison for the rest of his life.”
The SEC’s unsecured creditor’s claim concerns the majority of the settlement amount. However, harmed investors will receive certain assets that Kwon transfers to the Liquidating Trust.
