The firm’s CEO Chris Amani says bankruptcy protections could help appeal the suit brought against it by the SEC, effectively eliminating “the single largest claim against it.”
Terraform Labs says its decision to file for bankruptcy will aid it in pursuing an appeal of the lawsuit it faces from the United States Securities and Exchange Commission.
In a Jan. 30 filing to a Delaware Bankruptcy Court, Terraform Labs CEO Chris Amani wrote its Chapter 11 bankruptcy was critical to successfully appealing its case with the SEC. The firm — which created the now-defunct stablecoin TerraClassicUSD (USTC) — filed for bankruptcy on Jan. 21.
An appeal against the SEC would typically require Terraform Labs to front up a “supersedeas bond” of 110% of the total judgment before it could proceed. However, Chapter 11 bankruptcy protections could allow the firm to lodge an appeal without needing to post the bond.
