In a surprising move, Terraform Labs, the developer of the Terra LUNA blockchain, has announced plans to dissolve its operations. Chris Amani, the CEO of Terraform Labs, has urged the community to take over the reins of the Terra network, signaling the end of the company’s direct involvement with the project.
The Dissolution of Terraform Labs
Amani stated that Terraform Labs “always intended to dissolve at some point, and that point is now.” The firm plans to sell off its projects within the Terra ecosystem, including Pulsar Finance, Station Wallet, and Enterprise DAO. This decision follows Terraform’s massive $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC) related to the controversial collapse of the UST algorithmic stablecoin in 2022.
“TFL always intended to dissolve at some point, and that point is now,” Amani stated on X, formerly known as Twitter. “We will be winding down operations completely.”
2/ TFL always intended to dissolve at some point and that point is now. We will be winding down operations completely. Special thanks to the lunatics who supported us through this process and thanks to the TFL team. I’m incredibly proud that we were able to hold this company…
— Chris Amani | Terra (@fleece_cannon) June 12, 2024
Community-Led Governance
Amani emphasized that the community will need to take over the ownership and governance of the Terra and Terra Classic blockchains. He suggested a community-led model that could redefine how blockchain projects operate in the aftermath of such a crisis.
“The community will need to take over ownership of the chain,” Amani stated, indicating a shift towards a more decentralized approach to the project’s future.
Burning of Unvested Luna
As part of the dissolution process, Amani said that Terraform Labs plans to burn all unvested Luna, the native token of the Terra blockchain. He affirmed that “anything that remains vested in our wallets will be burned by TFL,” committing to a decisive end to the company’s direct involvement with the token.
The SEC Settlement
The SEC’s initial charges against Terraform and its co-founder, Do Kwon, in February 2023 accused the company of misleading investors and violating federal securities laws through fraudulent activities related to the sale of unregistered securities.
The proposed $4.47 billion settlement includes $3.58 billion in disgorgement and a $420 million civil penalty. Additionally, Kwon is prohibited from serving as an officer or director of any public company and is required to contribute about $204 million to a bankruptcy estate for Terraform aimed at compensating the investors harmed by the scheme.
Amani, who took over from Kwon as Terraform’s CEO in July 2023, now faces the task of winding down the company’s operations and handing over the reins to the community.
