Court documents reveal that the co-founder of the Terra blockchain, Do Kwon had dissolved the technological company behind the Terra blockchain, Terraform Labs. The legal documents revealed the liquidation of two South Korean offices and the dissolution of the Terraform Labs Korea corporation.
The dissolution of Terraform Labs happened in the days preceding what many are calling the fall of the Terra Blockchain, where both its native token and its programmable stablecoin, wiped off about $50 billion between themselves from the market capitalization of the cryptocurrency space. Others have gone as far as referring the situation to that of the Lehman Brothers.
This was initially reported by the South Korean news outlet, Digital Today, the information obtained from the country’s Supreme Court Registry Office highlight that Do Kwon successfully instigated the liquidation of two branches and an entire company.
What you should know
- Both the Busan headquarters and Seoul offices were agreed to be dissolved during a general shareholder meeting on April 30, with their demise being actioned on May 4 and May 6, respectively.
- The timing of these decisions has raised suspicions within the crypto community due to their potential correlation to the events of the Terra (LUNA) and UST stablecoin financial obliteration in the early hours of May 10.
- Since the collapse of LUNA and UST, many investors are still reeling from their losses. For example, Binance, which invested $3 million in Terra saw its 15 million LUNA tokens valued at $1.6 billion at peak prices. This investment is now worth $3,000
- Asides from Binance, we have seen South Korean-based venture fund, Hashed, has taken an estimated $2.9 billion loss on its Terra (LUNA) holdings, according to on-chain data.
- The crypto wallet linked to Hashed shows the firm still holds nearly 25 million LUNA, which could have netted the firm almost $3 billion if sold at the coins’ all-time high of $118 in early April.
- There is also a report that the in-house legal team at Terraform Labs resigned shortly after the collapse of Terra’s algorithmic stablecoin and its native token.
In the wake of last week’s chaos, Kwon has been promoting a plan to fork Terra to create a new blockchain, but the community seems set against the idea.