Terraform Labs has decided to cease operations after reaching a $4.47 billion settlement with the SEC. As part of this decision, control of the Terra blockchain is being handed over to the community.
Chris Amani, CEO of Terraform Labs, has stated that the company will shut down its operations after reaching a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC).
Terraform Labs Ceases Operations and Transfers Control of Terra Blockchain
Chris Amani, CEO of Terraform Labs, has announced the company’s decision to cease operations following a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC). As part of this decision, Terraform Labs plans to sell off key projects within the Terra ecosystem and transfer control of the Terra blockchain to the community.
Amani explained, “[Terraform Labs] always intended to dissolve at some point and that point is now. We will be winding down operations completely […] We were well positioned to accelerate things if we had won the trial, but unfortunately, we lost and as a result, can no longer operate.”
Source: Chris Amani
The decision to dissolve Terraform Labs comes after the SEC’s settlement regarding the collapse of the algorithmic stablecoin UST in 2022, which includes a substantial $3.58 billion disgorgement and a civil penalty of $420 million.
Taking over from Do Kwon in July 2023, Amani also confirmed plans to burn both unvested and vested holdings of Terra (LUNA) tokens. He stated, ” @evan_docs will shortly post a community proposal to burn all of [Terraform Labs’] unvested Luna. Anything that remains vested in our wallets will be burned by [Terraform Labs].”
Terraform Labs Ceases Operations: Community Governance and Market Impact
Chris Amani, CEO of Terraform Labs, announced plans for the company to wind down operations following a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC). Amani emphasized a community-led governance approach for the Terra and Terra Classic (LUNC) blockchains, highlighting a proposal to burn remaining vested tokens.
Source: Chris Amani
The decision to transition control to the community has sparked varied reactions among Terra supporters. While many are optimistic about the shift towards community governance, others have voiced criticism of past leadership decisions. One community member’s response on social media particularly criticized Amani’s decision.
Source: RedlineDrifter
Following Terraform Labs’ announcement, the prices of LUNA and LUNC tokens have experienced declines of 5% and 2% respectively over the past 24 hours.
The $4.47 billion SEC settlement marks a significant regulatory milestone in the cryptocurrency industry, underscoring the importance of regulatory compliance and robust governance frameworks in the sector.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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