Chris Amani, the CEO of Terraform Labs, has officially announced the company’s decision to shut down operations in light of a $4.47 billion settlement with the United States Securities and Exchange Commission (SEC).
As part of the closure, Terraform Labs intends to sell off key projects within the Terra ecosystem and hand over control of the Terra (LUNA) blockchain to the community.
The decision to dissolve Terraform Labs comes after the SEC’s settlement related to the collapse of the algorithmic stablecoin UST in 2022. The settlement includes a hefty $3.58 billion disgorgement and a $420 million civil penalty.
Taking the helm from Do Kwon in July 2023, Amani has confirmed the company’s plans to wind down operations and burn both unvested and vested holdings.
In addition to this, Amani has proposed a community-led initiative to burn remaining vested tokens and implement community governance for both the Terra and Terra Classic (LUNC) blockchains.
The announcement of community-led governance sparked mixed reactions among community members, with some expressing optimism while others criticized past leadership. One community member’s response to Amani’s announcement on X post stood out as a stark critique of the decision.
Following Terraform Labs’ decision to dissolve, the prices of LUNA and LUNC have dropped by 5% and 2% respectively in the last 24 hours. The $4.47 billion SEC settlement marks a significant regulatory milestone in the crypto space, emphasizing the importance of regulatory compliance and governance.
In other news, SocialFi is boosting game revenue, while the creator of Axie Infinity is looking to move away from Discord in the Web3 gaming community.