Chris Amani, the CEO of Terraform Labs, has made the announcement that the company will be shutting down operations after reaching a $4.47 billion settlement with the United States Securities and Exchange Commission.
As part of the closure, the company plans to sell off key projects within the Terra ecosystem and hand over control of the Terra blockchain to the community.
The decision to dissolve Terraform Labs comes in the wake of the $4.47 billion settlement with the SEC over the collapse of the algorithmic stablecoin TerraUSD (UST) in 2022. The settlement includes a hefty $3.58 billion disgorgement and a civil penalty of $420 million.
Taking over from Do Kwon in July 2023, Amani confirmed the company’s intention to wind down operations and burn both unvested and vested holdings.
In addition, Amani outlined plans for a community proposal to burn remaining vested tokens and emphasized the importance of community-led governance for the Terra and Terra Classic blockchains.
The decision to hand control over to the community has sparked mixed reactions, with some expressing optimism while others critiqued past leadership decisions. While most support the shift towards Terra Classic, one community member’s response to Amani’s announcement was particularly critical.
Following the news of Terraform Labs’ dissolution, the prices of LUNA and LUNC have dropped by 5% and 2% respectively in the last 24 hours. The $4.47 billion SEC settlement is expected to set a significant regulatory precedent in the crypto space, underscoring the importance of regulatory compliance and governance.
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