Chris Amani, the CEO of Terraform Labs, has made an announcement about the company’s decision to shut down operations after reaching a $4.47 billion settlement with the United States Securities and Exchange Commission.
As part of the closure, the company intends to sell off key projects within the Terra ecosystem and transfer control of the Terra blockchain to the community.
The dissolution of Terraform Labs comes in the wake of the historic collapse of the algorithmic stablecoin TerraUSD (UST) in 2022, leading to the hefty settlement with the SEC. This settlement includes a disgorgement of $3.58 billion and a civil penalty of $420 million.
Taking the reins from Do Kwon in July 2023, Amani has confirmed the decision to wind down operations and burn both unvested and vested holdings.
In addition to this, Amani has outlined plans for a community proposal to burn the remaining vested tokens and emphasized the importance of community-led governance for the Terra and Terra Classic blockchains.
The community response to this shift in leadership has been mixed, with some members expressing optimism while others critique the decisions made by past leadership. While most are in support of the move towards Terra Classic, one community member’s response to Amani’s announcement was particularly critical.
Following the announcement of Terraform Labs’ dissolution, the prices of LUNA and LUNC have dropped by 5% and 2% respectively in the last 24 hours. This significant settlement with the SEC not only impacts the market but also sets a regulatory precedent for the cryptocurrency space, emphasizing the need for regulatory compliance and governance.
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