Terraform Labs says bankruptcy filing provides appeal window for securities fraud cases
Terraform Labs stated that the recent bankruptcy filing will provide an opportunity for its "all-or-nothing" appeal in the securities fraud case filed with the US Securities and Exchange Commission.Last December, a judge ruled that Terraform Labs and its founder had not registered two digital currencies, violating US law and causing turbulence in the cryptocurrency market. Although the case is scheduled for trial on remaining fraud charges in March, Terraform Labs stated in bankruptcy court documents that the company may not be able to pay the undetermined judgment amount or appeal.The company owns approximately $28 million in Bitcoin, $7 million in other cryptocurrencies, and $87 million in Luna tokens.Terraform Labs plans to argue in the appeal that the SEC has no authority to interfere with the company, as its cryptocurrency tokens are not "securities." The company stated that Chapter 11 bankruptcy may allow it to appeal without paying a bond, avoiding liquidation after the trial.
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