Following a $4.5 billion settlement with the SEC, Terraform Labs CEO Chris Amani has announced that Terra will transition into a community project. Amani emphasized the importance of the community taking ownership of the chain as the company winds down its operations. He mentioned that specific teams and developers are interested in taking over the project and will formally announce their intent on the forums.
Amani revealed that Terraform Labs had always intended to dissolve, and the settlement with the SEC has accelerated this process. While the company will continue to operate its products during the wind-down period, it plans to sell off assets such as Pulsar Finance, Station Protocol, and Enterprise Protocol. Additionally, TFL will propose burning all unvested Luna and any vested crypto held in its wallets.
The settlement between Terraform Labs and the SEC has sparked reactions from industry leaders. Coinbase CEO Paul Grewal criticized the outcome of the case, stating that it only benefits the SEC by making them an unsecured creditor. Grewal also called out Terra’s co-founder, Do Kwon, demanding the handover of $7 million in assets.
Meanwhile, Messari CEO Ryan Selkis expressed dissatisfaction with the settlement amount and argued that the funds should go towards a victims’ restitution fund rather than the SEC. Selkis even went as far as to suggest that SEC Chair Gary Gensler should face legal consequences if the funds are not allocated appropriately.
The majority of the settlement amount will go towards the SEC’s unsecured creditor’s claim. However, investors who were harmed may receive assets that Do Kwon transfers to the Liquidating Trust. The case has raised questions about the regulatory oversight of the cryptocurrency industry and the accountability of both companies and regulatory bodies.
The transition of Terraform Labs to a community project signifies a significant shift in the governance and ownership of the Terra chain. As the company winds down its operations and settles with the SEC, the focus now turns to the future of decentralized ownership and community-driven development in the blockchain space. The industry response to this settlement highlights the complexities and challenges of regulating emerging technologies and the importance of ensuring fair and just outcomes for all stakeholders involved.
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