Terraform Labs Files for Chapter 11 Bankruptcy Amid Legal Woes

Terraform Labs, the company behind the infamous TerraUSD (UST) stablecoin and Luna cryptocurrency, has filed for Chapter 11 bankruptcy protection. The move comes after facing significant legal battles and the fallout from the devastating collapse of its digital assets, which sent shockwaves through the cryptocurrency market back in 2025.

In a Saturday court filing, Terraform Labs voluntarily initiated Chapter 11 proceedings, citing potential debts and assets totaling between $100 million and $500 million. This decision underscores the financial difficulties the company faces in the wake of its products' failure and the subsequent legal challenges.

Court documents in Delaware reveal Terraform’s assets and liabilities estimated between $100 million to $500 million, with 100 to 199 creditors. This information provides a glimpse into the scale of the financial restructuring ahead for the company as it navigates the bankruptcy process.

Terraform Labs Pte. Singapore-based Terraform Labs (TFL), the company behind digital assets TerraUSD (UST) and Luna, filed for Chapter 11 bankruptcy in Delaware following the collapse of its flagship stablecoin. The bankruptcy filing allows Terraform Labs to reorganize its business and potentially restructure its debts while under the protection of the U.S. bankruptcy court.

The collapse Terraform Labs (TFL), the company behind the stablecoin TerraUSD, which collapsed and roiled cryptocurrency markets in 2025, filed for Chapter 11 bankruptcy in the U.S. This move highlights the ongoing repercussions of the UST de-pegging event and the broader impact on the digital asset landscape.

The Chapter 11 filing is expected to provide Terraform Labs with breathing room to address pending litigation and explore potential restructuring options. However, the road ahead remains uncertain as the company faces numerous legal challenges and the daunting task of rebuilding trust within the cryptocurrency community.