Terraform Labs CEO Chris Amani declared in a court filing that the company is not built to currently generate profits, amid citing previous crypto collapses to support its case.
Amani asserted in the court filing that opting for bankruptcy enables the company to emerge stronger in the crypto industry.
Terraform Labs: Prioritizing Growth Over Profits
In a recent court filing, Amani asserted that Terraform Labs had been channeling all its earnings back into the company, aiming to foster its growth. The primary goal in the initial years was not profit.
“In fact, the Debtor does not currently operate to gain profits; all revenue earned is expected to be reinvested in the business and the Terra blockchain ecosystem.”
Furthermore, Amani declared that entering bankruptcy positions Terraform Labs to bounce back and re-enter the crypto industry more robustly than before.
“By utilizing the Chapter 11 process and the tools made available by the Bankruptcy Code, the Debtor hopes to emerge as a reorganized and stronger enterprise for the benefit of all of its stakeholders.”
Terra Luna Classic (LUNC), Terraform Labs’s native token, has been declining in recent times, dropping around 29% over the last 30 days.
At the time of publication, LUNC price stands at $0.00009777.
Last week, on January 22, BeInCrypto reported that Terraform Labs filed for Chapter 11 bankruptcy protection in the United States District of Delaware.
Read more: 11 Best Altcoin Exchanges for Crypto Trading in January 2024
Terraform Labs Surprise Bankruptcy Declaration
This comes amid its founder, Do Kwon, facing legal challenges and currently in extradition custody in Montenegro, urging the United States court to postpone his January trial, seeking the opportunity to attend the proceedings in person.
The US SEC agreed to postpone the original January 29 court date until April.
However, the crypto community speculated that Terraform Labs was improving its reputation following its collapse.
Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell
The Terra ecosystem’s collapse in May 2022 had a profound impact. It caused ripple effects throughout the crypto industry and led to the downfall of numerous other crypto firms that year.
In July 2023, BeInCrypto reported that Terraform Labs had appointed Chris Amani as the new interim CEO.
Formerly holding the positions of COO and CFO, Amani was tasked with rebuilding Terraform Labs and its reputation.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Credit: Source link
