The recent $4.5 billion SEC settlement has led Terraform Labs CEO Chris Amani to announce that Terra will transition into a community project. Amani emphasized the need for the community to “take over ownership of the chain” as the company begins to wind down its operations. Despite stating that Terraform Labs had always intended to dissolve, Amani highlighted that the company would continue to operate its products during the wind-down period.
As part of the wind-down process, Terraform Labs will be selling off products such as Pulsar Finance, Station Protocol, and Enterprise Protocol. Additionally, Amani revealed that TFL will be proposing to burn all unvested Luna and any vested crypto held in its wallets. This move signifies a clean break as the company moves towards its dissolution.
The settlement between Terraform Labs and the SEC has not gone unnoticed within the industry. Coinbase CEO Paul Grewal criticized the outcome, claiming that it only benefits the SEC by making them an unsecured creditor. Grewal also called for assets from Terra’s co-founder and former CEO, Do Kwon, to be handed over as part of the settlement.
Meanwhile, Messari CEO Ryan Selkis condemned the settlement amount, suggesting that the funds should go towards a victims’ restitution fund rather than the SEC. Selkis went as far as to say that any other outcome should result in SEC Chair Gary Gensler facing serious consequences.
The majority of the settlement amount will go towards the SEC’s unsecured creditor claim, leaving harmed investors to receive assets that Kwon transfers to the Liquidating Trust. The fallout from the settlement has raised concerns within the industry about the regulatory oversight and the implications for future projects in the blockchain space.
The transition of Terra from a company-led project to a community-driven initiative marks a significant shift in the blockchain industry. The fallout from the SEC settlement has sparked debates about regulatory practices and investor protection. As Terraform Labs paves the way for a new chapter, the impact of this move on the broader ecosystem remains to be seen.