Terraform Labs Faces Financial Pressure, Plans to Sell Four Subsidiaries to Pay Off Hefty Fine

The development team behind the Terra ecosystem urgently needs to raise funds. Last month, Terraform Labs was slapped with a nearly $4.5 billion fine

Terraform Labs, the company behind the failed Terra (LUNA) blockchain, will sell four of its subsidiaries to pay for a hefty fine from a US court.

According to a recent report, Terraform Labs is facing financial pressure and urgently needs to raise funds. Last month, a US court slapped the company with a nearly $4.5 billion fine for its role in the collapse of the Terra ecosystem, putting a significant strain on its finances.

To gather the necessary funds, Terraform Labs, led by Do Kwon who was also convicted of fraud, will sell four of its companies. The names of these companies have not been disclosed.

There is no word yet on potential buyers or the expected prices for these companies. This move does, however, highlight the financial challenges that Terraform Labs is currently facing.

The Terra ecosystem was once a leading player in the crypto world, with its stablecoin UST and the linked cryptocurrency LUNA gaining significant popularity among investors. However, in May 2022, UST collapsed, dragging LUNA down with it in an event that wiped out nearly $40 billion and is widely seen as the trigger for the crypto winter.