Terraform Labs (TFL) has announced changes to its operations April 25 in light of a recent court decision regarding the SEC’s case against the company.
TFL said it expects to soon receive a conduct order that will ban the company from conducting certain activities in the US. The company added that it will prepare for the order by blocking US users from accessing certain products and features starting the week of April 28.
TFL called the development “frustrating” and said it is “against geo-blocking on principle” but has no choice but to adapt.
The policy change does not affect some projects, including Alliance, an open-source Cosmos SDK module, and the Terra blockchain itself.
Liquidity closures
TFL must also withdraw liquidity from positions on various platforms due to the order
The company said it will start withdrawing liquidity worth $23.8 million on April 26 across three platforms – Astroport, Ura and White Whale. Each position is a LUNA pair.
Terraform Labs said it would store the revoked LUNA tokens in a multisig account during the bankruptcy proceedings.
SEC requested injunctions
The SEC filed charges against Terraform Labs in February 2023. The trial began in March and a jury found Terra and its former CEO, Do Kwon, liable for fraud in early April.
The SEC requested several injunctions against the defendants on April 19.
Specifically, the SEC requested restrictions on any party’s ability to buy, offer, and sell crypto assets – including but not limited to LUNA. The SEC also said the defendants should be prohibited from involving other parties in such transactions.
The SEC also sought monetary penalties and fines totaling $5.3 billion
Terraform remains active and offers certain products despite the bankruptcy and collapse of its stablecoin, TerraUSD, which broke away from the dollar in May 2022.
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