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Terraform Labs announced that it might receive a court order to halt certain operations following a request by the US Securities and Exchange Commission (SEC) to restrict the company’s activities. The company will limit access to specific products and services for US-based users.
Blockchain Giant Terraform Labs Takes Steps for US Users
Blockchain giant Terraform Labs stated on Thursday that it expects a court decision soon in its legal battle against the SEC, and will restrict access to some services for US-based users. The cryptocurrency LUNA has recorded a 2.25% drop since Monday.
Terraform Labs recently announced that it has decided to change liquidity provision and access to Terraform Labs (TFL) products in certain jurisdictions.
It is known that the SEC has filed enforcement actions against Terraform Labs and its founder Do Kwon, demanding a $5.3 billion fine due to the firm’s role in the $40 billion collapse of the Terra ecosystem in 2022.
Company States It Has No Other Choice
Terraform Labs warned that the court might impose a “behavior-focused preliminary injunction,” and will restrict access to some products and features for US-based users in the coming weeks.
The company expressed opposition to geographical blocking but stated it has no other option under current conditions. It emphasized that open-source projects like Terra Blockchain and Alliance will not be affected.
Terraform Labs also announced that it will withdraw liquidity from its positions as required by the court order starting April 26. This withdrawn LUNA will be held in a multisig wallet during bankruptcy proceedings.
Current Status of LUNA Price
This week, we see the cryptocurrency LUNA trading at $0.6245, down 2.25%. LUNA inevitably experiences fluctuations during this turbulent period. The price had risen to $1.55 in March, but subsequently, there has been a decline of over 60% in LUNA’s price due to the downturn in the cryptocurrency world and the ongoing legal process mentioned above.
The cryptocurrency LUNA’s price is far from its $10 peak. The ongoing lawsuit with the SEC could make recovery difficult for LUNA’s price. This situation inevitably poses a risky scenario for investors waiting for a turnaround in LUNA’s price.
