Terraform Labs and Dentons Legal Conflict

【Hi! Crypto grapevine is here] Recently, the U.S. Securities and Exchange Commission (SEC) expressed strong dissatisfaction with the upfront payment of up to $166 million paid by Terraform Labs to the law firm Dentons. The SEC argued that the bankruptcy-filing cryptocurrency company should not be allowed to hire Dentons or pay its employees’ legal costs while in bankruptcy.Terraform Labs, the company behind the LUNA and TerraUSD (UST) cryptocurrencies, has filed for voluntary Chapter 11 bankruptcy protection in Delaware. The SEC also noted that Terraform Labs paid $122 million into Dentons' senior payment bond in the 90 days before the bankruptcy filing, funds that could have been used to repay the company's creditors. This creates a potential conflict of interest between Terraform Labs and Dentons.The SEC said the law firm should not be allowed to represent Terraform Labs and its fees would be subject to bankruptcy court oversight unless it returns the $81 million remaining in the margin account. Terraform Labs petitioned the bankruptcy court for permission to retain special litigation counsel and requested that $6.3 million in legal fees be distributed among employees and outside partners facing the lawsuit.Terraform Labs' bankruptcy filing is intended to allow the company to continue executing on its business plan while facing legal proceedings in a securities fraud case brought by the SEC. Terraform Labs co-founder Do Kwon is currently serving a prison sentence in Montenegro, awaiting extradition to the United States to face a civil fraud lawsuit from the SEC and criminal charges from the U.S. Attorney's Office for the Southern District of New York.What do you think of this incident? Welcome to speak freely in the comment area and discuss together!

热点： LABS TERRAFORM