Terraform Labs has filed for bankruptcy with a court in the US state of Delaware, seeking creditor protection under Chapter 11 of the US Bankruptcy Code.

The USA accused Do Kwon, the developer of "Terra Luna" and "TerraUSD" cryptocurrencies, and his company Terraform Labs, of "planning a multi-billion dollar crypto asset securities fraud".

31-year-old Kwon, who was wanted on a red notice, was arrested in Montenegro last year, and the USA and South Korea requested his extradition.

Kwon is also accused of fraud and violating capital markets law in his home country of South Korea.

This means that no matter how high a coin rises, if its founder does not create a solid ecosystem, they will find a vulnerability and destroy it. Be careful when investing.