Terraform Labs CEO Chris Amani announced on June 12 that Terra will transition into a community-driven project as the company winds down operations following a $4.5 billion SEC settlement.

Amani stated that the community will assume ownership of the chain, with specific teams and developers expressing interest in taking over the project and planning to declare their intentions on forums.

He mentioned that Terraform Labs had always planned to dissolve and now has the opportunity to do so. Amani regretted that the company cannot continue operations after losing the SEC trial, noting it was poised for acceleration if the case had been won.

During the wind-down phase, Terraform Labs will maintain its product operations. The company intends to sell Pulsar Finance, acquired in late 2023, along with Station Protocol and Enterprise Protocol.

Additionally, Amani disclosed plans for Terraform Labs to propose burning all its unvested Luna tokens and any vested crypto held in its wallets.

Elsewhere in the industry, Coinbase CEO Paul Grewal criticized the settlement's outcome, emphasizing its advantages for the SEC. He criticized the lack of meaningful relief for fraud victims, describing the SEC's role as that of an unsecured creditor benefiting from funds in Terraform Labs' bankruptcy proceedings. Grewal also highlighted the directive for Terra’s co-founder and former CEO Do Kwon to relinquish $7 million in assets.

In response, Messari CEO Ryan Selkis criticized the settlement amount, advocating that it should prioritize a restitution fund for victims rather than benefiting the SEC. He expressed strong disapproval, suggesting severe consequences for SEC Chair Gary Gensler if outcomes differed.

The SEC’s claim as an unsecured creditor pertains to the majority of the settlement funds, while affected investors will receive certain assets transferred to the Liquidating Trust by Kwon.