Terraform Labs, the company behind the infamous collapse of the Luna token and the TerraUSD stablecoin, is taking steps to facilitate the recovery of losses incurred by investors. On March 31, the firm will launch a dedicated portal that will allow affected parties to file claims related to their crypto losses as part of the ongoing bankruptcy proceedings.
This portal will be operated by Kroll, a claims administrator appointed to manage the claims process in line with the court’s wind-down order. Investors have until April 30 at 11:59 p.m. ET to submit their claims via claims.terra.money. It is crucial for claimants to adhere to this timeline, as late submissions will not be accepted, resulting in the forfeiture of any potential recovery opportunities, as detailed in a recent Medium post.
To qualify for a claim, investors must have holdings in specific cryptocurrencies noted in the case documents during the timeframe surrounding the Terra ecosystem’s catastrophic downfall. Importantly, claims involving assets with less than $100 in on-chain liquidity, as well as certain others like Terra 2.0’s Luna, are ineligible.
When submitting claims, claimants must provide proof of ownership, where the preferred method is through read-only API keys from exchanges. This approach is deemed more reliable than screenshots or manually uploaded documentation. It is advisable for those considering manual evidence to be aware of the potential for extended review periods, which may increase the risk of claims being denied.
Upon submission, claims will undergo a thorough review and verification process. Initial decisions on claims are expected to be communicated within 90 days after the submission deadline, with approved claims qualifying for pro rata distributions once processing is finalized.
The collapse of the Terra ecosystem in 2022 marked a historic moment in the cryptocurrency landscape, resulting in an unprecedented destruction of wealth within just three days. The market capitalization of LUNA plummeted from over $41 billion to a mere $6 million during this tumultuous period. For further information on recent developments, including Terraform Labs’ agreement to pay $4.5 billion to the SEC in a civil fraud case, please read more here.
