Terraform Labs to Launch Crypto Loss Claims Portal
Estimated Reading Time: 2 minutes
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more
Terraform Labs, the company behind LUNA and TerraUSD (UST), will open a claims portal on March 31 to help users recover losses from the 2022 crash. Only those who lost at least $100 can apply for reimbursement.
This follows a Delaware court’s approval of Terraform Labs’ bankruptcy plan, which aims to close the company while compensating affected investors.
How the Claims Process Works
To receive compensation, users must submit their claims before April 30 at 11:59 pm EST. Claims under $100 will not be accepted. Also, Terraform Labs will allow two types of proof: manual and preferred. Manual proof includes transaction logs, account statements, and screenshots. On the other hand, the preferred proof—read-only API keys—is considered more reliable, especially for users of major crypto exchanges.
Terraform Labs has warned that claims using manual proof might take longer to review and could be rejected if API data is available. The company estimates it will distribute between $184.5 million and $442.2 million, though the exact total remains uncertain.
Terraform Labs’ Downfall and Legal Consequences
Around June 2024, Terraform Labs announced it would shut down and hand over control of the Terra blockchain to the members of its community. Additionally, the company also planned to sell off its key projects and burn unvested and vested holdings. However, once valued at $45 billion, Terraform Labs collapsed after its algorithmic stablecoin failed, causing massive losses in the crypto market.
To this end, Founder Do Kwon was arrested in Montenegro and later extradited to the United States, where he faces eight felony charges. Currently, the collapse of Terra caused significant damage to the crypto market, with Bitcoin losing 37% of its value in just one month. As it stands, the founder’s U.S. court hearing has been delayed until April 10 as prosecutors review new evidence.
In order place winning trades with us via Bybit, you can open an account here.
