Terraform Labs To Launch Loss Claims Portal On March 31

Terraform Labs – the company behind LUNA and algorithmic stablecoin TerraUSD (UST) – will launch its crypto loss claims portal on March 31, 2025. The portal is set up to compensate individuals who lost at least $100 during the collapse of the Terra ecosystem in 2022. 

The launch of this claims portal occurs nearly three years after the Terra ecosystem lost $45 billion in May 2022. The move comes after the Delaware court approved Terraform Labs to halt its operations, marking one of the final steps in the company’s ongoing legal and financial troubles. The judge overseeing the case accepted Terraform Labs’ bankruptcy plan, seeing it as a welcome alternative to continuing legal proceedings over investor losses

Terraform Labs reached an arrangement with the US Securities and Exchange Commission (SEC) in June 2024 for $4.47 billion. 

Investors can submit their claims related to the company’s bankruptcy proceedings through the portal within a month. The company, having faced major challenges after the fall of its algorithmic stablecoin TerraUSD (UST) and its companion token LUNA, has resorted to a repayment plan ranging between $185 million and $442 million. 

How To Submit Claims?

Investors seeking compensation have to create an account on the Crypto Loss Claims Portal. Once registered, they can upload the necessary documents to validate their claims. Creditors need to make sure all information given is accurate and complete to avoid potential delays or rejections in the claims process. 

Terraform Labs will open its bankruptcy claims portal on March 31 for investors to submit claims. Eligible investors must register and apply through the “Crypto Loss Claims Portal” by April 30. 

The claims process requires proof of ownership, with on-chain verification preferred submissions. The company divides evidence into two types: manual and preferred. Manual evidence comprises transaction logs, account statements, and screenshots. But the preferred documentation will be regarded as more reliable, especially for users of major crypto exchanges. Those with assets on other platforms are urged to submit a read-only API key. 

Terraform Labs has highlighted that the claims submission process will be transparent and streamlined to reinstate confidence among investors. The final settlement amount will depend on the total number of claims submitted and validated. The plan administrator will determine the value of applications according to the eligible loss of crypto holdings. Not all assets qualify for the said reimbursement. Cryptocurrencies with on-chain liquidity less than $100 and certain holdings like Luna 2.0 on Terra 2.0 are excluded. 

Once the claims are filed, the receivables will be reviewed by the Wind Down Trust, and creditors are expected to receive a portal notification detailing their submission status. The venture may then accept or dispute the findings, 

Terraform Labs has warned that claims submitted with manual evidence may have to undergo a long-running review process and could even be disqualified if preferred evidence is available. The company estimates that it may reinstate investors between $184.5 million and $442.2 million, though the exact figure is unknown. 

Terraform Labs Legal And Financial Turmoil

Terraform Labs has been involved in a legal dispute since its high-profile collapse. The company has announced it is transferring control of the Terra blockchain over to its community, effectively ending its operations. The company has also planned to sell its major projects in the Terra ecosystem and burn its vested and unvested token holdings. 

The fall of the Terra ecosystem in 2022 had a chain reaction impact across the cryptocurrency industry. The failure of its algorithmic stablecoin, TerraUSD (UST), and the following collapse of the LUNA token caused billions in losses and ruined trust in similar projects. Do Kwan, the founder of Terraform Labs, was arrested in Montenegro and was extradited to the United States, where he faces eight violation charges from the U.S. Justice Department. His court hearing was originally scheduled for earlier this year, but has been postponed to April 10 as prosecutors review newly obtained evidence.