The organization behind LUNA and the algorithmic stablecoin TerraUSD has announced plans to launch a crypto loss claims portal on March 31. This initiative is designed to reimburse those who incurred losses of at least $100 following the downfall of the Terra ecosystem in 2022.
This decision comes after a Delaware court granted permission for the organization to shut down its operations. The judge overseeing the proceedings endorsed their bankruptcy plan, describing it as a “welcome alternative” to prolonged legal battles regarding investor losses.
The company reached a settlement with the US Securities and Exchange Commission in June 2024, amounting to $4.47 billion.
For claimants to receive reimbursement, they must submit their claims along with supporting documentation through the crypto loss claims portal by 11:59 pm ET on April 30. Claims under $100 will not be processed.
Preferred evidence pertains to read-only API keys, considered to be the most precise and dependable data, particularly for users of major exchanges.
In their announcement, the organization cautioned that claims submitted with manual evidence “will likely be subject to a prolonged review process” and may face rejection if preferred evidence is obtainable. The estimated payout to investors and stakeholders could range from $184.5 million to $442.2 million, although the total of eligible crypto losses remains uncertain.
The Decline of Terraform Labs
In June 2024, the organization stated its intention to cease operations and hand over control of the Terra blockchain to its community. It planned to divest key projects within the Terra ecosystem and burn both unvested and vested holdings.
Prior to its dramatic fall, the organization oversaw a $45 billion ecosystem involving its algorithmic stablecoin and the LUNA token. The founder faced arrest in Montenegro and was extradited to the US, where he has been charged with eight felonies by the Justice Department.
The disintegration of the Terra ecosystem sent shockwaves through the cryptocurrency sector, causing Bitcoin to lose 37% of its value over a month, dropping to $19,000.
The US court hearing for Kwon has been postponed until April 10 as prosecutors review a significant amount of new evidence.
Related: The organization and its founder found liable for fraud in SEC case