Terraform Labs opens a claims portal for victims of Terrausd

Terraform Labs announced that the Crypto Loss Claims Portal will open on March 31, 2025.

Companies that have ended their business after bankruptcy have said that creditors must file claims by April 30, 2025 to consider potential recovery.

Eligibility criteria and post-filing procedures

According to a blog post, creditors must register with a Kroll-controlled portal and submit a request with proof of ownership. Users must sign transactions free of charge for holdings on the Terra Ecosystem or a supported network.

Those with assets on other platforms are encouraged to submit a read-only API key. Manual evidence such as transaction logs and account statements may also be accepted, but this could lead to an extended review period.

The Planning Manager determines the value of the application based on the eligible loss of crypto-holding. However, not all assets are eligible. Cryptocurrencies with on-chain liquidity of less than $100 and certain holdings, such as Terra 2.0’s Luna 2.0, are excluded. If a priority verification method is available but not used, a request submitted with manual evidence may also be denied.

Once submitted, accounts receivable will be reviewed by Wind Down Trust. Within 90 days of the April 30 deadline, creditors will receive a portal notification detailing the filing status. They can then accept or contest the findings, and the approved amount will be immediately distributed on a proportional basis.

UST collapse and legal issues

Terraform Labs’ Stablecoin, UST collapsed in May 2022 after the failed algorithm PEG against the US dollar, resulting in an estimated $40 billion loss across the crypto market.

The case led to multiple lawsuits and investigations, and the company ultimately filed for bankruptcy in January 2024. In September of that year, the court approved the steady issuer’s plan to abolish the business as part of the bankruptcy proceedings.

He also reached a settlement with the Securities and Exchange Commission (SEC) and agreed to pay $4.47 billion in disgust and penalties. This followed an earlier ruling that found the company and its co-founder Do Kwon on fraud charges.

To fulfill these obligations, Terraform Labs uses assets held by Kwon, including Pyth Tokens and other holdings. However, the settlement requires payment to the SEC only after the creditor’s claim has been addressed through the creditor’s liquidation process.