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Terraform Labs, the company behind the failed LUNA and the TerraUSD (UST) stablecoin, gives investors a final chance to recover their losses. The company announced on Friday that it will launch an online claims portal on March 31.
This will allow affected investors to file for compensation for the Terra collapse. Notably, the deadline for submission is April 30 at 11:59 p.m. ET, and late claims will not be accepted.
Terraform Labs Unveils Eligibility Criteria
The claims process is part of Terraform Labs’ bankruptcy plan and will be handled by Kroll, a third-party company. As announced, investors can submit claims through an official website but must prove they own the assets.
Notably, the review may take longer if a claim is based on screenshots or manually uploaded documents. Claims could also be denied if the evidence is not strong enough.
To qualify for compensation, investors must have owned specific cryptocurrencies from the Terra ecosystem at the time of the collapse.
These assets are listed in the official case documents, and only those who meet the requirements will be considered. The payout will not include assets with less than $100 in liquidity and Terra 2.0’s Luna token.
What Happens Next?
After submission, claims will be reviewed and verified. Initial decisions will be shared within 90 days after the deadline. If a claim is approved, the investor will receive a share of the available funds.
The amount must depend on the total number of approved claims and the money left for payouts. However, it is uncertain how much investors will recover or what percentage of their losses will be paid back.
A Look Back at the Terra Collapse
The Terra ecosystem collapsed in May 2022, wiping billions of investor funds. Luna’s market capitalization fell from $41 billion to $6 million in just three days, marking one of the worst crashes in crypto history.
The TerraUSD stablecoin, which was designed to maintain a 1:1 peg to the U.S. dollar, lost its value and never recovered. The collapse also led to legal troubles for Terraform Labs and its co-founder, Do Kwon. Kwon faced multiple lawsuits and regulatory investigations across different countries.
The Terraform downfall led to many bankruptcies in the crypto sector, affecting companies exposed to Terra’s ecosystem. This claims process may be the last opportunity for investors who suffered losses to recover a portion of their funds.
