Terraform Labs Launches Crypto Loss Claims: Deadline April 30!

Terraform Labs Launches Crypto Loss Claims Portal: Claim What's Yours!

Terraform Labs launches a Crypto Loss Claims Portal today. It will be used to receive requests for compensation from investors who lost their money in the 2022 TerraUSD crash.

New York-based Kroll Restructuring Administration LLC will manage the process. Investors who had lost there money must submit their claims by April 30, 2025, otherwise they will lose their right to compensation.

Investors should have to submit proof of their losses, such as transaction logs for tokens sold at a loss after May 2022 and wallet addresses where Terra-based cryptocurrencies were stored, to submit a claim.

Kroll has set up a system to speed up claim verification. The process prioritizes "Preferred Evidence," like read-only API keys from exchanges. Claims based on "Manual Evidence," such as screenshots or transaction logs, may take longer to review. Some may even be rejected if better evidence is available.

After submitting a claim, investors will get an initial response within 90 days. Some cases may require extended reviews. Those with approved claims will receive compensation based on a pro-rata distribution. Identity verification will be required before receiving funds.

A list of eligible cryptocurrencies will be available on Kroll’s restructuring portal when claims open. However, Luna 2.0 and tokens with less than $100 in on-chain liquidity will not be included.

Terraform Labs and Do Kwon Ordered to Pay $4.5 Billion

The collapse of Terraform Labs in 2022 resulted in significant losses. Its system lost about $45 billion. Numerous apps were severely impacted. Anchor, one of them, lost $28 billion. This crash also rocked the entire cryptocurrency market. In total, almost $300 billion was wiped out.

This failure triggered the bankruptcies of firms like Celsius and Voyager. It also increased global regulatory scrutiny on stablecoins.

Terraform Labs and its former CEO, Do Kwon, recently settled a fraud case with the SEC. A Manhattan court found them guilty of misleading investors about Terra’s stability before its collapse.

As part of the settlement, they agreed to pay $4.5 billion, which includes returning $4.5 billion in illegal gains, paying a $420 million fine, a personal payment of $204 million from Do Kwon, and a ban on dealing in crypto securities.

Judge Jed Rakoff of the U.S. District Court in New York still has to approve the settlement. The sanctions are intended to give the cryptocurrency industry a clear message.

Do Kwon was arrested in Montenegro in 2023 for using a fake passport. After serving four months in prison, he was released. Both the U.S. and South Korea want to extradite him for fraud charges.

Will Trump Pardon Do Kwon?

The cryptocurrency community is curious whether former President Donald Trump will pardon Do Kwon. Trump pardoned other cryptocurrency figures before. Investor trust in Terraform Labs may return if Kwon is granted a pardon.

The way digital finance firms respond to regulations may also be affected by a pardon. The industry is currently waiting to see what comes next.

An essential phase in Terraform Labs' bankruptcy process has been reached with the opening of the claims' portal. In order to submit their claims before the April 30 deadline, investors should move swiftly.