Terraform Labs Opens Crypto Claims Portal For Bankruptcy Creditors
- Terraform Labs opens claims portal for crypto creditors on March 31.
- Creditors must submit claims by April 30, 2025, for consideration.
- Terraform plans up to $442M repayment to creditors after bankruptcy.
Terraform Labs has launched a claims portal system to help manage compensation payments for creditors affected by its 2022 collapse. Eligible creditors can use the portal from March 31 until April 30, 2025 to submit their claims. Terraform Labs declared Chapter 11 bankruptcy in January 2024 when its $40 billion ecosystem failed.
Terraform Labs “Crypto Loss Claims Portal”
Creditors need to use the “Crypto Loss Claims Portal” to file claims to be considered. The company stressed that all claims past April 30, 2025 will automatically be disregarded. Terraform Limited will process claims from creditors who will submit sufficient documentation to demonstrate their ownership of digital assets.
A formal claim needs evidence that meets specific guidelines. The required documentation includes native wallet addresses for crypto stored under self-custody and read-only API keys for cryptocurrency stored on exchanges. Terraform Labs will accept additional information such as transaction logs and account statements but indicates this documentation can lead to reduced speed in processing claims.
All creditors must receive their initial claim amount within 90 days after the April 30 deadline. Each creditor may choose to accept or dispute the determined payment amount. The company will initiate distribution payments as soon as it processes claims and the funds will be distributed proportionally to all creditors.
Terraform Labs Settlement and Compensation Scheme
The company expects to repay creditors an estimated sum of $185 million to $442 million. A U.S. Bankruptcy Judge Brendan Shannon has authorized these funds as part of a reorganization plan. Terraform Labs implemented its reorganization plan after its $4.47 billion settlement with the Securities and Exchange Commission (SEC) in 2024.
However, the substantial SEC settlement will not influence the payments made to creditors. Terraform Labs made a commitment to pay their creditor debts before any payments to the SEC. This agreement ensures that company creditors receive payments from the company’s reorganization before any financial settlements are made to the regulator.
The company has exempted certain assets from its compensation scheme. Terraform Labs’ compensation scheme excludes both crypto tokens with on-chain balances lower than $100 and Luna 2.0 tokens. All creditors should review the Crypto Loss Claim Procedures on the portal to understand the requirements for eligible claims.
Terraform Labs has launched its claims portal as part of the ongoing bankruptcy process. The company seeks to compensate creditors who lost funds after TerraUSD (UST) and LUNA Token collapsed.
