Terraform Labs, the company behind the crypto assets LUNA and TerraUSD, will open a portal for submitting claims for compensation on March 31, 2025. This step is made possible by a court’s approval to implement a compensation plan for investors affected by the company’s collapse.
This is reported by Finway
Conditions for submitting claims
Affected investors will be able to submit claims until April 30, 2025, provided their losses exceed $100. Terraform Labs offers two methods for verifying losses: manual (transaction statements and screenshots) and preferred (API keys). The latter option is considered more reliable and may expedite the claims review process.
Amount of payouts and consequences of the collapse
According to the company, the total amount that may be allocated for payouts to investors ranges from $184.5 million to $442.2 million. However, the final amount will depend on the number of approved claims and the precise determination of losses. Claims that contain insufficient evidence may be rejected.
Terraform Labs faced mass lawsuits following the collapse of the Terra ecosystem in May 2022, which resulted in $45 billion in losses. In 2024, the company reached a settlement with the U.S. Securities and Exchange Commission (SEC) to pay $4.47 billion.
The collapse of Terra triggered a crisis in the cryptocurrency market, leading to a 37% drop in Bitcoin over the course of a month. This became one of the largest collapses in the industry’s history, significantly impacting investor confidence in algorithmic stablecoins.
The company’s founder, Do Kwon, was arrested in Montenegro, and in December 2024, a court ruled for his extradition to the United States. The prosecution has charged him with eight counts related to fraud, and court hearings in his case are scheduled for April 10.
“The number of people affected by the collapse of Terraform Labs could exceed one million.”