Terraform Labs Opens Claims Portal for UST Collapse Victims

Terraform Labs, the company behind the collapsed TerraUSD (UST) stablecoin, has announced that it will open a claims portal for investors on March 31. This portal, accessible at claims.terra.money, will allow affected investors to seek compensation for losses linked to the UST token collapse. Creditors must submit their claims by April 30 at 11:59 PM to be considered for potential recovery.

The eligibility criteria for submitting claims are stringent. Creditors must register on the Kroll-managed portal and provide proof of ownership. For holdings on the Terra ecosystem or supported networks, users must sign a transaction through the portal at no cost. 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 extended review periods. The plan administrator will determine the value of applications based on the eligible loss of crypto holdings. However, not all assets qualify. Cryptocurrencies with on-chain liquidity below $100 and specific holdings like Luna 2.0 on Terra 2.0 are excluded. Claims submitted with manual evidence may also be rejected if preferred verification methods are available but not used.

Once filed, the receivables will be reviewed by the Wind Down Trust. Within 90 days of the April 30 deadline, creditors will receive a portal notification detailing their submission status. They may then accept or dispute the findings, with approved amounts distributed on a pro-rata basis soon after.

The collapse of Terraform Labs’ stablecoin, UST, in May 2022 resulted in an estimated $40 billion in losses across the crypto market. The incident led to multiple lawsuits and investigations, and the company ultimately filed for bankruptcy in January 2024. In September of that year, a court approved the stablecoin issuer’s plan to wind down its operations as part of its bankruptcy proceedings. It also reached a settlement with the U.S. Securities and Exchange Commission (SEC), agreeing to pay $4.47 billion in disgorgement and penalties. This followed an earlier ruling that found the firm and its co-founder, Do Kwon, guilty of fraud.

To fulfill these obligations, Terraform Labs will use assets held by Kwon, including PYTH tokens and other holdings. However, the settlement also requires payments to the SEC to be made only after creditor claims are addressed through the company’s liquidation process. This move is a follow-up to the Delaware court's approval for Terraform Labs to wind down operations.