Terraform Labs Opens Crypto Loss Claims Portal March 31 2025

Terraform Labs, the company behind the failed stablecoin TerraUSD (UST), has announced that its Crypto Loss Claims Portal will open on March 31, 2025. This development comes as part of the company's efforts to address creditor claims following the dramatic collapse of UST in 2022, which resulted in significant financial losses and led to Terraform Labs entering bankruptcy proceedings. The portal, managed by restructuring firm Kroll Restructuring Administration, will enable creditors affected by the UST collapse to submit their claims electronically through an official online platform.

Creditors have a specific window to file their claims, from March 31, 2025, to April 30, 2025, at 11:59 p.m. ET. Any claims submitted after this deadline will not be accepted, and those who fail to submit within this period will forfeit their chance at potential recovery. The list of eligible cryptocurrencies for loss claims will be made available on March 31, with certain assets, such as those with minimal on-chain liquidity and holdings like Luna 2.0, being excluded. Creditors must provide proof of ownership using read-only API keys or signed blockchain transactions. While manual evidence like transaction logs and screenshots is allowed, Terraform Labs has warned that this could slow down the review process and potentially lead to claim denial.

The verification of crypto loss claims will be handled by Terraform’s Wind Down Trust. Claimants can expect to receive an initial determination or review notice within 90 days. Eligible creditors will then receive pro rata distributions. The collapse of TerraUSD in May 2022, when its algorithmic peg to the US dollar failed, caused massive losses across crypto markets and triggered intense regulatory scrutiny. Numerous lawsuits followed, ultimately leading to Terraform Labs filing for bankruptcy. The launch of the claims portal represents a significant step toward resolving the issues for the thousands of individuals impacted by one of the most notorious failures in the crypto industry.

Terraform Labs has confirmed that it will refund creditors between $185 million and $442 million as part of its restructuring plans. This strategic claim process allows affected participants to enjoy refunds and possibly recover from incurred losses. The online portal represents a key milestone for stakeholders and investors who endured losses due to Terraform’s debacle. The process targets fairness and transparency to refund creditors who endured losses because of Terraform Labs’ collapse.

With the launch of the claims portal, the market will be closely watching the price action of LUNA, the native token of the Terra ecosystem. The price of LUNA has been volatile, and the opening of the claims portal could either bolster investor confidence or trigger renewed scrutiny. If the claims process is seen as reliable and transparent, it could support positive price actions. However, negative sentiment could repel investors, hindering LUNA’s potential recoveries. Additionally, claimants may dump their LUNA holdings to avoid devaluation, catalyzing selling pressure on the altcoin. Broad market developments could also influence LUNA’s performance, with solid recoveries helping to stabilize the altcoin and bearish trends weakening it.