Terra Sets LUNC, USTC Recovery Timeline to Make Creditors Whole
The crash of Terra Luna has been a plague hanging over the cryptosphere for over two years. Terra Luna’s ecosystem implosion in May 2022 set off a tsunami of liquidations across the crypto sphere, coming from small-time and professional traders, crypto hedge funds, and partnering cryptocurrencies.
The nightmare seems to be over, as investors have been given a timeline for when Terra’s bankruptcy proceeds will be distributed at least partly to the ill-treated investors.
The Aftermath of Terra Luna’s System Crash
Terra USD (UST) fell to pieces in a few days. Over two years later, the Layer-1 chain’s founder, Do Kwon, is still in Montenegro, completing a four-month jail bid for document forgery.
While Do Kwon’s fate remains heavily in the hands of the U.S. Securities and Exchange Commission (SEC), the devastated investors exposed to Terra Luna are offered a helping hand from TerraForm Labs.
This is great news for the victims of the Terra Luna downfall, as it offers a pathway to restitution via the Crypto Loss Bar Date. This is related to the Chapter 11 bankruptcy of Terraform Labs Pte Ltd (TFL) and Terraform Labs Limited (TLL). However, strict deadlines are imposed for applicants who want to be considered when voting on the debtor’s upcoming reorganization.
How to Get Your Money Back from Terra
Any person or a business entity that believes the debtors own them crypto during their operational period can file claims for the Chapter 11 bankruptcy case. For your claim to be included in the upcoming Chapter 11 bankruptcy voting process, the application must be submitted by August 21, 2024, at 5:00 PM ET.
The Crypto Loss Claim is relevant to investors who had an issue with TerraForm Labs before January 21, 2024, or with TLL before July 1, 2024. TerraForm Labs’ official message on X emphasized the importance of filing promptly; otherwise, the creditor won’t be included in the voting process on the debtor’s plan.
To make a claim, Terra investors seeking recompense should be aware of the following:
- A Preliminary Crypto Loss Proofs of Claim must be filled out in English and denominated in the U.S. dollar;
- Supporting documentation does not need to be attached;
- The claimant should sign the form;
- A proxy is not able to claim on the behalf of the creditor.
The form should be filed in one of two ways:
Electronically through their site.
By mail, addressed to the following:
If by First-Class Mail:
Terraform Labs Pte. Ltd., et. al.
c/o Epiq Corporate Restructuring, LLC
P.O. Box 4419
Beaverton, OR 97076-4419
Hand Delivery or Overnight Mail:
Terraform Labs Pte. Ltd., et al. Claims Processing Center
c/o Epiq Corporate Restructuring, LLC
10300 SW Allen Blvd.
Beaverton, OR 97005
The bankruptcy liabilities will be added to TerraForm Labs's $4.5 billion penalty, as the Securities and Exchange Commission (SEC) is set to trial Terra and Do Kwon in the United States later this year.
The document clarifies that if creditors should miss the deadline for submitting their claims form, they will not be barred from seeking compensation at a later date.
On the Flipside
Initially seeking $1M, TerraForm Labs is now inclined to find alternative ways to pay the $4.5B fine the SEC imposed.
Judging from Terra’s publicly trackable crypto wallets, the insolvent company has just slightly over $75M in digital assets.
Why This Matters
This groundbreaking case could set a precedent for crypto regulation and reimburse investors exposed to Terra’s $60 billion wipeout.
Source : DailyCoin - Jul 23, 2024