One of the worst events in 2022 was the collapse of Terra. Today, a portal has been announced where creditors can submit their claims.
Details of the Terra Creditors Claims Portal
Recently, a last-minute approval of the second bankruptcy plan was disclosed. Following this, a claims screen for creditors will be created that is reminiscent of the FTX refund process. Today, Terraform Labs, the company behind TerraUSD and LUNA, announced the claims portal after filing for Chapter 11 bankruptcy in January 2024. The portal will open on March 31, and the deadline for registrations on the Crypto Loss Claims Portal will be April 30. Applications beyond this date will not be considered.
Next Steps for Terra Victims
The company holds up to $500 million in cash and derivatives for payment. Terraform indicated that between $185 million to $442 million may be paid to creditors as part of a reorganization plan approved by U.S. Bankruptcy Judge Brendan Shannon. However, it remains unclear how much of this will be spent on litigation costs incurred during the process. Creditors’ claims are substantially higher, with SEC and public debts exceeding billions. You can apply through the officially announced address to test your luck.
Financial Details and Expectations
FTX prioritized payments for claims under $50,000, and a similar process may occur here. If that happens, and if you genuinely incurred losses, your best move is to submit your claim. You should consult with your exchange regarding the API mentioned in the first section, ensuring you only create a read-only API and keep your data secure.
The collapse of Terra leaves many questions regarding the return of funds to creditors. The opening of the claims portal provides an opportunity for victims to attempt to recover at least some of their losses.
