Terraform Labs Launches Claims Portal for UST Creditors Amid Bankruptcy

Terraform Labs, the now-bankrupt firm behind the ill-fated TerraUSD (UST) stablecoin, has initiated a new crypto claims portal aimed at reimbursing users adversely affected by the company’s dramatic collapse in 2022. This portal is particularly significant for creditors who were involved in the project during its peak. Users can file claims from March 31 to April 30, 2025, as part of this endeavor to settle outstanding financial issues stemming from the company’s turbulent history. Those who fail to submit their claims within the designated timeframe will unfortunately not be considered for any compensation.

To file a claim through the portal, users are required to demonstrate ownership of their assets. This involves providing essential information, including wallet addresses, read-only API keys, and various supporting documents that substantiate their claims. Furthermore, a Wind Down Trust has been established to oversee and evaluate the claims through the ongoing bankruptcy process. It’s important to note that not all assets will qualify for compensation; crypto holdings with on-chain liquidity under $100 and certain tokens like Luna 2.0, which exists on the Terra 2.0 blockchain, are explicitly excluded from the claims process.

Once claims have been submitted, UST creditors can anticipate an initial assessment regarding their claim amounts within 90 days after the final submission date. At this stage, they will have the option to accept or contest the determination provided. If a claim goes uncontested, disbursements will commence as soon as possible, following a pro-rata distribution method for payouts. Given the complexities involved, Terraform Labs has encouraged all creditors to carefully examine the official Crypto Loss Claim Procedures on the portal to ensure compliance with the required standards and maximize their chances of receiving compensation.

In the wake of the TerraUSD crash, Terraform Labs sought Chapter 11 bankruptcy protection in January 2024, marking a significant turn of events for the firm and its investors. Notably, a U.S. court ratified the bankruptcy filing in September 2024 after Terraform Labs reached a $4.47 billion settlement with the Securities and Exchange Commission (SEC). This settlement was instrumental in establishing a pathway for creditors to seek reparations, although the road ahead remains fraught with challenges and complexities.

In a related vein, investment firm Galaxy Digital has made headlines by reaching a $200 million settlement with the New York Attorney General. The regulatory body accused Galaxy and its founder, Michael Novogratz, of promoting the LUNA token while discreetly offloading substantial quantities of it without informing investors. The allegations also highlighted that Galaxy had initially acquired LUNA in 2020 but did not fully disclose its intentions to sell when marketing the token to clients. The settlement underscores the regulator’s commitment to enforcing transparency and integrity in crypto investments, reiterating the critical necessity for firms to uphold ethical practices in their dealings.

While Galaxy Digital did not admit to any wrongdoing in the settlement, it has agreed to pay the stipulated fine over three years, starting with an immediate payment of $40 million due within two weeks. Alongside this financial obligation, the firm is set to implement updates to its internal policies to bolster transparency and mitigate potential conflicts of interest in future token promotions, a crucial step that may bolster investor confidence in the firm moving forward.

In conclusion, the launch of the crypto claims portal by Terraform Labs signifies an important development for those affected by the TerraUSD debacle, providing a mechanism through which creditors can seek compensation. While the portal presents an opportunity for users to reclaim some of their losses, adherence to the claims procedures will be essential. Simultaneously, the $200 million settlement involving Galaxy Digital highlights the ongoing scrutiny that firms in the crypto space face from regulatory bodies, reinforcing the necessity for transparency and accountability as the sector continues to evolve.