Notice for Terraform Labs Creditors

The collapse of Terra Luna was one of the most tumultuous chapters in the industry, wiping out billions of dollars. The weight of the financial implosion prompted regulatory scrutiny by the Securities and Exchange Commission (SEC), aiming to uncover the fraudulent scheme that left investors at a loss.

The Securities and Exchange Commission (SEC) has announced key details regarding impacted investors in the Terraform Labs crash.

According to the commission, Terraform owes $4,473,828,306 in disgorgement, prejudgment interest, and civil penalties, which will be satisfied by payments to creditors through the firm's pending bankruptcy case.

As part of the settlement, Kwon is required to transfer a total of $204,320,196 to the Terraform bankruptcy estate. This includes $7 million in cash, all crypto assets of the Luna Foundation Guard, and Kwon's PYTH crypto asset tokens.

The assets will be used to compensate affected investors. The commission has also stated that it will not receive any payments until investors and creditors are paid in full.

Furthermore, Terraform will seek approval for a liquidating Chapter 11 bankruptcy plan, which will establish a liquidating trust to manage and process the creditor settlement. The plan will outline recovery rights for all creditors and investors, allowing them to review, vote, or object during the bankruptcy proceedings.

Recently, Terraform Labs also shared details on how creditors file claims to recover their lost assets.

How to File a Claim with Terraform Labs

Individuals or entities that are owed assets can file claims for the Chapter 11 bankruptcy case, according to the firm's recent update. The deadline to submit claims for inclusion in the upcoming voting process is August 21, 2024, at 5:00 PM ET.

To file a claim, creditors must submit a Preliminary Crypto Loss Proof of Claim in English, with amounts expressed in U.S. dollars. They can file claims electronically through the site or by mail to the provided address.

Important Notice for the Terra Community regarding the Crypto Loss Bar Date:The Preliminary Crypto Loss Bar Date for filing Crypto Loss Claims – for chapter 11 voting purposes only – in the Chapter 11 bankruptcy cases of Terraform Labs Pte Ltd (TFL) and Terraform Labs Limited…

Those filing claims themselves are required to sign the documents, and proxies or third parties cannot file on behalf of a creditor, according to Terraform Labs.

The firm also noted that failing to submit the preliminary crypto loss form does not disqualify clients from submitting the main crypto loss form. However, such claimants will be unable to vote on the settlement.