Terraform Labs opens claims portal for $442M payout

Terraform Labs has opened a claims portal for investors affected by the May 2022 collapse of TerraUSD (CRYPTO:UST) and Luna (LUNA), with New York-based Kroll overseeing the process.

The portal, available from March 31 to April 30, allows creditors to submit evidence of losses, including wallet addresses and transaction logs.

Compensation will be distributed pro rata based on approved claims, though Kroll has warned payouts may be “materially less” than documented losses due to limited funds.

Terraform Labs estimates it could disburse between $184.5 million and $442.2 million, though the total eligible losses remain uncertain.

The process follows the firm’s Chapter 11 bankruptcy filing in January 2024, which listed assets and liabilities between $100 million and $500 million.

A Delaware court approved the wind-down plan, calling it a preferable alternative to prolonged litigation.

Creditors will receive notifications within 90 days of the portal’s closure and may dispute determinations.

Payouts will be made in U.S. dollars, as Kroll stated distributions in other currencies are not feasible for some claimants.

The settlement aligns with Terraform Labs’ $4.5 billion agreement with the SEC in July 2024 to resolve fraud charges, which mandated consumer protections similar to those in traditional finance.

1inch Labs’ Hedi Navazan noted the regulatory implications, stating that while the process may restore trust, it reflects standard financial protections already established in traditional markets.

Founder Do Kwon’s fraud trial, set for January 2026, remains pending.

The compensation plan represents an effort to address investor losses while navigating ongoing legal challenges.