Terraform Labs has initiated a critical phase in its bankruptcy proceedings with the launch of its official claims portal. Managed by Kroll Restructuring Administration LLC, this portal gives creditors a final opportunity to recover losses tied to the 2022 Terra ecosystem collapse. The claims process marks a pivotal moment in winding down Terraform’s bankrupt estate and seeking closure after one of the most catastrophic events in crypto history.
What Creditors Must Know
Creditors must submit their claims by April 30, 2025, at 11:59 p.m. ET. Missing this deadline will result in automatic forfeiture of any eligibility for recovery. The process specifically targets losses stemming from the implosion of TerraUSD (UST) and related cryptocurrencies within the original Terra ecosystem. However, the claims process excludes Luna 2.0 holdings and tokens with under $100 in on-chain liquidity. These exclusions aim to streamline the process and prioritize significant claims.
To help users determine eligibility, Kroll plans to publish a full list of eligible assets on the restructuring portal once the claims process officially begins. This will provide much-needed clarity for victims still seeking answers almost three years after the collapse.
How the Process Works
Terraform Labs has designed the claims process to focus on Preferred Evidence for verifying user losses. This includes read-only API keys from exchanges, which allow Kroll to independently verify holdings and transactions without risking users’ funds or privacy. Claimants who submit API keys will benefit from faster review times and streamlined approvals.
In contrast, users who provide Manual Evidence — such as screenshots, spreadsheets, or transaction logs — will face lengthier verification procedures. Kroll warned that claims using Manual Evidence may require individualized assessments and extended reviews, especially if Preferred Evidence is available but not submitted. These claims risk rejection if they lack sufficient supporting documentation.
Once a claim is filed, the creditor will receive an initial determination within 90 days of the submission deadline. In some cases, Kroll may issue a notice of extended review if further analysis is necessary. Creditors who disagree with the results can raise disputes under the procedures outlined in the Crypto Loss Claim Terms, which will be available on the portal.
Distribution and Verification
Kroll will distribute recovery amounts on a pro-rata basis, depending on the size of each approved claim. However, claimants must complete identity verification procedures to qualify for any distribution. This requirement aligns with anti-fraud safeguards and aims to prevent illegitimate claims from depleting the estate’s remaining funds.
Creditors should prepare all documentation now to ensure smooth processing. Terraform’s team and Kroll both emphasize the urgency and finality of the April 30 deadline.
The Fallout: $45 Billion Lost
Terraform Labs’ collapse in May 2022 triggered one of the worst chain reactions in crypto history. The depegging of TerraUSD (UST), which was designed as an algorithmic stablecoin, caused panic across the entire crypto market. The UST collapse wiped out an estimated $45 billion from Terraform’s ecosystem, including $28 billion from decentralized applications like Anchor Protocol, a DeFi savings platform that promised high-yield returns.
This event sent shockwaves across the digital asset world, leading to a $300 billion market crash. Several major crypto firms, including Celsius Network and Voyager Digital, filed for bankruptcy after exposure to Terra-related assets. Investors lost life savings. Retail traders fled stablecoins. Regulators worldwide shifted their focus to digital assets, particularly stablecoins and algorithmic financial products.
The Terra collapse now stands as a cautionary tale and a catalyst for increased regulation.
Read More: Crypto Under FIEA: Japan Plans Major Shake-Up
Why the Claims Portal Matters
This claims process provides more than just financial recovery — it offers transparency and a path forward for thousands of victims. Terraform Labs, despite its reputation now being synonymous with collapse, has taken steps to provide structure and closure to its former ecosystem participants.
Unlike some failed crypto firms that left users in limbo, Terraform’s coordinated effort with Kroll signals a serious attempt to right past wrongs. The system’s design favors automation and documentation over subjective evaluations, reducing room for error and potential fraud. However, this also places the onus on users to collect and submit accurate data before the final deadline.
What Claimants Should Do Now
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Check Eligibility: Once Kroll releases the eligible asset list, review your holdings from the Terra ecosystem to confirm inclusion.
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Gather Preferred Evidence: Log into your exchanges and generate read-only API keys that reflect holdings and transactions related to UST or related tokens.
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Avoid Sole Reliance on Screenshots: Only use Manual Evidence if API data is genuinely unavailable.
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File Before the Deadline: Don’t wait until the last minute. Submitting early reduces the risk of technical errors and ensures a quicker response.
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Prepare for KYC: Ensure your documents for identity verification are current and valid to receive any pro-rata distribution.
Final Thoughts
Terraform Labs may have fallen, but its bankruptcy process provides a rare chance for digital asset creditors to reclaim part of what was lost. With Kroll managing the claims and prioritizing verification through structured, secure methods, the system leans heavily toward transparency and accountability.
Still, users must act swiftly. The April 30, 2025, deadline will arrive quickly, and those who miss it will forfeit all recovery rights. As the crypto space continues evolving with new safeguards and legal frameworks, this process offers a benchmark for how large-scale digital asset failures might be handled in the future.
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