Terra went bankrupt in mid-2022, devastating the cryptocurrency markets and causing billion-dollar losses. The collapse of the ecosystem resulted in losses exceeding $40 billion. Indirectly, it led to the downfall of many billion-dollar companies, including FTX and 3AC. Now, the SEC has taken action.
Terra Latest News
In 2022, cryptocurrencies crashed, leaving investors at a loss. The year 2024 might be the year when victims get compensated. Besides Mt Gox refunds, FTX and Terra victims may also recover their losses. Although FTX has not yet set a clear timeline for refunds, it will likely do so soon. For Terra, the SEC has created a new information page.
Terraform owes $4,473,828,306 in compensation, prejudgment interest, and civil penalties. Payments will be made through Terraform’s ongoing bankruptcy case, In re Terraform Labs Pte.
“The Final Judgment requires Kwon to transfer at least $204,320,196 to the Terraform bankruptcy estate, including $7 million in cash, all crypto assets of the Luna Foundation Guard, and Kwon’s PYTH crypto asset tokens, to be distributed to harmed investors.”
First, a bankruptcy plan will be created and approved. A petition has been filed to approve procedures for harmed investors to submit proof of claim forms to vote on the Chapter 11 plan. The approval hearing is expected to take place in the fall of 2024. Investors can access the necessary documents on the SEC’s page. Additionally, they can contact the SEC at ENFTerraInvestors@sec.gov.
An Official Committee of Unsecured Creditors (“Committee”) has been appointed in the Terraform bankruptcy case, and the process will be managed by McDermott Will & Emery LLP. In the FTX case, the bankruptcy plan has not yet been approved due to various objections. If the process does not get delayed on the Terra side, refunds could be made around the same time as FTX. It seems unlikely that those who suffered losses will receive a 1:1 refund.
