Terraform Labs Sets August Deadline for Bankruptcy Claims: Impact on LUNC and USTC Investors

Terraform Labs Sets August Deadline for Bankruptcy Claims: Impact on LUNC and USTC Investors

The post Terraform Labs Sets August Deadline for Bankruptcy Claims: Impact on LUNC and USTC Investors appeared first on Coinpedia Fintech News

Terraform Labs announced on its official X account that the deadline for filing claims in TFL and TLL’s Chapter 11 bankruptcy lawsuits is August 10 at 09:00 UTC. The business advised Terraform Lab’s claimants to submit their paperwork by this date. Terraform Labs, which created TerraUSD, filed for Chapter 11 bankruptcy with the Delaware bankruptcy court on January 21, according to Reuters. 

However, Terraform Labs sees its Chapter 11 petition as a strategic move to continue operations and address pending litigation in Singapore and the US, particularly with the SEC. Despite challenges, Terraform Labs has expanded its Web3 offerings with recent acquisitions like Pulsar Finance, a cross-chain portfolio manager, and the launch of Station v3, a new cryptocurrency wallet, demonstrating strong growth commitment.

Watch out for Key Deadlines

The General Bar Date for all non-governmental claims is August 9, 2024, at 5:00 p.m. ET. This applies to creditors with claims against Terraform Labs Pte. Ltd. (TFL) before January 21, 2024, or Terraform Labs Ltd. (TLL) before July 1, 2024. Plus, governmental claims have deadlines of August 9, 2024, for TFL and December 30, 2024, for TLL.

Filing Procedures and Consequences

Creditors must file claims in English, in U.S. dollars, using specified forms, and submit them electronically or by mail. Missing the deadline could result in losing voting and distribution rights in the Chapter 11 cases.

Excluded Crypto Claims

Claims related to the purchase or sale of digital assets within the Terra ecosystem are excluded from the General Bar Date and will have a later deadline. This highlights the unique complexities of handling crypto-related claims in bankruptcy proceedings.

In the meanwhile, Terraform Labs advises those with Excluded Crypto Claims to stay vigilant for future deadlines. The clear delineation of these claims underscores the unique nature and legal considerations of digital assets in bankruptcy cases.

Will it impact LUNC and USTC?

This announcement has led to mixed reactions within the crypto community, especially among LUNC and USTC investors. The filing deadlines and structured process may restore some credibility to the network, potentially driving bullish momentum for LUNC. Currently, LUNC has surged by 3.11%, trading at $0.00007948. 

Terraform Labs’ Pending SEC Settlement 

Terraform Labs faces a critical phase in its financial and legal strategy with a pending $4.47 billion settlement with the SEC, stemming from accusations of investor fraud. This settlement, which includes $4.05 billion in disgorgement and a $420 million civil penalty, was reached in June 2024. 

However, complications arise from Terraform Labs’ January 2024 bankruptcy filing, as the settlement amount is now treated as an unsecured claim, complicating the path to financial recovery for affected investors.