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Countless people lost money in Do Kwon’s high-interest crypto scheme, and the time has finally come to start a formal loss claim. At its peak, the market capitalization for Luna peaked at around $40 billion, and the Anchor protocol had a peak Total Value Locked of approximately $17 billion.
Many people simply saw Kwon’s advertised 19-20% interest rate, bought Kwon’s Terra stablecoin, and deposited it into his Anchor protocol in order to earn yield. Others speculated on Luna or Anchor governance tokens.
It sounded too good to be true, and it was. All of Kwon’s tokens – Terra, Luna, and Anchor – have lost over 99.9% of their peak value.
The SEC sued. A jury in New York agreed, deciding Kwon and his company, Terraform, are guilty of defrauding investors. Kwon and his company must pay billions of dollars to victims. Kwon is now a felon and international fugitive.
If you held Terra (UST), Luna (LUNA), Anchor (ANC), or Mirror (MIR) in or prior to May 2022, you might be eligible for compensation if the government collects its court-ordered judgment from Kwon and Terraform.
How to submit a loss claim as a Terra Luna or Anchor victim
The best place to start the process is to read the SEC’s formal notice to harmed investors.
Importantly, victims should also ignore emails, social posts, or any third party claiming to be the SEC, the US District Court for the Southern District of New York, the US Bankruptcy Court for the District of Delaware, or the lawyers handling this lawsuit and its associated bankruptcy proceedings.
Read more: Montenegro court set to decide on Do Kwon extradition… again
Be wary of official-looking communications, which can lead to spoofing, phishing, and social engineering. Take the time to verify claims with the SEC or court before releasing any information to third-parties.
According to the SEC, Terraform and Kwon owe a combined $4,678,148,502 per their final consent judgment. They have not made this payment in full. The SEC does not know when all funds will be available for victims. Its staff is working diligently to enforce collections on Commissioners’ prevailing judgment.
Chapter 11 voting and draft claims forms
According to the SEC, Terraform has filed a motion to approve procedures for harmed investors to submit a proof of claim solely for the purposes of voting on its Chapter 11 bankruptcy and liquidation plan. That plan is accessible at this link.
This portal contains a draft claim form and detailed information for claimants to prepare their documentation. Documentation is required for gaining voting rights in Chapter 11 proceedings and declaring financial losses for potential reimbursement.
Victims should read the language on the SEC’s notice and the claims portal carefully, attending precisely to any legal terms.
There are some deadlines for certain victims, depending on their circumstances, that require submitting paperwork by August 9 and August 21. Victims should start at the SEC’s formal notice and proceed methodically through the claims process if they qualify for potential compensation.
A bankruptcy lawyer can also help to interpret the Terra, Luna, or Anchor loss claim process for individuals who have trouble understanding or completing any legal instructions.