Terra Announces Pivotal Developments in Chapter 11 Case: Shuttle Bridge Reopening, LUNA Token Destruction Authorized
- PHPzOriginal
- 2024-07-20 02:21:301072browse
Terra has announced significant developments following a bankruptcy court order in Terraform Labs’ (TFL) Chapter 11 case.
Terra (CRYPTO: LUNA) has announced significant developments following a bankruptcy court order in Terraform Labs’ (TFL) Chapter 11 case.
The court has authorized TFL to take crucial steps, including reopening the Shuttle Bridge and destroying a substantial amount of LUNA tokens, as part of its efforts to restructure the company.
As part of the court's directives, TFL will reopen the Shuttle Bridge, allowing users to redeem sealed assets on Terra Classic (LUNC).
The Shuttle Bridge, a key infrastructure for transferring assets between Terra and other blockchains, was previously closed.
TFL will now transfer all assets held in the Shuttle Bridge wallet to a new wallet and introduce a simplified interface to facilitate the redemption process.
According to Terra, users will have a 30-day window to redeem their wrapped assets from the Bridge wallet. After this period, TFL intends to permanently close the Shuttle Bridge, and any remaining assets in the wallet will be destroyed.
In a bid to reduce the circulating supply of LUNA, the court order has authorized TFL to cancel the distribution and destroy 150 million LUNA tokens that were obtained from Terra community funding.
This destruction is part of a broader strategy to stabilize the value of LUNA and restore confidence among the community and investors.
Additionally, TFL will begin the process of deactivating the 125 million LUNA currently staked by 49 validators that were recommended by Terra.
Once deactivated, these 125 million LUNA tokens, along with 2.5 million LUNA used for liquidity provision, will be destroyed.
TFL's proposed Chapter 11 plan, which includes these measures, has not yet received full approval from the bankruptcy court and is not expected to take effect until late September 2024 at the earliest.
The plan is part of TFL's comprehensive strategy to emerge from bankruptcy and reposition Terra as a stable and reliable player in the cryptocurrency space.
The actions taken by TFL also follow a settlement that was reached between TFL and the United States Securities and Exchange Commission.
This settlement aims to address regulatory concerns and ensure compliance with federal securities laws, further contributing to the restructuring and stabilization efforts.
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