Terraform Labs to Reopen Shuttle Bridge and Destroy LUNA Tokens Following Court Directive

Terraform Labs to Reopen Shuttle Bridge and Destroy LUNA Tokens Following Court Directive

Terra has announced key developments in the wake of a bankruptcy court order related to Terraform Labs’ (TFL) Chapter 11 case. The court has given TFL the green light to take significant actions, such as reopening the Shuttle Bridge and burning a large number of LUNA tokens. These steps mark a critical phase in the company’s restructuring process.

In an announcement on X, the blockchain platform revealed that the court’s directives include reopening the Shuttle Bridge, which will enable users to redeem their sealed assets on Terra Classic.

Shuttle Bridge Reopening

The Shuttle Bridge, a crucial infrastructure for asset transfers between Terra and other blockchains, was previously shut down. TFL now plans to move all assets from the Shuttle Bridge wallet to a new wallet and introduce a more user-friendly interface for the redemption process.

Terra has stated that users will have a 30-day period to redeem their wrapped assets from the Bridge wallet. After this window, TFL will permanently close the Shuttle Bridge and destroy any remaining assets in the wallet.

Destruction of LUNA Tokens

In a bid to reduce the circulating supply of LUNA, the court order has permitted TFL to cancel the distribution and burn 150 million LUNA tokens that were acquired from Terra community funding. This token destruction is part of a larger strategy to stabilize LUNA’s value and restore confidence among the community and investors.

Future Plans

TFL’s proposed Chapter 11 plan, which includes these measures, has yet to receive full approval from the bankruptcy court and is anticipated to take effect no earlier than late September 2024. This plan is a crucial element of TFL’s broader strategy to emerge from bankruptcy and reestablish Terra as a stable and reliable entity in the cryptocurrency market.

These actions are also aligned with a settlement reached between TFL and the United States Securities and Exchange Commission, aiming to address regulatory concerns and ensure compliance with federal securities laws. This settlement is expected to further support TFL’s restructuring and stabilization efforts.