Terra Luna Bankruptcy Progress: Shuttle Bridge Active Again, LUNA Tokens to Be Burned

• The bankruptcy court has issued a new order authorizing Terraform Labs (TFL) to take significant actions.

• The Shuttle Bridge will be operational for up to 30 days once TFL’s Chapter 11 plan becomes effective.

The bankruptcy court has issued an order authorizing several critical actions for Terraform Labs (TFL). These actions include reopening the Shuttle Bridge for wrapped asset redemptions and implementing a plan to transfer and burn a significant amount of LUNA tokens.

Court Sets Timeline for Chapter 11 Plan 

The court’s order allows Terraform Labs to reopen the Shuttle Bridge, a platform used to redeem wrapped assets on Terra Classic. This will enable users to access their assets through a new, more secure interface. The Shuttle Bridge will remain operational for up to 30 days after TFL’s Chapter 11 plan becomes effective. Following this period, the bridge will be permanently shut down, and any remaining assets will be burned.

The Chapter 11 plan has not yet been approved and is expected to take effect no earlier than late September 2024. This timeline coincides with the General Bar Date for filing claims, which is set for August 9, 2024, at 5:00 p.m. ET. This deadline is crucial for creditors with claims against TFL that arose before January 21, 2024, or against TLL that arose before July 1, 2024.

In compliance with a settlement with the SEC, TFL will also begin the process of transferring 125 million LUNA tokens from 49 validators, as recommended by the Terra Delegation Committee. Additionally, 25 million LUNA tokens designated for liquidity provisioning will also be burned. This move aims to reduce the circulating supply of LUNA and manage the token’s value.

Recent Bull Rally Boosts LUNC’s Social Metrics

These actions reflect TFL’s efforts to restructure and address financial obligations during the bankruptcy proceedings. They hold significant implications for the Terra Classic community and LUNA’s market dynamics, potentially influencing the token’s value and the broader ecosystem.

The reopening of the Shuttle Bridge provides a temporary opportunity for users to redeem their wrapped assets, a crucial aspect for those who have been unable to access their investments. The 30-day operational window is a critical period for users to take action before the permanent shutdown.

The transfer and burning of LUNA tokens represent a strategic move to stabilize and potentially increase the value of LUNA by reducing its circulating supply. By removing a significant number of tokens from circulation, TFL aims to address market concerns and enhance the token’s attractiveness to investors. Overall, these developments are part of TFL’s broader strategy to navigate the complexities of bankruptcy and regulatory compliance. 

As highlighted in our previous article, data from Santiment revealed that the recent bull rally positively influenced LUNC’s social metrics. A sharp increase in Social Volume indicated rising popularity among investors. Additionally, Binance has been contributing to LUNC burns, which was reported earlier this month. Despite these positive indicators, LUNC’s Weighted Sentiment remained negative, suggesting bearish market sentiment persists. Currently, LUNC trades at $0.00009013, reflecting a 2.9% increase, with a market cap standing at $489 million.