Core Viewpoint - A U.S. bankruptcy court has approved a settlement between Terraform Labs and Three Arrows Capital (3AC) regarding a $1.3 billion claim related to the 2022 collapse of the Terra/LUNA cryptocurrency [1][2]. Group 1: Settlement Details - The court ruling, issued by Judge Brendan L. Shannon, determines the treatment of 3AC's claim in Terraform Labs' ongoing Chapter 11 bankruptcy [2]. - 3AC's losses will be classified as a "Crypto Loss Claim," which is significant as it aligns 3AC with other investors who lost money in the Terra ecosystem during the crash, resulting in a nearly $60 billion market value wipeout [3][4]. Group 2: Dispute Resolution - The agreement concludes a months-long dispute between Todd Snyder, the plan administrator for Terraform, and 3AC's liquidators, representing creditors in 3AC's bankruptcy proceedings [5]. - Under the court order, 3AC will withdraw its original claim but retains the option to refile portions later if certain damages are deemed outside the "Crypto Loss Claims" rules [5]. Group 3: Claims Process - Claimants must file their claims online by May 16, 2025, for losses related to cryptocurrencies created by Terraform or held within its ecosystem that became worthless after the second de-peg of its stablecoin from the U.S. dollar [6]. Group 4: Broader Implications - Terraform's bankruptcy plan, confirmed in September 2024, established a Wind-Down Trust to manage asset liquidation and creditor fund distribution [7]. - This ruling marks a significant step in coordinating responses between the bankruptcies of Terraform Labs and Three Arrows Capital, potentially influencing future digital asset failure disputes [7].