A major milestone has been reached in the aftermath of the Terra/LUNA collapse as Terraform Labs finalized a settlement with Three Arrows Capital (3AC) in the U.S. court-approved deal worth $1.3 billion. This landmark agreement serves as a precedent for future digital asset failures and sets the stage for how similar cases will proceed moving forward. 3AC’s bankruptcy claims related to the Terra ecosystem collapse have been resolved, leading to immediate effects such as alignment of their legal status with other affected investors within the crypto space. The settlement also provides clarity on the handling of assets like LUNA and UST within the Terraform ecosystem. While the settlement avoids new institutional investments and focuses solely on legal resolution, it will have a significant impact on asset recovery efforts.