1. Simplified Overview
● The following is a quick and simple overview of this proposal:
● The proposal co-signers (Rex Wu & Victoria Critchley) have located off-chain assets worth over $1,500,000 which they wish to retrieve for the TC community
● The co-signers propose the formation of a legal entity that can interface with government authorities and regulators, for the purpose of securing those funds
● The co-signers will cover legal expenses, and have already queried attorneys while searching for off-chain assets… the co-signers will doxx / KYC to authorities
● The co-signers will not be requesting any money from LUNC’s Community Pool, but will instead be paid a 20% finder’s fee on all assets they manage to retrieve
● Net assets retrieved by the legal entity will be deposited within a “Terra Classic Recovery Fund”, after an 80/20 split (80% for the community, 20% for the co-signers’ fee)
● Depending on legal mandates, the money will be disbursed as a single deposit into a KYC-validator multisig and/or via direct airdrops & grants to TC community & builders
● After the funds have been secured and disbursed, the legal entity will be handed over to the Terra Classic community, to staff and use, as voted by community governance
● The co-signers pledge to handle the proceedings with full transparency, and if this proposal passes will act for the benefit of the Terra Classic community & and its holders
● The legal fees for this endeavour are somewhere in the range of $100,000 due to the estimated complexity of the proceedings, and will be covered fully by the co-signers
● If no assets are retrieved, then the co-signers will not be paid anything, regardless of how much money they’ve spent on legal fees throughout the retrieval effort
● The co-signers intend to secure at least $1,500,000 for the Terra Classic community, and possibly even more if their attorneys’ efforts are successful
Please note that the above is just a general outline for the sake of brevity.
For full details, see the individual sections below…
2. Introduction
The Terra Luna Classic community has long endured the consequences of being under-resourced and fragmented following the events that led to the collapse of the original Terra ecosystem, and subsequent abandonment of the chain by Terraform Labs and Kwon Do-Hyung. Despite its resilient and active community, Terra Classic remains financially constrained, severely limiting its growth potential, development initiatives, and ability to rebuild long-term value. What it needs is funding to pursue recovery and revitalization for its token holders.
The authors of this proposal have identified credible leads regarding off-chain assets that could be legally proven to have belonged to the Terra Classic ecosystem. If successful, potentially $1,500,000 or more will be secured and brought over to a transparent Recovery Fund, to be used for the benefit of the Terra Classic community. However, retrieving these assets requires the creation of a formally recognized legal entity – one capable of representing the interests of Terra Classic in legal proceedings and financial processes such as court briefs and public filings.
Thus, we propose the Terra Classic community authorizes the use of such a legal entity, for the purpose of laying claim to and retrieving said assets which used to belong to the chain. This entity will serve primarily as a liaison between the community and regulators, will have no control or claim over the current Terra Classic blockchain, will not influence its governance, nor will it impact this chain’s future development direction! Its purpose is to engage with financial institutions, asset custodians, and potentially regulatory bodies to reclaim funds that could be rightfully attributed to the Terra Classic community and its token holders.
3. Executive Summary & Detailed Course of Action
The purpose of this proposal is to seek community approval for the formation of a formalized and authorized legal entity, to transparently and lawfully pursue off-chain funds on behalf of TC’s community via the following steps:
● Establish a legal entity under the auspices of the proposal co-signers to represent the Terra Classic stakeholders in legal and financial matters related to asset recovery.
● Lawfully and transparently pursue over $1,500,000 in off-chain assets that can potentially be proven to have belonged to the Terra Classic blockchain and its community.
● Secure funding for the independent blockchain and validator set without new ties to Terraform Labs, in order to avoid regulatory breaches and ongoing entanglements.
● When required, make in-person appearances before regulatory bodies, government agencies, and disbursement courts, for the purpose of securing said funds.
● The co-signers will be fully KYC’d to the relevant authorities and jurisdictions, ensuring full transparency, accountability, and compliance in these matters.
● The co-signers will not seek any upfront funding from the LUNC Community Pool, neither now, nor at a later date, regardless of success in this endeavour.
● The co-signers pledge to ensure long-term sustainability and regulatory alignment under the banner of the legal entity by adhering to governmental mandates.
● The legal proceedings and entity will be self-funded by the co-signers, with them being prepared to invest up to $100,000 in judicial and administrative costs.
● The co-signers will receive a 20% finder’s fee on any money recovered, but only if funds are successfully retrieved. The community pays nothing if no funds are secured.
● All recovered assets will be vetted by authorized government entities like courts, which upon successful resolution will forward the money to the Terra Classic Recovery Fund.
● Control over the TC Recovery Fund will be entrusted to KYC’d chain representatives who volunteer for the duty. This will be done under the watchful eyes of accredited attorneys.
● Retrieved monetary assets (minus expenses like taxes & the finder’s fee) will remain in the Recovery Fund until at least five (5) fund stewards are selected as transitory guardians.
● Once secured and received by the Recovery Fund, the assets will be used for the benefit of the LUNC community. The co-signers lay no claim to those assets, outside of their finder’s fee.
● Final asset disbursement will be made pursuant to legal mandates. Depending on proceedings outcome, it may be necessary to prove absence of TFL affiliation to satisfy regulatory compliance.
● If the chain fails compliance, or fails to secure at least five (5) KYC’d volunteer-representatives, then asset disbursement will be handled by the legal entity via airdrops/grants to the TC community.
● Upon successful completion of its task, the legal entity will be handed over to the Terra Classic community for future use, and can be staffed by KYC’d community members who volunteer for the duty.
Note: We would have preferred to deposit all recovered assets directly into the chain’s Community Pool, but for reasons tied to TFL’s ongoing legal entanglements we are forced to set things up as outlined above on the advice of our legal counsel. Still, the extra administrative work is worth the effort because any money we manage to recover through the legal entity will be made available to the Terra Classic community as soon as possible via the Recovery Fund. Please note that it is critically important for the Terra Classic community to legally distance itself from Kwon Do-Hyung and Terraform Labs (TFL), due to both the former and latter currently being under judicial scrutiny for allegedly fraudulent conduct. In order for us to pursue, secure, and retrieve assets for the chain’s holders, we must comply with regulatory bodies and do things ‘by the book’! Otherwise we risk legal consequences and loss of securable assets. Likewise, any chain representatives (a la validators) who wish to volunteer as asset guardians will need to satisfy legal compliance (KYC).
All in all, we are looking to retrieve at least $1,500,000 from off-chain sources… possibly even more, if our intel is correct and things go according to plan.
4. Elaboration
i) Why the Terra Classic Community Is Struggling
Despite a massive loss of confidence after the initial crash in 2022, Terra Luna Classic has remained afloat thanks to its dedicated grassroots community and validator network. However, unlike many Layer-1 blockchains in the current market, LUNC operates without the financial support of a centralized foundation, VC backing, or significant institutional partners. Thus, the chain’s development and ecosystem growth relies almost exclusively on community-driven initiatives and the limited funds available in the Community Pool.
Unfortunately, the chain’s existing funding mechanisms are insufficient to support robust ecosystem development, technological innovation, large-scale marketing, long-term sustainability, or ambitious USTC repeg plans. While there is strong community interest in proposals such as USTC repeg strategies, buyback-and-burn initiatives, validator delegation incentives, and development grants, all of these efforts remain constrained by the financial limitations of the Community Pool! Not only that, the Oracle Pool itself is steadily dwindling, and validator payouts will be running thin in the near future.
In short, the Terra Classic community is in desperate need of restitution, and the off-chain assets we’ve identified will go a long way toward that. If we are successful in our endeavour, we will bring some of that money back to the people it rightfully belongs to – you!
ii) Why Off-Chain Funds Are Worth Pursuing
In light of this situation, the proposal authors have spent considerable time and money researching and identifying credible off-chain financial sources that may contain mothballed assets. Multiple bank accounts, custodial holdings, exchange balances, and escrowed funds were once linked to or earmarked for Terra (pre-crash), but were never reclaimed or disbursed. The LUNC community has a legitimate claim to some of these! Such funds could now, if legally validated, be redirected back to the Terra Classic community, which in some instances is the rightful heir of the abandoned or orphaned assets from the former ecosystem!
To be clear, this is not about speculative donations or hopeful funding appeals. The focus is on pursuing real, tangible, legally substantiated and recoverable funds, grounded in ownership records, transactional evidence, and historical documentation. However, pursuing such claims requires legal standing… which unfortunately the blockchain, as a decentralized entity, cannot provide on its own. Without a recognized lawful interface and representation, the Terra Classic community has no voice in courtrooms, no authority to sign documents, and no legal presence to assert rightful claims.
This is where the formation of a centralized legal entity becomes essential.
iii) Why This Approach Benefits the TC Community
This proposal offers holders a high-reward, zero-risk model:
1. If no money is recovered, the community loses nothing. The proposal co-signers cover upfront all administrative, legal, and judicial costs.
2. If funds are successfully retrieved, the net proceeds go directly into a transparent Recovery Fund, for the community’s benefit.
3. The community retains autonomy, transparency, and oversight pertaining to the final distribution of recovered assets.
The potential upside is tremendous! Based on preliminary legal scoping and early discussions with confidential sources, there is a highly credible chance of recovering at least $1,500,000 in off-chain assets for the Terra Classic community, perhaps even more depending on legal interpretation! Even if only a portion of that is secured, it would mark a seismic shift in the economic health of the original chain’s token holders.
A stronger asset balance empowers stakeholders to potentially:
1. Support community initiatives and grants programs.
2. Fund independent project developers and protocol upgrades.
3. Deploy validator support packages to help them stay profitable and engaged.
4. Provide liquidity for ambitious token strategies that require upfront investment.
5. Execute significant, long-term buyback-and-burn campaigns alongside marketing pushes.
6. Offer validator or staking incentives to attract new participants and builders.
In short, this proposal gives LUNC’s community a realistic path toward revitalization and recovery on a TFL-independent blockchain, without needing to raise or spend any current on-chain capital. It taps into external resources and converts them into actionable, decentralized value aimed at recovery and restitution!
5. Potential Difficulties & Legal Obstacles
While the potential upside of recovering these off-chain funds is significant, it’s equally important to acknowledge the inherent challenges, complexities, and risks involved in this kind of legal and financial endeavour. This is not a simple or guaranteed process; what we’re proposing is time-intensive, procedurally complicated, and above all, costly.
Below are the primary categories of obstacles the legal entity will need to overcome:
i) Legal and Jurisdictional Barriers
Asset recovery is governed by varying legal systems across multiple jurisdictions, depending on where the assets are located or where the custodians are incorporated. The legal entity must:
1. Retain competent legal counsel via an accredited law firm with expertise in cross-border asset recovery, crypto asset tracing, and banking law.
2. Successfully navigate KYC/AML compliance, proof-of-beneficiary requirements, and data privacy regulations… all while pursuing multiple sources of funding.
3. Demonstrate that the Terra Classic community (via its governance approval and backing) is the legitimate successor and beneficiary of the funds in question.
4. Present a coherent case in jurisdictions that may be sceptical of decentralized governance models and non-corporate entities such as crypto chains.
This requires precise documentation, expert representation, and well-prepared legal briefs… each of which adds to the time and financial burden.
ii) Institutional Resistance
Current custodians of the potentially recoverable assets may not be cooperative or responsive by default. These institutions will probably:
1. Require notarized legal claims or court orders before releasing any money to the Terra Classic community.
2. Demand detailed structure and compliance information from the legal entity and its officially authorized handlers.
3. Challenge the legitimacy or authority of the claim, especially when dealing with a decentralized blockchain community.
4. These challenges may necessitate prolonged legal correspondence, official demands, or even litigation, which can escalate legal costs and timelines significantly.
iii) Financial Commitment and Risk
The authors of this proposal are prepared to commit upwards of $100,000 in out-of-pocket legal and administrative expenses, including but not limited to:
1. Engagement of professional attorneys
2. Official formation of the legal entity
3. Ongoing filing and court / judicial costs
4. Due diligence and asset (forensic) tracing
5. Compliance consultations and documentation fees
Importantly, these upfront costs will be funded regardless of overall success or failure in retrieving the off-chain assets. If no assets are successfully recovered, then the proposal co-signers absorb the full financial loss, and the Terra Classic community incurs zero cost or legal liability. Essentially, this is for the co-signers a risk-intensive, front-loaded endeavour, requiring personal capital, patience, and legal endurance. The decision to undertake this initiative was not made lightly, but is being done in service of the long-term sustainability for stakeholders. A legal entity is required to act as liaison between the community and authorized government agencies, as well as to shield the LUNC community and act as a bridge between it and regulatory organs!
This recovery effort may take multiple weeks to reach resolution. Court cases, compliance reviews, asset release negotiations, and inter-jurisdictional document processing all involve slow-moving timelines. Community patience and trust will be required as the legal entity and our attorneys work through this process, providing periodic updates as progress is made. What complicates matters is the fact that the sourcing and retrieval of these funds is a time-sensitive matter. The window of opportunity is rapidly closing, and the Terra Classic community must lay claim to these assets as soon as possible. Then once the legal matters are underway we will be able to pursue the money, but it is critically important to get moving sooner than later, lest the community loses this opportunity.
6. Guardrails & Guarantees
Crypto itself is a trustless space, but as mentioned above, both proposal co-signers will be known to the authorities as compliant via disclosed identities, and their names will be on legally binding documents.
For the sake of thoroughness, we are including a list of what the Terra Classic community can expect from us and this plan, which clearly defines the scope of our endeavor :
● Formal audit of all retrieved fund flows
● Frequent public updates (where legally permissible)
● Payments, reports, and legal updates both posted and tracked
● The entire retrieval effort will be self-funded by the proposing team
● The Terra Classic treasury and Community Pool will not be drawn from at all
● Fiduciary duties (we must act in the best interest of the community at all times)
● This appointment does not give control over LUNC’s governance, treasury, or chain development
● The community-approved mandate cannot be sold, reassigned, or delegated without a new governance vote
● Only if recovery is achieved will a 20% success fee be paid to the proposers… if there is no recovery, no fee is due
● Terra Classic’s community is indemnified and shielded by the legal entity, and will receive 80% of all recovered net assets
● The legal entity used for the proceedings will be handed over to the community upon conclusion, and can be staffed via governance votes
● These terms will be formalized in a full Legal Agency Agreement, executed immediately upon passage of this proposal
● Final report to the community, and passing of acting powers upon conclusion of fund disbursement endeavours
Once this proposal is approved through governance, the legal entity shall be granted an irrevocable and exclusive mandate to pursue the recovery of specific off-chain funds on behalf of the Terra Classic community, until such a time as the court proceedings are completed, and the legal entity is handed over to the Terra Classic community. This mandate shall not be subject to reversal, revocation, or further governance votes, as such actions would interfere with legal standing and jeopardize ongoing or future recovery efforts. It is thus paramount that the conditions outlined herein remain binding for the duration of the legal entity’s involvement in this matter, to ensure an expeditious pursuit of off-chain assets for Terra Classic. Likewise, the terms and conditions outlined herein which bind the co-signers will remain unchanged, as will their fiduciary duties to the Terra Classic community!
Put simply: this governance proposal is legally binding for both sides (the Terra Classic community, and the co-signers).
7. Conclusion & Call to Action
We believe this initiative is a milestone opportunity for the Terra Luna Classic community… one that requires zero risk to it, but holds the potential to unlock over $1,500,000 in disbursable assets for community recovery!
This is not a vague promise or baseless endeavour, but rather a serious and professional effort to pursue real, legally claimable and quantifiable assets. The proposal authors are willing to act transparently, at great personal cost, and in full view of the community, to help restore financial strength to token holders harmed by LUNC’s impoverishment, and recover assets owed to the chain’s community. We have in detail weighed the risks of this endeavour, and after indepth discussion with attorneys we’ve decided to pursue this plan of action. If successful, we will bring a seven-figure sum for the recovery and revitalization of the Terra Classic community! But first, governance approval is needed before we can take legal action on behalf of the chain’s token holders.
So we respectfully urge the Terra Classic community to support this proposal and vote YES to:
✅ Authorize the creation of a centralized legal entity for asset retrieval
✅ Support the performance-based recovery model with a 20% net finder’s fee
✅ Empower the co-signers to represent the community in (IRL) legal channels
✅ Accept net retrieved assets into the TC Recovery Fund for TC community benefit
✅ Agree to comply with legal/court mandates for the purpose of asset disbursement
✅ Uphold the terms & conditions in this proposal until proceedings are finalized
✅ Inherit (and staff via KYC) the legal entity once its work has been completed
Together, we can take this first step toward reclaiming assets that rightfully belong to the Terra Classic community!
For discussion and transparency, we welcome feedback on this forum prior to submission for on-chain vote.
Co-signers,
Rex Wu
Victoria Critchley
