A Brazilian cryptocurrency exchange has taken the unprecedented step of using its own funds to fully repay consumers for their TerraUSD coins.
On May 20, local media reported that the Brazilian Nox Bitcoin exchange has reimbursed all UST holders with Tether’s USDT at a $1 rate.
According to the article, the crypto brokerage firm paid 620,000 Reais ($US127,000) to compensate all of its customers who lost money due to the Terra ecosystem collapse.
“FatMan” of the Terra research forum speculated that the move could create a precedent for global exchanges:
“This case may be used as key precedent to argue that exchanges are liable for UST losses if tortious misrepresentations were made.”
The exchange indicated that the difference between the current UST rate and the dollar peg it collapsed from will be refunded. This means that a holder of 100 UST at $0.06 will receive a 94 USDT refund.
According to Nox Bitcoin CEO Joo Paulo Oliveira, the company is not obligated to bear the losses of clients that invest in certain currencies on its platform, but they opted to act to ensure their customers’ trust. He continued (in translation):
“Clients have trusted us with staking and we understand that their trust is much more valuable than anything else. We’re going to reimburse these users minus the expenses we’d have elsewhere, like marketing.”
Nox Bitcoin also offers staking services, such as Anchor Protocol, which is heavily used by UST. The DeFi protocol offered up to 20% APY on UST staking and was widely blamed for the system’s demise due to these unsustainable returns.
Oliveira also stated that they are waiting to see what happens next with UST and LUNA’s listing. “It’s probable the Terra ecosystem no longer exists,” he said, before adding, “but the cryptocurrency market is unpredictable, and anything can happen, including the Terra ecosystem’s eventual rebirth.”
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Patrick
CoinCu News
