Nox Bitcoin is a Brazilian cryptocurrency exchange that has used its own money to reimburse customers who purchased TerraUSD coins at full price.
Following local media’s report on May 20, the Nox Bitcoin exchange has refunded all UST holders at a $1 rate with Tether’s USDT.
According to the report, crypto brokerage firms were paid 620,000 Reais ($127,000). This amount was paid by the exchange to all customers who suffered losses due to the Terra ecosystem collapsing.
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“FatMan” of the Terra research forum commented in a tweet on May 20 that the decision might set a global precedent for other crypto exchanges.
Tweet:
This is quite important. Brazilian cryptocurrency exchanges have refunded all UST owners at a 1:1 basis with USDT. This case could also be used to prove that the exchanges can lose UST. If the tortious misrepresentations are made.
Lucky Ones Get a $1 UST Refund
According to the exchange, it will refund customers any difference in the current rate of UST and its dollar peg that was lost. Accordingly, a holder holding 100 UST worth $0.06 would receive a refund in the amount of 94 USDT.
According to Nox Bitcoin CEO Joo Paulo Oliveira, the firm is not responsible for bearing clients’ losses from investing in certain currencies on its platform. Yet, they decided to intervene to ensure their customer’s trust.
He continued;
Our clients have placed trust in us to staking, and we know that this trust is more important than any other. As a result, we’re going to reimburse these users minus the expenses we’d have elsewhere, like marketing.
It was an unexpected relief that brought positivity to cryptocurrency. But, decision by the Nox Bitcoin exchange reflects the Brazilian customer protection regulations.
The exchange offers staking options, including Anchor Protocol. This is a service that UST highly uses. Up to a maximum of 2,000 DeFi protocols were offered. 20% APY for UST staking. This was mainly because of the unsustainable yields that were primarily responsible for its fall.
Now, people are waiting to find out what the next steps will be regarding listing UST or LUNA. “It is possible that this will no longer exist in the near future,” stated Oliveira before adding, “but you never know what can happen in an unpredictable crypto market.”
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Based on TradingviewUST trades at $0.067, with a 1% rise at the time this article was written. The “unstablecoin” has withdrawn 93% from its peg. It is not likely to return to that level without significant intervention, such as TerraForm Labs’ hard fork.
Also, TerraForm’s LUNA has dumped a similar amount. The coin now trades at $0.00020, with $1.35 Billion in market capital and 6.5 Trillion tokens.
Featured image taken from Flickr. Chart taken from Tradingview.com