Brazilian brokerage firm will spend BRL 620,000 to reimburse investors affected by the meltdown of stablecoin UST

Charlie Taylor

Brazilian exchange Nox Bitcoin has decided that it will reimburse all its customers who lost money in the last week with the fall of the UST token, the algorithmic stablecoin of the Terra blockchain (LUNA). As it is paired with the US dollar, the UST should always be worth US$1. However, the death spiral that hit the Earth ecosystem last week took the price of the UST to the US$0.06 recorded this Friday (20 ). Because of this, Nox will replace the money lost by customers who had UST stored in the platform’s wallets before the collapse. For example, if the investor had 1 UST and the currency is currently worth $0.06, Nox will deposit another $0.94 into your account. This refund will be in the form of USDT, Tether’s stablecoin. Nox Bitcoin CEO João Paulo Oliveira told the Bitcoin Portal that at least R$ 620 thousand will be spent on this action. Oliveira says that, although the broker is not obliged to bear the losses of clients who invest in specific currencies on its platform, they decided to intervene at that moment to guarantee the confidence of their base. “Clients have trusted us to stake and we understand that their trust is far more valuable than anything else,” she explains. “We’re going to reimburse these users minus the expenses we’d have elsewhere, like marketing.” He points out that customers who bought UST after the currency fell, in the hope that the price would rise again, will not be reimbursed.

UST and LUNA are still listed

In addition to allowing the buying and selling of cryptocurrencies, Nox Bitcoin also allows customers to staking to generate passive income. One of the services was UST staking, which generated profits through the Anchor Protocol, Earth’s premier DeFi project that promised to pay an annual return (APY) of 19.5%. According to João Paulo Oliveira, the option to make staking available through the Anchor Protocol was that UST was one of the currencies that grew the most in terms of traded volume, and part of the clients were interested in exposing themselves to the project. When asked if the broker would continue to list the currencies of the Terra ecosystem and use the Archor Protocol, Oliveira said he will wait for the developments of the case to make a final decision. For now, the coins are still available on the platform. “We are waiting for the next steps to see in which direction the market goes. It is possible that the Terra ecosystem no longer exists, but the cryptocurrency market is unpredictable and anything can happen: including the eventual resurgence of the Terra ecosystem.” He adds that preventing customers from exposing themselves to risk and protecting them from possible loss of money means preventing them from making money. “This is not our role”, explains Oliveira. “Our role is to curate, seek out serious projects and make them available on the platform, always focusing on passive income, which is the great trend in this market”. Despite this, the exchange has committed to creating a risk-rating scheme to alert investors about the projects they are putting money into.

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