TerraUSD backer rewards more users amid bitcoin crash


A partner of the company behind the stablecoin TerraUSD said on Monday that it spent most of its reserves trying to protect its dollar token last week, and will use the rest to try to compensate some of the lost users.

The fall of the symbol last week led to a fall in cryptocurrencies, a trend that resumed on Monday, as bitcoin gave up the gains made at the end of the week.

The world’s largest stock fell 5% to $29,700 on Monday in Asian trade, moving in tandem with stocks on concerns about high inflation and rising interest rates.

Bitcoin has lost about a fifth of its value this month, due to the spectacular fall of TerraUSD, which should be pegged 1:1 to the dollar but is currently trading at 14 cents, threatening crypto market.

Also read: Crypto world stable after rock stablecoins rock week

Luna Foundation Guard (LFG), the Singaporean non-profit designed to protect TerraUSD, said on Twitter on Monday that it will use its remaining assets to pay the remaining users of the stablecoin, It starts with small owners, although there were. to choose the best way to do it.

The organization built a large reserve consisting of more than 80,000 bitcoins and millions of dollars worth of other stablecoins to support TerraUSD, much of which it said was spent on trying to install the marked last week.

LFG previously pledged to raise $10 billion in bitcoin. The reserve was down to 313 bitcoin as well as other assets as of now, it was tweeted.

Crypto master regulator

The event drew special attention, including from financial authorities, to stablecoins and the role they play in the crypto system as a main means of transferring money between cryptocurrencies or the transfer of balances to fiat money.

The Governor of the Bank of France Francois Villeroy de Galhau said at a conference that crypto assets can disrupt the international financial system if they are not regulated and linked in a consistent and appropriate manner to jurisdictions.

Also read: Bitcoin eyes record steady loss as ‘stablecoin’ collapse crushes crypto

He pointed to stablecoins, which he says are somewhat misnamed, as one source of danger.

In his separate speech, Fabio Panetta, the member of the board of the European Central Bank, also said on Monday that stablecoins are easy to run.

Tether, the world’s largest stablecoin, briefly lost its 1:1 token on May 12, but has not recovered. Unlike TerraUSD, Tether is backed by investments in real assets, according to its operating company.

On the same day, bitcoin fell to $25,400, its lowest level since December 2020, but recovered to as high as $31,400 on Sunday.

Ether, the second-largest cryptocurrency, fell 5.6% to around $2,000 on Monday.

The jury is also concerned in other areas. The US Federal Reserve warned last week that stablecoins are vulnerable to investment because they are backed by assets that may or may not fall in value during market crises.


Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *