InsurAce will pay some Terra bankruptcy victims $11 million

The collapse of the stablecoin UST has not finished talking. Recently, Brazilian exchange Nox Bitcoin refunded all UST holders at a 1:1 ratio. In the United States, it is decentralized finance protocol (DeFi) insurance provider, InsurAce, which has just announced that it has processed almost all of the 173 requests submitted to its services and that it will pay beneficiaries $11 million .

The thorny issue of compensation for the damage suffered by UST investors

On May 13, InsurAce had drawn the ire of netizens by suggesting that the claim period for people covered by Anchor (ANC), Mirror (MIR), and stablecoin Terra USD (UST) would be extended after the collapse would shorten the Terra Layer 1 blockchain from 15 to 7 days. Amid the outcry this announcement sparked on social media, DeFi’s insurance protocol reiterated that it was perfectly within its rights to reduce the claim period for individuals from 15 days to 7 days – but added that it already has almost all of the Processed 173 claims filed and is paying out $11 million.

Dan Thomson, InsurAce’s Chief Marketing Officer, said: “It is within our Terms of Service to make such changes. We felt it was unnecessary to delay the process on behalf of those who lost money and the stakers who should pay the claims. »

Crisis of confidence in InsurAce

For the crypto community, InsurAce wanted to reduce the amount of claims they had to pay. FatMan, a member of the Terra Research Forum, told his 52,000 Twitter followers on Tuesday that InsurAce had done “a dirty trick” and that the company shouldn’t try to “dodge” its business with customers.

On the InsurAce side, we want to be reassuring. Thomson will insist that apart from those that were denied, most of the 173 applications submitted had already been processed and that the protocol was willing to pay around $11 million to applicants. He added : ” We want the best for everyone here, but if this was traditional insurance, people would be stuck in litigation for months or years.. »

Thomson also indicated the protocol could consider processing claims for the remaining 61 coverages that have yet to be filed.

The collapse of Terra and UST has caught the attention of regulators around the world. South Korea’s legendary financial crime unit, The Reapers of Yeoui-do, has been revived to find out if any crimes were being committed by Kwon or the Luna Foundation Guard (LFG), who were managing Terra’s funds.

In case the UST disconnect wasn’t just a protocol error, Thomson pointed out that InsurAce may also be able to take legal action. However, he said: I’m sure Terra and LFG have other fish to fry, so we’ll cross that bridge when we get there “.

The UST crisis will definitely have been a textbook case for the cryptocurrency ecosystem, in the sense that it has raised certain issues with poignancy, such as the insurance policy for the risks associated with crypto assets.

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Luc Jose Adjinacou

Far from dampening my enthusiasm, an unsuccessful cryptocurrency investment in 2017 only heightened my enthusiasm. I therefore decided to study and understand the blockchain and its many uses and use my pen to share information related to this ecosystem.

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