NoxBitcoin to spend 620,000 Brazilian reais to reimburse its users

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NoxBitcoin to spend 620,000 Brazilian reais to reimburse its users

Brazil-based NoxBitcoin exchange announced that it will spend 620.000 Brazilian reais to reimburse UST holders, according to Portal do Bitcoin.

The exchange will make up the difference between the current value of UST $0.08 to make sure each UST holder has $1 for each 1 UST held.

Users were allowed to stake their UST to get a return like many exchanges worldwide. The exchange said it was able to stake the token on behalf of its customers via the Anchor Protocol, which offered up to 20% APY on stable coin staking. The exchange does not appear to have any insurance or guarantee that would require it to reimburse holders. NoxBitcoin CEO Joao Paulo Oliveira said

The investors who bought UST before the de-peg will be reimbursed for their token. Both LUNA and UST are still listed on NoxBitcoin, with LUNA down over 99% and UST down over 90%.

The exchange is waiting for the next steps to see which direction the market will go, and the coins are still listed. There is a vote to decide whether to fork the Terra blockchain to create a new LUNA coin alongside a Luna Classic LUNC coin.

Oliveira believes that NoxBitcoin's role is not to prevent customers from being exposed to risk as this also means preventing them from making money. He believes that its role is to curate quality projects for its customers to invest in.

The rationale for refunding its users may not only be related to creating goodwill among its customers. FatMan from the Terra Research Forum commented, "Furthermore, that is a fact."

There is no information regarding what will happen to coins created due to the upcoming fork of the TerraBlockchain. Any coins issued due to a block chain fork will be distributed to the exchange's wallet. It's up to each exchange to distribute coins to individual investors.

Users who are reimbursed by NoxBitcoin will get the new LUNA coins that are issued to both pre-attack and post-attack holders of UST will be interesting to watch. An argument is that forking the TerraBlockchain and assuming that it retains its value from before the attack inflates the money supply by up to $16 billion.

Supposedly, investors have been reimbursed for their holdings and received new LUNA token of equivalent value. In that case, a question arises: Where does this additional value come from? If the proposal passes, watch out for the end of the current Terra vote, which is scheduled to take place on May 27, 2022.