Are my assets safe from the recent LUNA and UST turmoil?

Last updated on 04 May, 2024 6 min read
Image by jagritparajuli99 from Pixabay
Table of Contents

Around 9 May 2022, Terra’s algorithmic stablecoin UST de-pegged and LUNA crashed from $100+ to almost zero. Prior to the crash, UST was the 4th largest stablecoin and the 10th largest cryptocurrency by market cap.

Consolidating statements from some of the crypto platforms covered on this site regarding their exposure to LUNA and UST.

Platforms

Celsius Network

(Update) Celsius Network has since paused withdrawals on 13 June 2022 and subsequently filed for Chapter 11 reorganization in July 2022

Celsius Network CEO Alex Mashinsky tweeted:

DeZy

DeZy wrote a blog article to address this concern from customers.

DeZy is not impacted by the events related to UST or the Terra / Luna ecosystem. Funds are safe.

We only build on top of XSGD and USDC.

Haru Invest

Received email from Haru Invest on 13 May 2022:

Haru Invest only supports three types of cryptocurrencies: Bitcoin, Ethereum, and USD Tether. We do not support LUNA or UST nor do our trading strategies rely on these currencies. Hence, we have not experienced any related losses.

We take the security and stability of your assets very seriously and would like to assure you that our in-house trading team implements strategies that focus on increasing the volume of your crypto assets, regardless of market volatility.

In addition, we do not rely on other DeFi or CeFi platforms, such as Anchor Protocol for maintaining your assets.

Hodlnaut

(Update) Hodlnaut has since halted withdrawals, tokens swaps and deposits on 8 August 2022

Hodlnaut shared on Discord:

Hodlnaut is NOT all-in on UST as one particular rumour on Reddit has mentioned. This is an unbased claim. Yields on USDC/USDT/DAI are generated in-kind and paid by our loans to institutions and a small amount to DeFi Protocols like Compound Finance.

Following on the above point, Hodlnaut has risk management policies in place in case of any worst-case scenarios like the one UST is currently facing - a de-peg from $1. We have already put forth this policy and have mitigated the risk moving forward.

We would like to point you back to the ToS at www.hodlnaut/com/tos and the disclaimer all users have agreed to before registering for an account if you have any questions about any compensations and liaibility claims of any sort - we unfortunately do not and will not cover it as stated.

However, following the above point, withdrawals are not halted on all assets. Business and operations are as usual.

Midas Investments

On 27 December 2022, Midas.Investments sent out an email announcing the closure down of the platform as a fixed yield CeFi platform with a 50 million deficit on their books. Many clients are set for a loss.

In the spring of 2022, the Midas DeFi portfolio suffered a cumulative loss of 50 million dollars (20% of $250 million AUM). After Celsius and FTX events, the platform experienced over 60% of AUM being withdrawn, creating a large asset deficit. Based on this situation and current CeFi market conditions, we have reached the difficult decision to close the platform.

…

Mr Iakov “Trevor” Levin, the CEO of Midas Investments, shared on Discord:

We have also de-risked our stable coin portfolio from any depeg scenarios.

Additionally, Midas did not have UST in its portfolio and monitors all other stable coins carefully on all exchanges and major wallets.

This is one of the most intense days in crypto and your funds safety is our core priority.

Nexo

Nexo tweeted:

StableHouse

StableHouse tweeted:

Stablecoins

dUSD on DeFiChain

DeFiChain blog post: The Differences Between UST on Terra And DUSD on DeFiChain

DeFiChain Twitter Spaces:

“The supposed stablecoin UST is crashing, and some people from the community have voiced concerns if the same thing might happen to DUSD on DeFiChain. In this Twitter Spaces, we discuss the major differences between UST and DUSD and why there is absolutely no reason to worry about DUSD on DeFiChain right now.”

Gemini dollar (GUSD)

Email from Gemini:

#1. Stable and fully-backed: Gemini achieves stability for GUSD by pegging its value in a 1:1 ratio to the U.S. dollar and collateralises each Gemini dollar against a U.S. dollar held in a Gemini Trust account. For every GUSD in existence, Gemini holds one U.S. dollar.

#2. Fully audited: Our GUSD reserves are audited monthly by an independent registered accounting firm. Plus, the Ethereum smart contract has been audited by Trail of Bits, a leading information security research and development firm.

#3. Transparent to all: Anyone can view the stablecoin’s transaction history, current price, market cap, and other data on an Ethereum network block explorer.

Resources

Local news coverage

Mental health and counselling support

  • National Care Hotline: 1800-202-6868
  • Fei Yue’s Online Counselling Service: eC2.sg website (Mon to Fri, 10am to 12pm, 2pm to 5pm)
  • Institute of Mental Health’s Mental Health Helpline: 6389-2222 (24 hours)
  • Samaritans of Singapore: 1800-221-4444 (24 hours) / 1-767 (24 hours)
  • Singapore Association for Mental Health: 1800-283-7019 (Mon to Fri, 9am to 6pm)
  • Silver Ribbon Singapore: 6386-1928 / 6509-0271 (Mon to Fri, 9am to 6pm)
  • Tinkle Friend: 1800-274-4788 (Mon to Fri, 2.30pm to 5pm)
  • Touchline (Counselling): 1800-377-2252 (Mon to Fri, 9am to 6pm)
Celsius Network DeFiChain DeZy DUSD Gemini GUSD Haru Invest Hodlnaut LUNA Midas Investments Nexo StableHouse Terra UST
Admin
Admin

Started investing in crypto towards the end of 2020.

Related