TerraUSD supporter vows to compensate some users

An affiliate of the company behind collapsed stablecoin TerraUSD has said it had spent the bulk of its reserves trying to defend its dollar peg last week.

The company also said it would use the remainder to try to compensate some users who had lost out.

The token’s crash last week sent cryptocurrencies tumbling. The slide resumed on Monday, as bitcoin gave up the gains it had eked out over the weekend

The world’s largest cryptocurrency fell 5% to around $29,700 on Monday in Asian trade, sliding alongside stocks because of worries about high inflation and rising interest rates.

Luna Foundation Guard (LFG), a Singapore-based non profit designed to defend TerraUSD, said on Twitter it would use its remaining assets to compensate remaining users of the so-called stablecoin, starting with the smallest holders, though it had yet to decide the best method of doing so.

The organisation had built up a large reserve including over 80,000 bitcoin and millions of dollars worth of other stablecoins to support TerraUSD, the majority of which it said it had spent trying to prop up the token last week.

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