In a press release, the French cryptocurrency specialist announces “significant consequences” on its lending product.
A wind of panic is blowing through the stablecoin market, and the first consequences are starting to be felt. The French company Just Mining, which notably offers crypto investments for savers, has just paid the price. In a press release published on Wednesday, Just Mining indicates that “this event has important consequences” on its lending product.
In fact, Just Mining announces that it has exposure to the UST at 40%. However, with the fall in the price of the latter, some customers will lose part of their bet. The company offers them two options: withdraw their funds or leave them hoping for a rise in the price of the UST to the level of the dollar. If the user chooses to immediately exit the position, the approximate loss calculated based on the UST will be communicated just before the final validation:
“For example, with a UST at $0.52 (11.05.22 at 4:30 p.m.) and an exposure at 39.58% of the lending, a client under these conditions will validate a loss of 18.98% of his position”, specifies Just Mining .
For those who want to stay, and bet on a rise, “you agree to take the risk of losing up to 39.58% of your portfolio in the event of a drop in the UST to $0. On the other hand, if the price of the UST returns to its original value, your loss will be non-existent (or reduced) if it manages to regain parity with the dollar.”
For some users, who thought they were safe and not exposed to UST, this is a bad surprise. Indeed, as the company specifies in its press release: “Regardless of the stablecoin in which you invest on our platform, your capital is divided into different stablecoins”, including the UST.
Clearly, when a user subscribed to a stablecoin A, JustMining could convert it into A, B, C, D… A process which was specified in the general conditions of sale.
In order to prevent its customers from losing all their funds, Just Mining guarantees to cover its affected customers up to 1250 dollars, “thus allowing full coverage for 73% of our customers using this service and partial coverage for the others”, states the press release. An “exceptional, albeit modest gesture” which “illustrates our desire to support you as much as possible”, continues the company.