DeFi insurance company InsurAce claimed that it acted entirely legally when it reduced the deadline for filing damage claims in connection with the downfall of the Terra (LUNA) blockchain project from 15 to just seven days. In this regard, the insurer adds that almost all requests received on time have already been processed and a total of USD 11 million in damages will be reimbursed.
InsurAce (INSUR) is the third largest insurance project within Decentralized Financial Services (DeFi) with a market value of $15 million.
On May 13, InsurAce sparked an outcry when the insurer suddenly shortened the application period for affected crypto investors in the wake of the crash of stablecoin TerraUSD (UST) and associated cryptocurrency Terra (LUNA). Investors in associated DeFi projects Anchor (ANC) and Mirror (MIR) were also affected.
INSUR Marketing Director Dan Thomson told Cointelegraph that the move was imperative for Terra’s 234 eligible investors to avoid further losses, as the UST had already plunged to just $0.08 on May 13. To which he adds:
“Our terms and conditions give us the right to do so. We believe it was in the interest of investors who suffered damage and stakeholders who need to recover that damage not to unnecessarily delay the recovery process.”
However, in the crypto community, this decision was met with strong criticism, as some voices suspect that InsurAce only shortened the application period to reduce its own financial burden of claims. The crypto user Fat Man From Terra Research Forum they therefore qualify the passage to their 52,000 followers as a “dirty game”, the insurer should not “escape” responsibility in this way.
A dirty move @InsurAce_io – set an arbitrary ‘claim deadline’ after which UST holders who purchased depeg insurance cannot get their money back. I know they didn’t charge premiums for a long time, but that’s how it works: a promise is a promise, don’t run away. pic.twitter.com/5dYuN7hGOZ
— FatMan (@FatManTerra) May 23, 2022
Thomson counters that of the 173 applications submitted, nearly all have been processed and approved so far, meaning his project will pay out some $11 million in damages. Plus:
“We just want the best for everyone involved, but if we were a traditional insurance company, those involved would have to wait months or even years for everything to be negotiated.”
At the same time, Thomson states that his project is currently evaluating whether the remaining 61 eligible crypto investors should perhaps receive payments, although no requests have been received from them so far.
At press time, INSUR is down 7.6%, trading at $0.28.
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