Ukrainian Man Lost $10,000 After Crypto Stablecoin Demise

Sophie Webster, Tech Times 22 May 2022, 08:05 pm

A Ukrainian man who converted almost all of his money into the crypto stablecoin terra back in April in order to protect it against the risk of invasion or currency collapse has lost $10,000 after its sudden demise.

Ukrainian Man Lost Crypto Money

Yuri Popovich, who currently lives in Kyiv, said that it was impossible and unsafe to store funds in the form of banknotes. Cryptocurrencies advertised as safe and backed with fiat currency had another option.

Unlike most cryptocurrency purchases, buying a stablecoin is not intended to be a risky investment. The tokens with names like "tether," "terra," and "USD coin," are supposed to maintain a fixed value of one token to one US dollar.

Popovich clarified that he is not a speculator, he just wanted to save some money.

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However, when terra collapsed in early May, as well as starting a broader meltdown in the cryptocurrency sector, it affected the savings of retail investors.

Popovich said that he stopped sleeping normally and lost 4kg. He is now suffering from headaches and anxiety. He also said that his wife still does not know about the loss and he does not know how to tell her.

Popovich's savings are now worth less than $500, according to The Guardian. He said that this is a colossal amount for them, and in the current situation, the money is important for them to survive. He fears for his wife's health, his health, and their marriage.

Popovich is one of the many retail investors who lost money in the sudden collapse of terra, which at one point had almost $50 billion invested in it and is now worth only $1 billion.

As well as those looking for a safe place to keep their savings, others were lured in by the promise of interest rates topping 20% a year, in a currency that was pegged to the dollar.

But the interest rates, and the stability of the currency itself, relied on the continued interest of investors. That property led many to accuse terra, and other tokens, of effectively being a Ponzi scheme.

Crypto Ponzi Scheme

On May 14, international tax officials have identified more than 50 leads to a potential crypto tax crime that may lead to official investigations in the next few weeks, including one case that could be a $1 billion Ponzi scheme, according to Market Watch.

The American tax officials said that they were following different leads into scams focus on things like nonfungible tokens and other decentralized parts of the sector.

Crypto's ability to move across borders undetected has made it a tool for scammers looking to target vulnerable investor populations. It also has led to a massive number of criminal actions, which regulators are attempting to attack and control as crypto grifters go for richer targets, according to TheStreet.com.

There was also an upswing during Russia's invasion of Ukraine. A lot of people were sending money in and out of the country through crypto, once again proving how the currencies might eventually be used.

The money involved appears to have affected investors across the world, including crypto buyers in the United Kingdom, the United States, Canada, Australia, and the Netherlands.