We hereby inform our clients that due to the instability, network outages and extreme volatility, and loss of value that has occurred over the past week, Inlock has immediately begun the removal of the Terra blockchain and its two supported assets, UST and LUNA coins, with the following schedule:
• On the 14th of May 2022, the possibility to deposit these assets was disabled on the platform, and the LUNA and UST wallets were removed for all clients who did not own these assets. By this time, the Swap function was also no longer available, as our partners also suspended UST and LUNA trading.
• On the 16th of May 2022, the server of the Terra network was disconnected, after which we are not physically able to receive deposits on this network.
• On the 18th of May 2022, the previous week’s interest will be paid, but the interest of UST and LUNA assets will be paid to all clients as a one-time compensation in ILK tokens, thus avoiding the situation where a large number of clients hold small amounts of unspendable UST and/or LUNA balances.
• From the period starting on the 18th of May 2022, Inlock will not pay interest on UST and LUNA assets.
• Until the 18th of May 2022, we will offer our clients the opportunity to withdraw their existing UST and LUNA coins directly from the platform. After this date, withdrawals can only be initiated individually through the support.
• On the 18th of May 2022, the UST balance of all wallets that do not exceed 10 UST will be automatically converted to ILK tokens at the exchange rate of that day. If our clients do not wish to take advantage of this residual conversion, please indicate your preference by sending an email to [email protected]
We would also like to highlight the events of the past week. We have taken every effort to ensure that our clients are properly informed about the situation so that they can minimize their losses.
• At 7 PM on the 9th of May, we wrote on Telegram about the serious concerns regarding the stability of the Terra network and the UST, as the market capitalization of LUNA has exceeded the UST capitalization, and we indicated that everyone should consider a UST → USDT exchange. By this time, the UST exchange rate against the dollar (peg) was around 0.96 cents.
• At 20:07 on Monday, the 9th of May (Monday), we communicated on our social media channels that the peg had moved more than 2%, therefore we recommended our clients holding UST coins to consider swapping UST assets for other assets for risk management.
• This news was also sent out in our newsletter during the early afternoon of the 10th of May (Tuesday). At that time, the peg was around 90 cents.
• At noon on the 11th of May (Wednesday), we published an announcement for our clients holding UST due to our Easter promotion, that they can swap their assets and still receive the bonus, that will be paid out in USDC. By this time, the peg was fluctuating between 0.4 and 0.8. Thanks to the bonus, at this point many people were able to opt-out without any major loss.
• On the 12th of May (Thursday), the Terra network was officially shut down due to LUNA hyperinflation, and most major exchanges stopped supporting LUNA/UST. At this time, we were also forced to officially terminate withdrawals/deposits, as well as disable the Swap function. However, these have been working smoothly up to this point! In fact, there were huge delays with Swap, many attempts and typically only a small amount worked. Despite this, we had several clients who have exchanged over $100,000 in 2 days.
• On the 13th of May (Friday), we decided to offer a UST/LUNA → ILK exchange at the residual exchange rate for those who did not withdraw or swap until the last minute and had at least 1000 UST. It is important to note that due to the lack of a network, we are unable to cover these exchanges, so the platform accounted this as a loss.
• During the late afternoon of the 13th of May, the Terra network was restored and we have reactivated the possibility to withdraw the remaining UST and LUNA assets. Most of our clients took advantage of this. In total, we have 8 clients left with more than 1000 USTs and another 12 with balances between 100 and 1,000 UST on the platform. The UST assets held on the Inlock platform are now below 40,000 UST.
Inlock will continue to do its best to ensure that in addition to providing a high level of service, the associated risks are identified, managed and communicated to clients. Cryptocurrencies are highly volatile and significant price fluctuations may occur within hours. The Inlock platform has no control over the exchange rates and therefore cannot guarantee any losses or gains resulting from exchange rate fluctuations!