Among cryptocurrencies, stablecoins are supposed to be blue chip investments. They are designed to maintain a value of $1 per coin, to serve as a safe harbor from the volatile cryptocurrency seas. But that harbor is now underwater after the stablecoin TerraUSD sank from more than $1 in early April to being traded at less than two cents in early June.
Massachusetts surgeon Keith Baldwin was among the TerraUSD investors. The Wall Street Journal reported that Dr. Baldwin had $177,000, the bulk of his nest egg, in an account backed by TerraUSD that was supposed to pay 15 percent interest. During the second week of May, TerraUSD collapsed, as Terraform Labs, the company behind TerraUSD burned through $3 billion trying to support the stablecoin’s price. When Dr. Baldwin learned of TerraUSD’s plunge he tried to withdraw his funds. It took hours for his request to be completed, The Journal reported. By that time, TerraUSD was trading at 14 cents.
The 44-year-old Dr. Baldwin is haunted by his losses. He has put off his dream of buying a home and is cutting back on expenses so he can still save for his children’s education. “I don’t want to punish our kids for the mistake I made,” he told The Journal.
Terraform Labs, based in Singapore, appears to have limited sympathy for investors like Dr. Baldwin. “As with virtually everything else in life, each individual must decide for themselves what risks they are willing to undertake,” a spokesperson told The Wall Street Journal.