Nexus Mutual, one of the major crypto insurance platforms for high-risk decentralized finance (DeFi), told CoinDesk their governing body may seek legal action if policyholders, who had submitted claims due to the recent Euler Finance hack, do not return their reimbursements. Last month, Euler suffered a loss of $200 million in crypto assets, but the money was quickly returned. However, as Nexus Mutual had covered losses for those who had claims, even if they did not suffer any actual losses, they are now expecting reimbursement to the tune of $2 million in combined claims.
This situation demonstrates the current reliance DeFi still has on trust, in spite of the crypto market's insistence on savvy coding to replace the long-time fundamental aspects of the traditional financial system. At press time, Euler had returned $133 million to 457 users using a redemptions portal. Of those 457, 6 were Nexus Mutual policyholders. 4 of the 6 had effectively returned their redemptions, amounting to $380,000 in various cryptocurrencies. The remaining 2 have proceeded to trade or transfer their refunds, resulting in a sum of $400,000 that does not belong to them.
The head of communications at Nexus Mutual, BraveNewDeFi, revealed that these 2 have agreed to return their claims to the Nexus Mutual DAO, should they receive money back from Euler. As the money has now been returned, Nexus Mutual will be taking the appropriate steps in order to collect. Should other consumers fail to voluntarily return their reimbursements, Nexus Mutual will consider utilizing their legal contacts in order to seek claims.
Despite the potential loss of funds on a large sum of policyholders, Nexus Mutual has remained financially sound. According to data compiled by Richard Chen of 1Confirmation, Nexus Mutual is recorded as having the strongest insurance policy coverage in the DeFi market. Nexus Mutual has also contacted Euler to add a notice to the portal, alerting policyholders to the money they owe. Lastly, the founder of Nexus Mutual has also mentioned possible legal action from the DAO members should the claims remain unpaid.
Connor Jimenez
- 2023-04-12
Crypto Insurance Platform Seeks Legal Action Against Unpaid Claims
Nexus Mutual is expecting reimbursement of $2 million in combined claims from the recent Euler Finance hack. But, some of their policyholders have not returned the money. The crypto insurance platform is now considering taking legal action to reclaim it.
