Defi Stablegains Project Sued For Deceiving Investors By Promoting UST As Safe
Key Points:
- Stablegains sued for customer losses following exposure to Anchor Protocol and the collapse of UST last year.
- They falsely advertised UST as a safe investment.
- The platform transferred all client funds to the Anchor Protocol without their knowledge or consent.
Stablegains, a DeFi project invested by YC, was sued in a California court for allegedly misleading investors and failing to comply with securities laws.
Plaintiffs Alec Ohanian and Artin Ohanian filed the lawsuit in the United States District Court for the Central District of California on February 18.
They allege that Stablegains transferred all customer funds to Anchor Protocol without the customer’s knowledge or consent.
“As an early supporter of and investor in TFL [Terraform Labs], Stablegains is intimately familiar with UST and LUNA. Stablegains, Inc. falsely advertised UST as a safe investment.”
The complaint reads.
The Anchor protocol offers up to 20% yield on the Terraform Labs algorithmic stablecoin, Terra USD (UST). However, the protocol only provides a 15% gain to its customers, pocketing the spread over the yield offered by the Anchor Protocol.
The complaint adds that the company was not registered with the SEC as a stock exchange or a broker-dealer. And after Terra fell, Stablegains changed its website and promotional material, removing content promoting UST as “safe” and “fiat currency supported.”
Instead of liquidating assets and returning funds to customers, this protocol “retains the majority of depreciated user-deposited assets, unilaterally choosing to redirect them to Terra 2.0”. On May 22, Stablegains discontinued service, applications, and support for the Anchor Protocol, requiring users to withdraw their funds.
Reportedly, Y Combinator participated in a $600,000 funding completed by Stablegains in December 2021 and a $3 million financing completed in April 2022. According to the news in May 2022, they were also sued after this protocol embezzled customer funds and invested in Anchor, causing a considerable loss. They exchanged user USD for UST.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
Join us to keep track of news: https://linktr.ee/coincu
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Defi Stablegains Project Sued For Deceiving Investors By Promoting UST As Safe
Key Points:
- Stablegains sued for customer losses following exposure to Anchor Protocol and the collapse of UST last year.
- They falsely advertised UST as a safe investment.
- The platform transferred all client funds to the Anchor Protocol without their knowledge or consent.
Stablegains, a DeFi project invested by YC, was sued in a California court for allegedly misleading investors and failing to comply with securities laws.
Plaintiffs Alec Ohanian and Artin Ohanian filed the lawsuit in the United States District Court for the Central District of California on February 18.
They allege that Stablegains transferred all customer funds to Anchor Protocol without the customer’s knowledge or consent.
“As an early supporter of and investor in TFL [Terraform Labs], Stablegains is intimately familiar with UST and LUNA. Stablegains, Inc. falsely advertised UST as a safe investment.”
The complaint reads.
The Anchor protocol offers up to 20% yield on the Terraform Labs algorithmic stablecoin, Terra USD (UST). However, the protocol only provides a 15% gain to its customers, pocketing the spread over the yield offered by the Anchor Protocol.
The complaint adds that the company was not registered with the SEC as a stock exchange or a broker-dealer. And after Terra fell, Stablegains changed its website and promotional material, removing content promoting UST as “safe” and “fiat currency supported.”
Instead of liquidating assets and returning funds to customers, this protocol “retains the majority of depreciated user-deposited assets, unilaterally choosing to redirect them to Terra 2.0”. On May 22, Stablegains discontinued service, applications, and support for the Anchor Protocol, requiring users to withdraw their funds.
Reportedly, Y Combinator participated in a $600,000 funding completed by Stablegains in December 2021 and a $3 million financing completed in April 2022. According to the news in May 2022, they were also sued after this protocol embezzled customer funds and invested in Anchor, causing a considerable loss. They exchanged user USD for UST.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Foxy
Coincu News
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