Disappointment from the collapse of the Terra ecosystem continues to evolve as the US investment firm Stablegains faces a possible lawsuit over its loss of the event.
Users estimate that Stablegain has lost up to $ 44 million in paid-up funds based on a Terra forum entry by co-founder Kamil Ryszkowski asking for help. He reported that the day before TerraUSD (UST) lost its connection to the US dollar, its users’ assets amounted to over 47.6 million USTs from 4,878 depositors.
The current trading price of UST is $ 0.075, according to CoinGecko.
A letter from the class action lawsuit of law firm Erickson Kramer Osbourne (EKO) sent to Stablegains dated May 14 requires a record of clients’ accounts, marketing materials and all communications regarding ICT.
These guys are in big trouble – they lost about $ 42 million in money from 4,878 customers and probably have no way to pay it back (they are a small start-up company) because they went completely into Anchor’s defeat. Conviction bets are great, but not when it comes to playing with people’s savings. (2/2) image.twitter.com/p9S5uFILoF
– FatMan (@FatManTerra) May 19, 2022
“You owe it an ‘inflexible duty to preserve’ any evidence that you know or ought to know is relevant evidence in an impending lawsuit,” he said in the letter, adding “failure to comply … could lead to civil or criminal penalties “.
EKO confirmed the authenticity of the letters to Cointelegraph and said it had launched an investigation into the collapse of the Terra ecosystem for a possible class action lawsuit.
Stablegains users were able to earn up to a 15% annual percentage return (APY) on the US dollars deposited, which the company appears to have converted to UST to earn a return on the Anchor Protocol.
Documents from the Stablegains website updated seven days ago claim that USDC and UST are the “main stablecoins” used.
It further states that “Anchor is our current protocol and the basis for a stable 15% + APY ratio of Stablegains.
According to the website’s cached results, Stablegains said it allocates funds “in the number of stablecoins so as not to be fully exposed to potential instability like stablecoins” though users mean the company has since changed its wording on how to reduce risk.
Stablegains has begun to allow withdrawals, but the USDC will only be granted at the market value of ICT. Part of the terms and conditions that a user stipulates that the company is not liable for losses due to the exchange rate.
Hashed takes a big hit
South Korean venture capital fund Hashed has taken a $ 2.9 billion loss on its Terra (LUNA) property, according to the chain.
The Hashed crypto wallet shows that the company still has almost 25 million LUNA, which could have returned the company almost 3 billion dollars if it had been sold at a historic high of 118 dollars in the beginning of April.
According to Hashed, it has been said that it is “financially sound” and has not been affected by the collapse in prices in Luna.
Finding survey 92% wrong
At the end of March, the Finder comparison website conducted a survey of 36 “fintech experts” who provided good forecasts for the price of LUNA.
The results of the survey were that experts “estimated that LUNA would be worth 143 dollars at the end of 2022 before rising to 390 dollars in 2025.
Dr. Dimitrios Salampasis, a finance professor at Swinburne University of Technology in Victoria, Australia, was one of only three (8.3% of experts) to question Terra, citing that algorithmic stablecoins are “inherently sensitive and not stable at all,” he added. “LUNA will exist in a state of perpetual vulnerability.” Well played Dr. Salampasis.
“No plans” for the AVAX LFG reserve fund
The Luna Foundation Guard (LFG), which does not support / soften the Terra network, has “stated no plans to use” the Avalanche (AVAX) reserve fund it owns under quack from the Avalanche blockchain team.
LFG and Terraform Labs (TFL) bought AVAX for about $ 200 million in April to support their UST stablecoin. AVAX prices fell by 30% earlier in May due to fears that LFG would sell its AVAX to save the UST connection.
However, Avalanche says that TFL shares over 1 million AVAX have a lock-in period of one year.
1 / Some members of the Avalanche Community have asked about the details around $ AVAX reserves maintained by Luna Foundation Guard and Terraform Labs.
Note: AVAX is currently unmoved. Below is a transparency report
– Avalanche (@avalancheavax) May 19, 2022
The LFG Treasury now owns AVAX worth $ 61 million and is the second largest asset after UST in its $ 225 million reserve. Avalanche says that the proposed Terra chain power is the reason why the agency does not intend to sell.
Delphi: “You were right and we were wrong”
The cryptographic research and investment group Delphi Digital published a postmortem on May 18 regarding its loss due to the collapse, saying that it “always knew that something like this was possible”.
“We miscalculated the risk of a ‘death spiral’ event coming true. We’ve got some heat for this last week and we deserve it. The criticism is fair and we accept it. “
The company did not disclose the dollar amount of its loss but said it had bought a “small amount” of LUNA worth 0.5% of its net asset value (NAV) in the first quarter of 2021 which increased to about 13% of NAV which the price increased and the company invested in increasingly.
It added less than 5% of its Delphi Ventures contracts to “companies or protocols related to the Terra ecosystem”, including a $ 10 million investment in February 2022 in LFG with the company written:
“10M investment which, based on the current LUNA price, is completely lost. Delphi Ventures did not sell LUNA at this event. “
News about Terra is not all bad, Pantera Capital, an early investor in Terra, revealed that it had paid out about 80% of its LUNA investment by converting the company $ 1.7 million into about $ 170 million. according to Paul Veradittakit.
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