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Yield app Stablegains faces allegations of misusing clients’ money — and possibly a lawsuit — after losing more than $42 million, which it had invested in UST via Anchor protocol without informing clients.
According to allegations posted on social media, the company promised clients a 15% gain on their USDC and fiat USD deposits. However, it took the money and put it into UST in Anchor for a 20% yield and skimmed the profits above 15%. Clients were unaware of this until the firm incurred millions in losses when UST depegged from the dollar and crashed to less than 1 cent.
Yikes. @stablegains took USDC and USD via wire from customers promising them 15%, put it all into Anchor without telling them, and skimmed 4% off the top. They have now changed the denominations in their app from USD to UST and are nuking the landing page & old terms. (1/2) pic.twitter.com/D6sVOI2bRG
— FatMan (@FatManTerra) May 19, 2022
The news first surfaced online when one investor shared a letter sent to Stablegains by law firm Erickson Kramer Osborne. The letter stipulated that the company should preserve and maintain all communications and records in case of potential litigation.
Stablegains denies culpability
Stablegains has publicly denied the allegations and said it has always been transparent about its yield coming from UST and Anchor.
We know the current situation is painful for everyone. The UST depeg has led to losses for our users and many others in the industry. Also for us. We’d like to provide a clear comment about our use of Anchor/UST and the risks. Please read on:
— Stablegains (YC W22) (@stablegains) May 19, 2022
Stablegains also said:
“We have made it clear across relevant learning center articles, and our Terms of Use that all funds deposited are placed in Anchor Protocol using UST and that this is the only DeFi protocol we integrate with,” part of the tweet read.
However, further allegations…
Click Here to Read the Full Original Article at Stablecoins – CryptoSlate…
