Terra Aftermath: Stablegains Lawsuit, Hashed Loss Billions, Finder Investigation Wrong Conclusion...

The fallout from the Terra ecosystem collapse continues, with US-based revenue generation app Stablegains facing potential legal action over losses it suffered.

Users believe that Stablegain, which has allegedly lost $44 million worth of deposits, is asking for relief funds, based on a post on the Terra forum by co-founder Kamil Ryszkowski. He revealed that the day before TerraUSD was depegged from the U.S. dollar, its users’ funds totaled more than 47.6 million UST from 4,878 depositors.

According to data from CoinGecko, the price of UST as of this writing is $0.075.

Class action law firm Erickson Kramer Osbourne (EKO) wrote to Stablegains on May 14 requesting client account records, marketing materials and any interactions with UST.

"You have an 'uncompromising duty to preserve' any evidence that you know or have reason to know that will become relevant evidence in pending litigation," the letter reads, adding, "Failure to comply with  … …may result in civil or criminal penalties.”

EKO confirmed the authenticity of the letter to Cointelegraph and stated that it has opened an investigation into the collapse of the Terra ecosystem, which may lead to a class action lawsuit.

Stablegains users can earn up to 15% Annual Yield (APY) on deposited USD, which the company apparently trades for UST to earn on Anchor Protocol.

The Stablegains website documentation, updated 7 days ago, states that USDC and UST are the “primary stablecoins” it uses.

The website still states that “Anchor is our current preferred protocol and the foundation upon which Stablegains offers a stable 15%+ APY.”

According to the webpage’s cached results, Stablegains said it split funds “among multiple stablecoins to avoid risking the potential instability of one stablecoin at all,” but users accused the company of later amending how it mitigated the risk. wording.

Stablegains has started allowing withdrawals, but USDC will only be available at the market value of UST. Some clauses noted by users stipulate that the company shall not be liable for losses caused by exchange rates.

Hashed hit hard

Korean venture fund Hashed lost an estimated $2.9 billion on its Terra (LUNA) holdings, according to on-chain data.

Crypto wallets associated with Hashed show that the company still holds nearly 25 million LUNAs, which could have netted nearly $3 billion if sold at its peak price of $118 in early April.

Hashed reportedly stated that it is in “financial health” and has not been affected by Luna’s price crash.

Finder survey results are wrong by 92%

At the end of March, comparison site Finder conducted a survey of 36 “fintech experts” who gave some optimistic predictions for LUNA’s price.

The survey concluded that experts "believe that LUNA will be worth $143 by the end of 2022, rising to $390 by 2025."

Dr. Dimitrios Salampasis, a finance lecturer at Victoria's Swinburne University of Technology in Australia, was one of only three (8.3% of experts) to be skeptical of Terra, saying that algorithmic stablecoins are "intrinsically fragile and fundamentally unstable" and that Added that "LUNA will exist in a permanent vulnerable state".

LFG 'not planning' to use AVAX reserves

According to a tweet from the Avalanche blockchain team, LFG, which supports/does not support the Terra network, has "disclosed that it has no plans to use" its AVAX reserves.

LFG and Terraform Labs (TFL) purchased approximately $200 million worth of AVAX in April to back their UST stablecoin. The price of AVAX fell 30% in early May on fears that LFG would sell its AVAX to save UST from decoupling.

However, there is a one-year lock-up period for the more than 1 million AVAX purchased by TFL, Avalanche said.

LFG currently holds $61 million worth of AVAX, the second-largest holding in its $225 million reserves after UST. Avalanche said the proposed fork of the Terra chain is the reason the foundation does not intend to sell.

Delphi: "You were right, we were wrong"

Delphi Digital, a cryptocurrency-focused research and investment group, released a post-mortem on May 18 about the company’s losses from Terra’s debacle, saying it “always knew that something like this was a possibility.”

"We misjudged the risk of a 'death spiral' event. Over the past week, we have received some criticism for this, and we deserve it. The criticism is fair and we accept it."

The company did not disclose the amount of its losses, but said it purchased a "small amount" of LUNA worth about 0.5% of its net asset value in the first quarter of 2021, an amount that would increase as prices rose and the company made more investments. growing to around 13% of its NAV.

The firm added that less than 5 percent of its Delphi Ventures deals were "companies or agreements related to the Terra ecosystem," including a $10 million investment in LFG in February 2022. The company wrote:

"Based on LUNA's current price, the $10 million investment has been lost. Delphi Ventures did not sell any LUNA in this event."

It's not all bad news about Terra, either. According to Pantera Capital, an early investor in Terra, the company has cashed out about 80 percent of its investment in LUNA, which went from $1.7 million to about $170 million, according to partner Paul Veradittakit.

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