Losing $42 Million in $UST, Stablegains Is Being Sued

Popular DeFi app Stablegains Is Being Sued After Losing $42 Million in $UST

Stablegains is being sued for allegedly collecting money from customers and depositing it in Anchor Protocol without informing them. Upon waking, investors saw that their USDC was now worth UST rates. Some have accused the firm of taking a cut of the money from investors, allegedly approximately $42 million.

A letter from Erickson Kramer Osborne, a famous legal firm, to Stablegains has surfaced online, indicating that the company is being sued for failing to keep and preserve all of its “entities” of communication and records.

When the Terra network fell down, withdrawals from Stablegains came to a halt. Stablegains began its withdrawals when the network was restored. In a tweet, the company confirmed the news, but added something that many people didn’t anticipate. Customers discovered that their USDC and USDT holdings may now be exchanged for UST without their knowledge.

The firm also stated that the duration of withdrawals will be determined by the Terra network.

Investors are furious as a result of what transpired with the UST. Many people have expressed their anger on Twitter.

It was also uncovered that under the company’s “Terms of Service,” the final sentence states,

“Under no circumstances that Shall Stablegains be liable to losses due to the exchange rate of UST to USDC at the time of processing your USDC withdrawal request.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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