Terra aftermath: stablegains lawsuit, hashed lost billions

The collapse of Terra ecosystem continues to present aftershocks, and the revenue generation application stablegains in the United States faces potential legal proceedings due to the loss of the event.

Users believe that based on a post by co-founder Kamil ryszkowski on terra forum, stablegain has allegedly lost $44 million worth of deposits and is asking for relief funds. He revealed that the day before terrausd was decoupled from the US dollar, the total funds of its users exceeded 47.6 million UST, from 4878 depositors.

According to coingecko, the price of ust as of the time of writing is $0.075.

Erickson Kramer Osbourne (Eko), a class action law firm, wrote to stablegains on May 14, asking for customer account records, marketing materials and any interaction related to UST.

"You have an 'absolute obligation to preserve' any evidence you know or have reason to know, which will become relevant evidence in pending litigation," the letter said The letter also said, "failure to comply with... May result in civil or criminal penalties."

Eko confirmed the authenticity of the letter to cointegraph and said that it had launched an investigation into the collapse of Terra ecosystem, which may lead to class action.

Stablegains users can get up to 15% annual yield (apy) from the deposited dollars. Obviously, the company changed these dollars into ust to obtain the income on anchor protocol.

The stable gains website document updated seven days ago said that usdc and ust were the "main stable currencies" used.

The website still said, "anchor is our current preferred agreement and the basis for stable gains to provide more than 15% apy."

According to the cache results of the web page, stablegains said that it "allocated funds among multiple stable currencies to avoid being completely at risk of potential instability of one stable currency", but users accused the company of later modifying the wording on how to reduce the risk.

Stablegains has begun to allow withdrawals, but usdc will only provide them at the market value of UST. Some clauses noted by users stipulate that the company shall not be liable for losses caused by exchange rate.

Hashed was hit hard

According to the data on the chain, hashed, a Korean venture fund, lost an estimated $2.9 billion on its Terra (LUNA) assets.

According to the encrypted wallet related to hashed, the company still holds nearly 25 million Lunas. If sold at the highest price of $118 in early April, the company may make a net profit of nearly $3 billion.

According to reports, hashed said it was "in good financial condition" and was not affected by the sharp drop in Luna prices.

The error deviation of finder survey results is 92%

At the end of March, the comparison website finder conducted a survey of 36 "financial technology experts", who gave some optimistic predictions about the price of Luna.

The survey concluded that experts "believe that Luna will be worth $143 by the end of 2022 and will rise to $390 by 2025."

Dr Dimitrios salampasis, a lecturer in finance at the University of science and technology in Victoria Swinburne, Australia, was one of only three people (accounting for 8.3% of experts) who doubted Terra. He said that the algorithmic stability currency was "inherently fragile and fundamentally unstable" and added that "Luna will exist in a permanent fragile state".

LFG "does not intend" to use avax reserves

According to the twitter message of avalanche blockchain team, LFG that supports / does not support Terra network has "disclosed that it has no plan to use" its avax reserves.

LFG and terrain labs (TFL) purchased about $200 million worth of avax in April to support their ust stabilization currency. The price of avax fell 30% in early May due to concerns that LFG would sell its avax to save the decoupling of UST.

However, avalanche said that TFL purchased more than 1 million avaxs with a one-year lock-in period.

LFG currently holds $61 million worth of avax, the second largest holding after ust in its $225 million reserves. Avalanche said the proposed Terra chain bifurcation was the reason why the foundation did not intend to sell.

Delphi: "you're right, we're wrong"

Delphi digital, a research and investment group focusing on cryptocurrency, released an ex post analysis report on the losses suffered by the company due to the terra collapse on May 18, saying that it "always knew that this kind of thing could happen".

"We misjudged the risk of the death spiral. Over the past week, we have received some criticism, which we deserve. 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 valued at about 0.5% of its net asset value in the first quarter of 2021, which increased to about 13% of its NAV as prices rose and the company made more investments.

The company added that less than 5% of its Delphi ventures transactions 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, this $10 million investment has been completely lost. Delphi ventures did not sell any Luna in this event."

The news about Terra is not all bad news. According to Pantera capital, Terra's early investor, the company has cashed in about 80% of Luna's investment, which has changed from $1.7 million to about $170 million, according to partner Paul veradittakit.