• 14 July, 2024

Wintermute Accuses Near Foundation and Aurora Labs Over Stablecoin Redeem Deal

Wintermute founder and CEO, Evgeny Gaevoy, has publicly accused the Near Foundation and Aurora Labs of reneging on a deal worth $11.2 million involving the conversion of USN, a Near protocol-native stablecoin, to USDT. The dispute arose after Wintermute acquired USN tokens from the Alameda Research estate and made a deal to participate in the redemption under the preexisting USN Protection Program (USNPP) initiated by the Near Foundation following the decision by developer Decentral Bank to sunset the stablecoin in October 2022.

Wintermute’s claim is based on the allegation that they were tasked with selling approximately 11.2 million USN to FTX creditors with the assurance of later redeeming USN for USDT on a 1-1 basis. Gaevoy asserted that this confidence was built upon public statements by the Near Foundation, which introduced them to Aurora Labs. However, Aurora Labs, responsible for setting up the program after receiving a grant from the Near Foundation, has refuted these claims, stating that Wintermute’s redemption request was inconsistent with the intended purpose of the USNPP.

According to Gaevoy, the Near Foundation failed to honor commitments made, offering only 20% of the initially promised amount, leaving Wintermute with significant losses. Despite Wintermute’s attempts to propose alternative solutions, such as using the funds to buy and lock Near tokens (NEAR), cooperation from the Near Foundation team was lacking.

In response, Aurora Labs dismissed Wintermute’s claims as unfounded, asserting that Wintermute attempted to use the USNPP in a manner contrary to its purpose and terms of use. The decision to decline Wintermute’s request was made in consultation with the Near Foundation.

Wintermute has announced its intention to pursue legal action against both teams, emphasizing its commitment to switching into a full-time adversarial mode to resolve the dispute. Notably, Wintermute clarified that it holds no trading position on NEAR, despite a 3% dip in the NEAR token’s value over the past 24 hours.

As this dispute unfolds, the cryptocurrency community watches closely, eager to see how the involved parties will address the accusations and navigate the legal proceedings. The incident serves as a stark reminder of the challenges and complexities faced within the digital asset industry, highlighting the importance of transparent and trustworthy collaborations to maintain the sector’s integrity.

Recently, Wintermute suffered a loss of $160 million due to a hack that occurred during its DeFi operation, which was brought to by a tweet from Gaevoy. However, Gaevoy clarified that the hack did not affect Wintermute’s centralized finance and over-the-counter activities. Despite the significant loss, the company was able to avoid bankruptcy.

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