Wintermute CEO Plans to Sue Near Foundation
Evgeny Gaevoy, founder and CEO of the market-making firm Wintermute, has announced intentions to file a lawsuit against the Near Foundation over an unfulfilled stablecoin agreement. The legal action also extends to Aurora Labs, the company behind Aurora, an Ethereum Virtual Machine blockchain operating on the Near protocol.
The Background
Following the collapse of cryptocurrency exchange FTX in November 2022, Wintermute has been involved in the process of liquidating assets. The company was tasked with facilitating the sale of 11.2 million USN, a Near-native stablecoin. Originally designed as an algorithmic stablecoin, USN was transitioned to a non-algorithmic model due to Terra’s UST collapse. This led to a $40 million collateral gap, prompting the creation of a USN Protection Programme by the Near Foundation in October 2022.
Wintermute executed a transaction linked to FTX but was later denied redemptions by the Near Foundation. Despite public and private commitments made by both parties regarding redemption, Wintermute did not receive any USDT for the USN sent. The Near Foundation only offered to redeem 20% of the amount.
“Full-time Adversarial Mode”
Wintermute proposed accepting a larger portion of the amount as an investment in locked NEAR tokens, but this offer was declined by the Near Foundation. Gaevoy expressed frustration over what he perceives as a lack of accountability or transparency in how the program has been managed by Aurora and NF.
“NF can call it however they want – the bottom line is their refusal to convert our USN to USDT in line with their public and private commitments has caused us direct harm…It appears to us the programme has been run by Aurora and NF without accountability or transparency,”
Gaevoy has given Near Foundation and Aurora Labs time to redeem the assets before Wintermute switches into “a full-time adversarial mode.” He encouraged other parties facing similar situations to reach out to his team for support.
Hot Take: Wintermute vs. Near Foundation
The conflict between Wintermute and the Near Foundation highlights challenges in stablecoin management within crypto markets. The failure to honor agreements can lead to significant financial repercussions for businesses involved, underscoring the importance of transparent and accountable practices across all crypto transactions.
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