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Ardana Labs’ Collapse: More Than Just Funding Issues?
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In 2021, Ardana Labs set out to create a stablecoin platform for the Cardano network called “Ardana.” The project aimed to allow investors to lock up crypto collateral and mint fiat-pegged stablecoins, including a U.S. dollar-based token called dUSD. Despite raising $10 million from investors, Ardana abruptly closed down in November 2022, citing funding and project timeline uncertainties.
While some attributed Ardana’s failure to the challenging crypto market conditions of 2022, new evidence from Web3 risk-management platform Xerberus suggests that there may be more to the story. Xerberus claims that Ardana executives transferred 80% of the project’s funds to a personal wallet and made risky investments, resulting in a loss of around $4 million.
Ardana’s Rise and Fall
Ardana gained attention in 2021 when it secured $10 million in funding from venture capital firms CFund, Three Arrows Capital (3AC), and Ascensive Assets. Investors were optimistic about the prospects of Ardana’s upcoming token, DANA.
However, despite partnerships and announcements, Ardana never launched its stablecoin platform or asset bridge between Cardano and Near Protocol. The project shut down in November 2022 due to funding uncertainties amidst the collapse of FTX and the bankruptcy of one of its backers, 3AC.
Questionable Money Trail
According to blockchain data analyzed by Xerberus, approximately $3.2 million worth of stablecoins raised by Ardana was moved through a series of intermediate steps before reaching a “Target Wallet.” These funds were then used for risky investments in various cryptocurrencies.
Furthermore, Xerberus identified approximately $4 million that was sent from Ardana through centralized exchanges like Kraken, Coinbase, and Gate.io before being transferred to the Target Wallet. While tracing these funds became more challenging once they entered centralized exchanges, Xerberus found evidence suggesting that the same user made outgoing transactions from these exchanges.
Remaining Funds and Development Costs
Xerberus estimates that around $1.82 million of Ardana’s funds were spent on development costs and team salaries associated with the project. They also claim that approximately $1.4 million worth of USDC remains in the possession of the project.
Hot Take: Ardana’s downfall appears to be more than just a result of funding and project timeline uncertainties. Evidence suggests mismanagement of funds by Ardana executives, leading to risky investments and substantial losses. This case serves as a cautionary tale for investors to thoroughly research projects and scrutinize their management practices before committing funds.
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