LUCKNOW (CoinChapter.com) — Wintermute, a leading market-making firm, is considering taking legal action against the Near Foundation and Aurora Labs over a contentious $11.2 million deal that has gone sour.
We are Not Friends — Wintermute CEO On Near Foundation
On Tuesday, Wintermute’s CEO, Evgeny Gaevoy, tweeted that the firm was “not friends” with the two as they backed out of their commitment.
On Nov. 7, Evgeny Gaevoy revealed that his company had agreed to sell 11.2 million USN, Near’s now-sunset native stablecoin. The understanding was that these tokens would be redeemable for USDT in Spring 2023. In exchange for these USN tokens, Wintermute invested roughly $11 million.
Gaevoy claims that the Near Foundation assured that Aurora Labs would facilitate the USN redemption within “a couple of days.”
However, Wintermute has not received any USDT, even after submitting the USN for redemption in August. Gaevoy claimed they were recently offered redemptions at just 20% of the dollar.
“We relied on public and private messaging by Aurora and NF to get into our USN position, and only upon attempting to convert — after a successful test redemption and two months of waiting — NF unilaterally decided to refuse without providing any logical explanation.
The best explanation for this would be incompetence. I’d leave the reader to come up with the worst,” tweeted Gaevoy.
Wintermute’s CEO said that their tweets represent their final attempt at resolving the situation by fully redeeming their USN tokens. Gaevoy also encouraged other USN holders facing similar issues to come forward.
USN’s Troubled History
Initially started as an algorithmically-pegged token in April 2022, USN switched to a USDT-collateralized model UST.
The transformation took place just two months after Terra’s algorithmic stablecoin collapsed. However, USN was sunset in October due to technical problems that rendered it undercollateralized by $40 million as users minted excessive tokens.
The Near Foundation had previously assured users that its USN Protection Program had “fully covered” the missing collateral. At that time, the stablecoin had a market cap of nearly $250 million.
“Near had to step in and cover the hole, setting aside funds to address this via the USN Protection Programme, while Aurora Labs got the grant from NF to operate the program. It appears to us Aurora and NF have run the program without accountability or transparency,” said Gaevoy.
As of now, neither Near nor Aurora have issued public statements regarding Wintermute’s accusations.