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YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

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Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#131

Post by thot_experiment »

predg wrote: post #61

Seems that YC have been investing in quite a few predatory companies in recent years. Lambda School and Inflow are two that come to mind.

Yeah the days of being accepted into YC meaning anything are long gone, they're investing in pretty much anything these days. On the whole I think YC is a lite version of a rugpull though I don't really mean that as some sort of scathing criticism, it's par for the course.

That's just the way most businesses operate, you build up trust and provide loads of value when you're small. Then, as you expand you take advantage of the trust-inertia to exploit the gap between how much value you are perceived to provide and how much value you actually have to provide to keep getting money (or equity) from people and giving it to yourself.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#132

Post by onethought »

sylvinus wrote: post #120
onethought wrote: post #100

Earlier quoted context omitted.

It's a great analogy because: Banning watering gardens is exactly as dumb as banning proof of work. The vast majority of water wastage occurs irrigating farms supporting crops that are unsuitable for that area. A solar panel connected to a coin miner is only doing good in the world. Where is the negative? You sure it's the mining that is the bad thing and not the dirty energy?

> Where is the negative? For one, you are wasting a solar panel that could be offsetting more positive energy usage. And building both the solar panel and the miner is far from emission-free.

Wasting a solar panel? Do you think a beach is a waste of silicon?

Building a solar panel and a gpu (say) is not emission free? Because they require energy to refine and manufacture. So we are still back to the fact the issue is with the energy generation. Right?

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#133

Post by throwaway2048 »

Khelavaster wrote: post #92
dmitrygr wrote: post #10

Earlier quoted context omitted.

Promising a guaranteed 15% return is fraud. There is no place in reality where you can * guarantee * that kind of return.

Credit cards issue debt on promised 15%-24.99% returns all the time..

The fact those returns aren't guaranteed is a big part of why they are so high to begin with. Credit card debt is unsecured (no collateral put up to be seized in the event of a default), creditors can walk away from the debt and the issuer will never receive a cent.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#135

Post by vkou »

puranjay wrote: post #112
hardwaresofton wrote: post #75

Earlier quoted context omitted.

I think this is something like AI -- where people who are calling it "AI" are often sales people/hucksters (I mean this as little a pejorative sense as possible), and the people calling it "ML" are the practitioners/people you should be listening to. Once a phrase gains mainstream adoption and starts to rapidly lose meaning, I find that people who care dearly about that thing start calling it something else. That sai…

As someone who went heavy into crypto/web3, it does pain me to admit that there really are no use cases besides making money. Which isn’t a bad use case by itself, but after using practically hundreds of protocols and projects, there’s not a single one I’d use if there was no prospect of making money off of it. My dApp usage has cooled off almost completely. And all data shows that this is true for most others as wel…

> As someone who went heavy into crypto/web3, it does pain me to admit that there really are no use cases besides making money.

In 2022, is there any money to be made there, other than:

1. Money that comes from 'less lucky' entrants in the various zero sum schemes?

2. Money that comes from selling shovels to the con artists running #1?

As a bystander, I'm not seeing any other ways that 'web3' is making money - and I'd argue that if it's just those two, then that's a pretty bad use case. I mean, it's good for the participants who are making money, but all that money comes from impoverishing others.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#136

Post by whatever1 »

onethought wrote: post #100
drewm1980 wrote: post #73

Earlier quoted context omitted.

The money changed hands... from people gambling on financial instruments to other people who are probably also gambling on financial instruments. Significant real value was only destroyed forever if the underlying tech for this is based on proof of work. Mining bitcoin destroys an enormous amount of ~real value, and nobody who cares about the advancement of society should touch it. Proof of work crypto mining is some…

It's a great analogy because: Banning watering gardens is exactly as dumb as banning proof of work. The vast majority of water wastage occurs irrigating farms supporting crops that are unsuitable for that area. A solar panel connected to a coin miner is only doing good in the world. Where is the negative? You sure it's the mining that is the bad thing and not the dirty energy?

The problem is that you need an entire supply chain and manufacturing to provide you with your solar panel and gpu.

We are mobilizing all these resources and manufacturing capacity to do what? Run infinite loops on a useless program?

Meanwhile at my lab that works on bio simulations they could not find gpus to do their research.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#137

Post by josu »

yunohn wrote: post #110
josu wrote: post #94

Earlier quoted context omitted.

I publicly called out LUNA/UST on Twitter a few times a few months before the collapse [0] [1]. Just stating this so it's clear that I don't have any interest defending them. That being said, calling these platforms "ponzis" isn't correct, the most you can say is that they were front ends for a ponzi. It would be like setting up a front-end to receive investments, and then depositing the money with Madoff. I'm not sa…

> It would be like setting up a front-end to receive investments, and then depositing the money with Madoff. I'm not saying it's a legitimate business, just not a ponzi. So, it’s neither legitimate nor a Ponzi. Cool, what is it then?

IANAL, but anything between fraud and gross negligence I guess.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#139

Post by underwater »

Their tagline is "Earn higher interest on your cash". And the website says "You can now earn up to 15% APY interest on your cash with Stablegains. This is 30x higher than in your traditional bank*."

I don't see how they can justify making such a claim. Once you put the money into their system the cash is converted to UST. No one is earning interest on their cash.

Comparing themselves to a bank, and using terminology like "deposit" and "withdrawl" are sketchy as hell. All those imply that the capital is not at risk, which it obviously was.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#140

Post by josu »

paulgb wrote: post #124
logifail wrote: post #121

Earlier quoted context omitted.

> I'm not saying it's a legitimate business Umm, once it's not a legitimate business, it's fraudulent. Exactly what type of fraudulent is a somewhat secondary issue. [of Boiler Room scams of old] "... often rely on high-pressure sales tactics, such as aggressive cold-calling, misinformation, and extravagant promises to assure buyers that they are buying "a sure thing." [..] The SEC requires brokers to adhere to stric…

josu didn’t say it wasn’t fraudulent, just that it wasn’t a Ponzi scheme, which is a particular type of fraud. (I agree)

Bad grammar on my end, just edited the comment to clarify that I was indeed saying that I don't see it as a legitimate business.
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