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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

#211

Post by thawaya3113 »

pjc50 wrote: post #156
rsynnott wrote: post #97

Earlier quoted context omitted.

That raises an interesting ethical problem, really; should there be a duty to report this sort of thing, or is "scheme X is fundamentally flawed/a scam and investors will lose everything" legitimate proprietary information? As I understand it, various analysts were pretty sure at the time that Madoff's scheme was a Ponzi, but in general they didn't tell anyone (in fairness, one attempted to and had trouble getting li…

Unfortunately, you can shout "this is a scam" from the hilltops and people won't listen.

There’s a great recent Bloomberg Podcast episode (Odd Lots?) where the CEO of FTX interactive is describing yield farming, and it dawns on everybody (Matt Levine states it explicitly) that what he is describing is a Ponzi scheme.

And then the CEO guy basically says that their old school finance may consider it a Ponzi but it’s the future of finance and they’re just gonna end up suffering from FOMO.

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

#212

Post by adrr »

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)

So how is the 20% interest created?

Excuse my ignorance on crypto. I don’t understand how UST can drop 90% when I assume it required some sort payment of some other currency/coins to get mint them. I heard it was tens billions of UST was minted. So what happened to these coins? Were they used to pay out the interest?

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

#213

Post by break_the_bank »

Asparagirl wrote: post #34

They’re just one of several shiny fintech apps/websites running the same scam, a modern two-and-twenty on a ponzi — but with really nice UI. Alice (alice.co / @alice_finance) is another prominent one that may have lost customer funds, which was also using the Anchor protocol. It’s unclear how much they lost, but it’s interesting that Do Kwon’s name is still an actual logo listed on their home page. And Vertex Protoco…

Coinbase & Sequoia funded Indian version of the same thing has similar problems. They claim not to be using anchor while their landing page mentioned anchor before UST de pegged https://mobile.twitter.com/daglihet/status/15240042208687800...

I’m guessing they don’t have enough users and can make people whole using their seed fund.

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

#216

Post by disiplus »

gitfan86 wrote: post #210
rsynnott wrote: post #143

Earlier quoted context omitted.

> 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. This was absolutely a thing; most large Ponzi schemes have feeder funds. https://www.reuters.com/article/us-pwc-madoff-settlement-idU...

Indirection seems to be very valuable with scams. The 2008 housing crash had a lot of layers: 1. Loan Application (Borrower Lying about income) 2. Mortgage Originator ( Not validating loan application ) 3. Mortgage Back Security Creators ( Obfuscate what is in the security ) 4. Ratings Agencies ( Not being honest that step 3 happened ) 5. Sellers of MBS ( Not being honest that steps 1-4 exist ) I don't know enough ab…

im pretty sure at this point everybody knows there is nothing behind it, at least 80% people that invest in something like this, so like Ponzi they hope that enough people will come in that they can cash out before everything falls out.

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

#217

Post by ZeroGravitas »

okwubodu wrote: post #30

The last few weeks (months, really) has highlighted an incredible lack of discernment in the VC-verse wrt the thing we call web3. Now. I have no experience doing what YC does and don’t claim to, but the jig here was so transparent that the smallest drop of “street smart” should’ve been enough to set off some alarms. We’re approaching a point where being passed over for “culture fit” is a compliment. Hopefully the emb…

Or, they knew all that but thought they would probably personally benefit anyway?

You can get rich in a gold rush selling shovels. And it doesnt really matter if there's no gold, or not enough for all the miners to make a living. And why would a shovel salesman focus on the negative like that?

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

#218

Post by im3w1l »

hardwaresofton wrote: post #75
okwubodu wrote: post #30

The last few weeks (months, really) has highlighted an incredible lack of discernment in the VC-verse wrt the thing we call web3. Now. I have no experience doing what YC does and don’t claim to, but the jig here was so transparent that the smallest drop of “street smart” should’ve been enough to set off some alarms. We’re approaching a point where being passed over for “culture fit” is a compliment. Hopefully the emb…

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…

To mean this sounds like it's trying to shift the blame to an outgroup. I think we have to acknowledge that there are bad people within our (SWE) ranks too.
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