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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

#241

Post by bombcar »

JoeAltmaier wrote: post #205
drekipus wrote: post #108

Earlier quoted context omitted.

This is really the crux of the issue How many people get duped into thinking there's such a thing as "unlimited gain" and "rewards without risks" Like what, people are just going to give you money without you doing anything? It would be largely beneficial to everyone, if we were to provide some basic economic/financial/"how money works" lessons to everyone through the use of schools and public education..

Um, how all the super-rich got that way. Interest, dividends, annuities, heck any financial instruments at all. But sure, lets make it a moral good that we don't (get to) have money too. The 1% deserve all the money!

Almost all of not all of the current super rich got that way by owning shares in their company. Tesla, Amazon, etc.

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

#242

Post by sgjohnson »

RandomLensman wrote: post #230
gitfan86 wrote: post #210

Earlier quoted context omitted.

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…

6. Buyer not caring about any of this

7. Absolutely nobody at all caring about this until shit hit the fan.

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

#243

Post by bombcar »

drekipus wrote: post #108
Mizza wrote: post #84

The name "StableGains" sounded exactly like "SafeMoon", a heavily advertised pump-and-dump shitcoin that, unsurprisingly, was not safe, and did not go to the moon. Free money with no risk sure sounds appealing though, just don't think too hard about it.

This is really the crux of the issue How many people get duped into thinking there's such a thing as "unlimited gain" and "rewards without risks" Like what, people are just going to give you money without you doing anything? It would be largely beneficial to everyone, if we were to provide some basic economic/financial/"how money works" lessons to everyone through the use of schools and public education..

Even if you have done the education, weeks and years of seeing articles and news reports on how Bitcoin has gone up eleventybillion percent can wear you down, and you start wanting a slice of that pie and become susceptible.

For the people who get sucked into these things, it’s asking a lot for them to educate themselves without being burned - especially when there are so many communities dedicated to shoving out naysayers.

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

#244

Post by sgjohnson »

okwubodu wrote: post #46
oefrha wrote: post #36

Earlier quoted context omitted.

If they’re unlucky they lose $500k, which is nothing. If they’re lucky they get a Coinbase. Why not.

$42 million of real people’s money was lost. That’s a net negative to society whether or not it shows up on a balance sheet.

So?

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

#245

Post by bombcar »

xtracto wrote: post #155

This made me think... back in 2012, a startup called Kueski (now a very successful BNPL in Mexico) applied for YC (twice in 2 years). The founders were rejected, even though the business model was sound and the economics were pretty well laid out (I know the CEO and ge is a really meticulous person). The reason YC gave for the rejection was that Mexico was an unknown market, and they felt lending in there was too ris…

YC is just a VC firm. They avoid known risks and embrace unknown ones: that’s the whole point.

They don’t “understand” Mexico and are scared that their investment will get Pemex’d or something - and since that’s a known financial risk their backers would be like “wtf you doing?”

But “unknown” risks (even if actually quite easy to see) don’t have the same pushback from their investors. In fact, their investors may be demanding that they heavily invest in unknown risks.

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

#246

Post by dropnerd »

bombcar wrote: post #233
dropnerd wrote: post #203

Earlier quoted context omitted.

its months and months worth of tweets, and that's all they talked about during this year. first a cryptic puzzle as a recruiting tool for analysts: https://twitter.com/Galois_Capital/status/148693793605468979... followed by months of warnings like this: https://twitter.com/Galois_Capital/status/151217543903232819... and threads pushing the systemic risk angle: https://twitter.com/Galois_Capital/status/150461116699529…

That chain in the first tweet should be enough to frighten anyone.

imagine moving your savings to stablegains. you're definitely not reading galois tweets.

why the founders didn't flinch... who knows? maybe they decided that 3ac being invested is their security.

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

#247

Post by sumeno »

Ambolia wrote: post #179
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…

The problem with web3 and crypto in general is that most people and energy get attracted by the potential to get rich, and being useful is an afterthought. I would be more attracted if I saw more products that tried to be useful first, and then try to make money for it afterwards. But it's harder to direct so much energy into projects like that.

Products that are trying to be useful first do their due diligence and realize that blockchain is wholly unsuitable for anything other than creating speculative assets and just use a normal database instead.

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

#248

Post by sumeno »

NelsonMinar wrote: post #234
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…

The participation of big-name Silicon Valley VC in some obvious financial frauds is really disappointing to me.

It's the least surprising thing in the world to me

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

#249

Post by bombcar »

Ekaros wrote: post #175
flaviut wrote: post #167

Earlier quoted context omitted.

TIPS and I Bonds

[flagged]

Since the US can print money to pay its debts you technically can’t “lose” in dollar-denominated bonds.

But you can still lose to inflation, collapse of the US, etc. The term “risk-free rate” is used as a baseline in comparing other financial assets; there are still risks involved and for those above a certain wealth value, spending some percentage to mitigate those may be intelligent.

Dual passports and foreign holdings are often involved.

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

#250

Post by ryanSrich »

drekipus wrote: post #108
Mizza wrote: post #84

The name "StableGains" sounded exactly like "SafeMoon", a heavily advertised pump-and-dump shitcoin that, unsurprisingly, was not safe, and did not go to the moon. Free money with no risk sure sounds appealing though, just don't think too hard about it.

This is really the crux of the issue How many people get duped into thinking there's such a thing as "unlimited gain" and "rewards without risks" Like what, people are just going to give you money without you doing anything? It would be largely beneficial to everyone, if we were to provide some basic economic/financial/"how money works" lessons to everyone through the use of schools and public education..

> Like what, people are just going to give you money without you doing anything?

That’s disingenuous. When you put money into a high yield savings account, or even into a fiat backed 1:1 stablecoin you’re doing something. You’re providing liquidity. A high yield savings account (2-4%) or yield on a fiat backed 1:1 stablecoin (5-8%) is risky in the sense that you need to trust a bank (or exchange), but that’s eased by FDIC (which some exchanges like Gemini have [1]).

1. https://www.gemini.com/dollar

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