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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

#341

Post by rchaud »

hbbio wrote: post #221
whatever1 wrote: post #170

Earlier quoted context omitted.

Trustless computing might have a future, trustless money no.

Money is a use case that attracts scams indeed, and will be harder to get right. But we're building for a future where apps like Calendly can be smart contracts. With new blockchains* that have a very low tx fee (imagine $0.00001 / tx), I clearly see many services migrate to smart contracts. They won't require any subscription, existing data is never at risk of being wiped out, and hopefully we will keep optimizing a…

> But we're building for a future where apps like Calendly can be smart contracts. With new blockchains* that have a very low tx fee (imagine $0.00001 / tx), I clearly see many services migrate to smart contracts.

Operative word being "imagine low transaction costs". We're in the 14th year of hearing about how low crypto fees can be compared to Visa, MC and Western Union and yet not a single real example with consumer-level scale has emerged.

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

#342

Post by nemothekid »

Invictus0 wrote: post #290
hbbio wrote: post #221

Earlier quoted context omitted.

Money is a use case that attracts scams indeed, and will be harder to get right. But we're building for a future where apps like Calendly can be smart contracts. With new blockchains* that have a very low tx fee (imagine $0.00001 / tx), I clearly see many services migrate to smart contracts. They won't require any subscription, existing data is never at risk of being wiped out, and hopefully we will keep optimizing a…

Excuse my language, but why the fuck would I want my calendar on the blockchain, and also pay for the privilege?

Hopefully the transactions fees would be so high and the confirmation times so long, that it forces your manager to think twice about scheduling that "check-in" 2 days before a customer demo.

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

#343

Post by puranjay »

lottin wrote: post #319
MacsHeadroom wrote: post #238

Earlier quoted context omitted.

Crypto wallets double as a kid of single sign-on identity. If you have a crypto wallet in a browser add-on, you already have a paudonymous account usable on tens of thousands of crypto enabled web apps. All you have to do is one-click sign-in. No sign-up flow, no emails, no commitment. You just tap login and you have an account. One more tap and you've paid. Plus other benefits like effectively free micro-transaction…

What happens when someone steals your key?

You lose access to your account and all its funds

Which is why I said that the tech really needs a lot of improvements. But the core idea of a browser wallet that takes care of logins and payments is really powerful and might just be crypto’s killer app

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

#344

Post by rchaud »

braingenious wrote: post #85
xuki wrote: post #68

https://i.imgur.com/qz4EeQS.jpg - This is (was?) their ads "15% interest. No surprises."

15% interest? No! Surprises!

The most egregious case of false advertising since Homer's lawsuit against the "all you can eat" seafood restaurant.

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

#345

Post by mrep »

ryanSrich wrote: post #335
fshbbdssbbgdd wrote: post #329

Earlier quoted context omitted.

You’re saying that there’s an account with FDIC coverage that pays 5-8% returns? Please provide a link. This doesn’t line up with my understanding of banking regulations. The current risk-free return of a callable loan on dollars is less than 1%, so I don’t see how the FDIC would agree to guarantee 5-8%.

The link is literally in the comment you’re replying to

Quoting vel0city [0]:

From their site:

> ¹ FDIC insurance applies only to the USD reserve funds. GUSD exist as ERC-20 tokens on the Ethereum blockchain; tokens are under the user’s self-custody, and are not insured through Gemini.

So if you send them USD, they'll hold your USD in an FDIC insured account. If you hold GUSD, and it turns out GUSD is a fraud or is otherwise insolvent, your SOL.

[0]: https://news.ycombinator.com/item?id=28147244

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

#346

Post by optimalsolver »

rchaud wrote: post #344
braingenious wrote: post #85

Earlier quoted context omitted.

15% interest? No! Surprises!

The most egregious case of false advertising since Homer's lawsuit against the "all you can eat" seafood restaurant.

Fortunately, his lawyer had experience from the case against the makers of "The Neverending Story".

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

#347

Post by wsgeorge »

teraflop wrote: post #274
itsoktocry wrote: post #219

Earlier quoted context omitted.

And the YC board looked at this and funded it. That's unbelievable, isn't it?

Not unbelievable at all. I've pointed this out before, and I'll probably have cause to do so again, but Y Combinator has twice funded companies whose entire business model is smuggling: https://techcrunch.com/2014/08/13/backpack-connects-you-with... https://techcrunch.com/2016/01/28/shypmate-pays-travelers-to...

> whose entire business model is smuggling

That's interesting. I never thought of it that way. Solutions to the "Amazon doesn't deliver here" problem are quite popular in Ghana. Asking someone returning to get you something is quite common. I have friends who've created businesses around this.

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

#348

Post by soared »

Better link: https://stablegains.zendesk.com/hc/en-us/articles/6104159088...

I don’t know anything about stablegains but this reads like they just take money and put it into UST, so users lost 80% of their funds with the depeg. “This is something all users signed up for” -‘stable’gains

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

#349

Post by caeril »

lbriner wrote: post #309
frob wrote: post #289

Earlier quoted context omitted.

Wow, you're absolutely right. This story about how HN invested in an obvious Ponzi scheme (seriously, if the name Stablegains doesn't throw off alarm bells, you deserve to lose your money) fell over 10 spaces in the time it took me to click to the comments, read your comment, and click back to check.

I don't know what due-diligence that YC do but I can imagine, as someone who only knows the basics of crypto-currency, of being sucked into some confident founder telling me that, "of course it is safe, it uses stable coins". The risks seem really obvious after everything falls through but there are plenty of other companies that are "obvious scams" who happen to have made it by luck/skill/investment.

> The risks seem really obvious after everything falls through

The risks are obvious the second you see that they offer 15% yield, which is roughly DOUBLE the current yield of the average junk bond, and about QUADRUPLE the yield at the time YC closed.

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

#350

Post by zhoujianfu »

rchaud wrote: post #344
braingenious wrote: post #85

Earlier quoted context omitted.

15% interest? No! Surprises!

The most egregious case of false advertising since Homer's lawsuit against the "all you can eat" seafood restaurant.

"Do these sound like the actions of a man who had had ALL HE COULD EAT?!"
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