[HN Gopher] Stablegains (YC W22) customers were defrauded out of...
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       Stablegains (YC W22) customers were defrauded out of $40M
        
       Author : akanet
       Score  : 41 points
       Date   : 2022-06-09 20:09 UTC (2 hours ago)
        
 (HTM) web link (twitter.com)
 (TXT) w3m dump (twitter.com)
        
       | perryh2 wrote:
       | Previously discussed [0] Seashell.com is another VC-funded
       | startup that seems shady and is building an investment app
       | advertising high yields sourced from DeFi. Took investment from
       | Do Kwon and had a tweet from Terra [1].
       | 
       | [0] https://news.ycombinator.com/item?id=30375309
       | 
       | [1] https://twitter.com/terra_money/status/1481701273070047232
        
       | mrpadie wrote:
       | Previous discussion:
       | https://news.ycombinator.com/item?id=31431224
        
       | eatonphil wrote:
       | I thought the company was shut down. If the company was shut down
       | how can it be sued?
        
         | akanet wrote:
         | The lawyers contemplating the suit have decided not to sue, but
         | you can sue companies that plan to shut down.
        
         | jjulius wrote:
         | The company is not shut down. Today is June 9th, and
         | Stablegains says[1]:
         | 
         | >Finally, as a result of recent events, we have decided to
         | discontinue the Stablegains service beyond the end of June
         | 2022.
         | 
         | >On July 1, 2022, we will stop supporting the Stablegains
         | service. The mobile app will be delisted from App Stores, the
         | web interface will be taken offline, and it is very likely we
         | will not be able to support withdrawals after that time.
         | 
         | [1]https://blog.stablegains.com/were-discontinuing-the-
         | stablega...
         | 
         | Edit: Also, closing a business doesn't mean that you can no
         | longer be held accountable for what happened while your
         | business was opened. Statute of limitations and whatnot (IANAL)
         | may differ from state-to-state, but allowing a business to be
         | immune from prosecution simply because they closed would be one
         | hell of a gaping legal loophole. It'd be like not prosecuting
         | someone for theft or murder because they had stopped stealing
         | or murdering lol.
        
       | parkerhiggins wrote:
       | A few months ago I found Stablegains. I asked myself, "how is
       | this possible?", "why is this backed by YC?".
       | 
       | Started digging around. Read their TOS and Privacy Policy.
       | Analyzed their relationship with the Anchor protocol.
       | 
       | Then I found screenshots of the founder's notebooks and code.
       | Showing deposit amounts...
       | 
       | At that point I knew this wasn't about actually delivering value
       | to customers if they were so sloppy with their security.
        
       | camdat wrote:
       | The irony of a company called "Stablegains" providing investments
       | for a possibly incredibly volatile resource is astounding. Hope
       | YC puts out a statement on this.
        
         | prattcmp wrote:
         | Yeah, its quite disturbing that YC declined to comment -
         | especially knowing how many similar crypto companies they are
         | funding. I don't want to see YC get targeted and brought down
         | by the Feds.
        
           | verdverm wrote:
           | Wouldn't YC be one of the defrauded investors?
        
             | camdat wrote:
             | Sure, I'm expecting a statement more along the lines of
             | "Here's how we attempted to do due diligence and failed
             | (and thus failed in our responsibility to fund investors)"
             | rather than accepting fiduciary responsibility for
             | Stablecoin.
        
               | clpm4j wrote:
               | I think the due diligence at the point of acceptance into
               | YC is fairly minimal. It might not even go beyond the
               | application answers and the 10min interview... not sure
               | though. I'd be curious to learn more about it.
               | 
               | *edit: Seems YC participated in the follow-on round after
               | the batch ended, so I imagine some extra due diligence
               | goes into that.
        
               | verdverm wrote:
               | The point is that they are an investor and do not run the
               | company. Would they have known about allocation strategy,
               | how to evaluate that? Even if they did know, are they in
               | a position to control or dictate anything within the
               | company?
               | 
               | This applies to investors at any company. At some point
               | you have decided to believe in the founders and executive
               | team, rather than deal with daily operations and
               | micromanaging your portfolio
        
           | jjulius wrote:
           | They've already had ~21 days[1] to make a statement, too...
           | 
           | [1]https://news.ycombinator.com/item?id=31431224
        
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       (page generated 2022-06-09 23:01 UTC)