Stablegains Sued for Misleading Investors on ‚Safe‘ UST Investment
• Stablegains is being sued in a California court for allegedly misleading investors and failing to comply with securities laws.
• The plaintiffs allege that Stablegains diverted all customer funds to Anchor Protocol without their knowledge or consent, and falsely advertised UST as a safe investment.
• The complaint also states that Stablegains failed to disclose that UST is a security, and did not register with the SEC either as a securities exchange or broker-dealer.
Stablegains Sued for Misleading Investors
Decentralized finance yield platform Stablegains has been sued in a Californian court for allegedly misleading investors and failing to comply with securities laws. On Feb. 18, plaintiffs Alec and Artin Ohanian filed a complaint in the U.S. District Court for the central district of California, alleging that the shuttered DeFi platform diverted all of its customer funds to Anchor Protocol without their knowledge or consent.
Stablegains Failing To Comply With Securities Laws
The plaintiffs allege that UST was a security and that Stablegains broke federal securities laws by failing to disclose this information and by not registering with the U.S. Securities and Exchange Commission either as a securities exchange or as a broker-dealer.
Anchor Protocol Offered Yields Of Up To 20%
Anchor Protocol offered yields of up to 20% on the Terraform Labs algorithmic stablecoin, Terra USD (UST). Stablegains offered a 15% gain for its customers, pocketing the difference from yields offered by Anchor Protocol.
UST Ecosystem Collapsed In May
The Ohanians stated that there were „disastrous consequences for Stablegains‘ customers,“ following the collapse of the UST ecosystem in May when UST de-pegged from the dollar, causing significant losses for users who had invested in it through Stablesgaines’s services.
In conclusion, this lawsuit alleges that Stablegains misled investors concerning investment safety protocols while diverting customer funds into Anchor Protocol without users’ knowledge or consent, breaking federal securities laws in multiple ways including failing to register with SEC as either an exchange or broker-dealer.