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Welcome to this episode of "Web3 Finance Flash Insights for the Busy Web3 Finance Enthusiast", the podcast presented by CryptoCFOs, the premier members-only community for CPAs, CFOs, Investors, and other finance professionals.
First up, we discussed the recent victory for DeFi giant Maker as a US judge dismissed a class-action lawsuit against the platform that alleged it misrepresented risks investors faced, leading to catastrophic losses of collateral on MakerDAO back in 2020.
In other news, on-chain data suggests that Voyager Digital, the CeFi platform that filed for Chapter 11 bankruptcy in July 2022, is selling assets through Coinbase crypto exchange, allegedly receiving at least $100 million in USD Coin since Feb. 24. The United States Securities and Exchange Commission (SEC) has also objected to Binance.US' move to acquire over $1 billion of assets belonging to Voyager.
Moving on, we discussed how decentralized finance yield platform Stablegains has been sued in a Californian court for allegedly misleading investors and failing to comply with securities laws, alleging that the shuttered DeFi platform diverted all of its customer funds to the Anchor Protocol without their knowledge or consent.
Finally, we talked about the SEC filing a lawsuit against Terraform Labs and its founder, Do Kwon, for allegedly “orchestrating a multi-billion dollar crypto asset securities fraud.”
That's it for this episode of Web3 Finance Flash. Thanks for tuning in and be sure to subscribe to our podcast for more quick and informative updates on the rapidly changing world of Web3 finance.
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What is Web3 Finance Flash: Insights for the Busy Web3 Finance Enthusiast?
"Web3 Finance Flash: Insights for the Busy Web3 Finance Enthusiast" is a podcast presented by CryptoCFOs, the premier members-only community for CPAs, CFOs, Investors, and other finance professionals. Each episode brings you quick and informative updates on the ever-changing world of Web3 finance. Whether you're a busy enthusiast looking to stay informed or a seasoned Web3 finance professional, this podcast provides valuable insights and analysis on the latest developments in the space.
A US judge has dismissed a class-action lawsuit against DeFi crypto lender Maker, which alleged the platform misrepresented risks investors faced, leading to catastrophic losses of collateral on MakerDAO back in 2020. The lawsuit has been dismissed because Maker Foundation, which built the Maker protocol and created the initial supply of tokens, has been dissolved and is no longer "a proper defendant." The judge also argued that the “plaintiff has failed to allege facts sufficient to support each of his claims for relief.” This was the second amended version of the complaint. Maker is a leading DeFi lending protocol that allows users to withdraw loans in the platform’s native stablecoin DAI by pledging some cryptocurrencies like ETH as collateral. On March 12, 2020, a steep crash in the price of ETH led to huge amounts of the token being sold for free in major debt auctions as a lack of competition allowed some bidders to win liquidation auctions in exchange for 0 DAI.
In other news, it's been alleged that Voyager Digital, the centralized finance (CeFi) platform that filed for Chapter 11 bankruptcy in July 2022, is selling assets through Coinbase crypto exchange. On-chain data suggest that Voyager received at least $100 million in USD Coin in three days, starting Feb. 24. According to on-chain analyst Lookonchain, Voyager has sent crypto assets to Coinbase almost daily since Valentine's Day, transferring millions of dollars using a mixed bag of cryptocurrency tokens. Despite the sell-off, Voyager still holds nearly $530 million in crypto, with the largest shares in Ether and Shiba Inu. The United States Securities and Exchange Commission (SEC) has also objected to Binance.US' move to acquire over $1 billion of assets belonging to Voyager. The SEC questions whether Voyager debtors can recoup some of their assets following the firm's bankruptcy. Coinbase has not yet commented on the allegations. We will keep you updated on any developments as this story develops.
In a recent development, decentralized finance yield platform Stablegains has been sued in a Californian court for allegedly misleading investors and failing to comply with securities laws. The lawsuit alleges that Stablegains diverted customer funds to the Anchor Protocol without their knowledge or consent, and offered yields of up to 20% on Terraform Labs algorithmic stablecoin, Terra USD (UST), while falsely advertising it as a safe investment. The plaintiffs allege that UST was a security and that Stablegains broke federal securities laws, failing to disclose that UST is in fact a security. Following the collapse of the UST ecosystem in May, Stablegains allegedly altered its website and promotional material touting UST as “safe” and “fiat-backed,” effectively conceding that UST was none of those things. The plaintiffs did demand a trial, however, the specific amount sought in damages was not detailed. In related news, the SEC filed a lawsuit against Terraform Labs and its founder, Do Kwon, for allegedly "orchestrating a multi-billion dollar crypto asset securities fraud" on Feb. 16. We will continue to monitor this story and keep you informed of any new developments.