Wintermute, in an unexpected public disclosure, has raised a serious allegation against the Near Foundation (NF) and Aurora Labs regarding the redemption process of the USN stablecoin. In a series of tweets, Wintermute’s CEO, Evgeny Gaevoy, criticized the entities for not honoring their public and private commitments to redeem USN tokens for USDT, leading to substantial financial repercussions for Wintermute and possibly setting a detrimental industry precedent.
USN’s Troubled Journey
Initially launched as an algorithmic stablecoin similar to Terra’s UST, USN underwent a transformation to a non-algorithmic model backed by USDT amid the market’s instability. Despite the changes and a subsequent collateral deficit, NF announced the USN Protection Programme, assigning Aurora Labs to oversee its operation. However, the program has since been marred by a failure in implementing redemption promises.
The Unresolved Transaction
Wintermute, in its role in asset liquidation for the FTX bankruptcy estate, sold 11.2 million USN, expecting to redeem the tokens for over $11M for FTX creditors. This expectation was based on NF’s assurances and Aurora’s private confirmations. The subsequent refusal to redeem these tokens has left Wintermute in a state of limbo, with negotiations leading to a disappointing offer from NF amounting to only a fraction of the original value.
The Path Forward
Highlighting the lack of accountability and clarity from NF and Aurora, Wintermute is preparing to take legal steps. Gaevoy’s disclosure is not only a call for resolution but also a signal to the industry about the importance of corporate responsibility and transparency. The company is reaching out to others similarly impacted and is firm on its stance to switch to an adversarial mode if their calls for redemption continue to be ignored.
The unfolding scenario raises questions about trust and integrity in the crypto market, as prominent entities like NF and Aurora Labs face scrutiny. Wintermute’s commitment to transparency and the industry’s ethical standards is evident as they navigate through this challenging episode.
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