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#HotColumn Wintermute to Sue Near Foundation Over Failure to Honor $11M Stablecoin Redemption Deal With FTX
Evgeny Gaevoy, the founder and CEO of the crypto market-making firm Wintermute, has revealed plans to sue the Near Foundation, the non-profit organization behind the Near protocol, over its failure to honor a stablecoin deal entered in August.
According to a tweet, Gaevoy intends to pursue all legal avenues against the Near Foundation and Aurora Labs – the development company behind Aurora, an Ethereum Virtual Machine blockchain that runs on the Near protocol.
The Back Story
Following the collapse of the cryptocurrency exchange FTX in November 2022, the bankrupt firm has been liquidating its assets to maximize distributions for creditors. Wintermute, which has been involved in the process since March, was asked to facilitate the sale of 11.2 million USN, a Near-native stablecoin.
USN was initially designed to be an algorithmic stablecoin, but due to Terra’s UST collapse, the asset was upgraded to a non-algorithmic model in June 2022 to be fully backed by Tether (USDT) on a 1:1 basis. After the upgrade, USN experienced a $40 million collateral gap, which caused the Near Foundation to create a USN Protection Programme in October 2022. The program was launched to make users whole, and the $40 million grant was sent to a subsidiary of Aurora Labs.