Wintermute threatens lawsuit against Near Foundation over failed $11M stablecoin conversion

Evgeny Gaevoy, the CEO of Crypto market maker Wintermute, said his firm would take legal action against Near(NEAR) Foundation and Aurora Labs for failing to deliver on their promise to convert $11 million worth of USN stablecoins into Tether’s USDT.

The issue

Gaevoy explained that the bankrupt FTX estate had tasked the liquidity provider to facilitate the sale of $11.2 million worth of USN stablecoins.

According to him, his firm had “executed the transaction providing over $11 million to FTX creditors” in the confidence that Near Foundation was going to “redeem USN to USDT on a 1-to-1 basis” based on its public promises and private assurances from the Foundation and Aurora Labs that it could facilitate the transactions.

However, Aurora and Near Foundation have “unilaterally decided to refuse without providing any logical explanation.” Gaevoy said:

“[Near Foundation] refused to honor their commitments. 2.5 months later, we haven’t received any USDT for the USN sent to them in August. The final offer we got was 20% of the sum in question.”

He continued that:

“[Near Foundation] can call it however they want – the bottom line is their refusal to convert our USN to USDT in line with their public and private commitments has caused us direct harm.”

As a result, the Wintermute CEO has promised to “pursue all legal avenues against both Near Foundation and Aurora” and urged other members of the crypto community in similar positions to reach out.

USN was launched as an algorithmic stablecoin in 2022 on Near protocol by an independent team called Decentral Bank in collaboration with Proximity Labs. However, the stablecoin soon faced significant issues, resulting in the Foundation initiating a $40 million fund to aid USN-to-USDT conversions in October of the same year.

‘Suspicious origin’ of Wintermute’s USN

In its response, Near Foundation’s new CEO Illia Polosukhin reportedly said Wintermute’s attempt to convert $11.2 million USN stablecoins into USDT was rejected because the USN was of “suspicious origin and may be related to illegal activities,” according to a Nov. 8 post on X by Wu Blockchain.

Near Foundation and Aurora Labs are yet to respond to CryptoSlate’s request for additional commentary.