Home CryptocurrencyAltcoin Income platform Stablegains was sued for promoting UST: Finance Redefined

Income platform Stablegains was sued for promoting UST: Finance Redefined

by SuperiorInvest

Welcome to Finance Redefined, your weekly dose of basics decentralized finance (DeFi) insights — a newsletter designed to bring you significant developments over the past week.

Backlash from the Terra implosion continues to haunt the crypto world, with now-closed stablecoin revenue platform Stablegains being sued for losing customers. Plaintiffs allege that the platform diverted customer funds to Anchor Protocol without users’ knowledge or consent.

Platypus, the DeFi protocol that was leveraged for more than $8 million, is working on a compensation plan to get some of the funds back.

Florida-based Cogent Bank is proposing a $100 million stake in MakerDAO’s RWA Master Participation Trust loans.

Bridging protocols were the primary target of exploits last year, reaching hundreds of millions of dollars in stolen funds. Trustless bridges can mitigate this problem by allowing cross-chain transfers without the need for a centralized administrator, potentially making it a more secure interoperability option.

After nearly four weeks of a bull run, the DeFi market is putting up a valiant fight against the bears. There were smaller price declines and the market was down slightly overall as the bears had the upper hand towards the end of the week.

Income platform Stablegains has been sued for promoting UST as a “safe” investment

DeFi income platform Stablegains is being sued in a California court for allegedly misleading investors and failing to comply with securities laws.

On February 18, the plaintiffs, Alec and Artin Ohanian, filed a complaint in the United States District Court for the Central District of California, alleging that the closed DeFi platform diverted all of its customers’ funds to Anchor Protocol without their knowledge or consent. Anchor Protocol offered up to 20% returns on Terraform Labs algorithmic stablecoin Terra USD (UST).

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Platypus will work on an $8.5 million post-attack compensation plan

The $8.5 million Platypus flash loan attack was made possible by code that was out of sequence, according to a postmortem report by Platypus auditor Omniscia. The DeFi firm is working on a compensation plan for user losses after a flash loan attack drained nearly $8.5 million from the protocol, affecting its stablecoin dollar.

In a February 18 tweet, Platypus said it was working on a compensation plan and asked users not to be aware of their losses in the protocol, saying it would make it harder for the company to address the issue. Asset liquidations are also suspended, the protocol said.

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MakerDAO Votes to Participate in $100 Million Loan with Florida Commercial Bank

Cryptocurrency lending platform MakerDAO is voting on a new proposal to bring another commercial bank into its ecosystem, strengthening the connection between DeFi and traditional finance.

According to the MakerDAO Governance Forum, Cogent Bank – a Florida-based commercial bank – is proposing to participate in $100 million in loans to the MakerDAO RWA Master Participation Trust.

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DeFi Security: How Trustless Bridges Can Help Protect Users

Blockchain bridges allow DeFi users to use the same tokens across multiple blockchains. For example, a trader can use USD Coin (USDC) on the Ethereum or Solana blockchains to interact with the decentralized applications of these networks.

While these protocols may be convenient for DeFi users, they are at risk of being misused by malicious actors. For example, last year Wormhole Bridge – a popular cross-crypto bridge between Solana, Ethereum, Avalanche and others – was hacked and attackers stole over $321 million worth of wrapped Ethereum (wETH), the biggest hack in DeFi history at the time.

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DeFi Market Overview

Analytics data shows that the total market value of DeFi fell below $50 billion last week. Data from Cointelegraph Markets Pro and TradingView show that the top 100 DeFi tokens by market cap had a mixed week, with most tokens trading in the green while a few others bled red.

Thanks for reading our roundup of this week’s most impactful DeFi changes. Join us next Friday for more stories, insights and education in this dynamically developing space.

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