Cryptocurrency Market Maker
Wintermute CEO Evgeny Gaevoy revealed today on social media that the Near Foundation and Aurora Labs have violated their public commitments by refusing to redeem their stablecoin USN.
USN’s Birth and End
Wintermute’s Dispute with Near Foundation
Public Interest Over Commercial Interests
“NEAR Foundation Unreleased Statement” Circulating in the Community
USN was launched through a collaboration between the Near Foundation (NF) and Aurora Labs as a stablecoin. It initially operated as an algorithmic stablecoin until it switched to a collateralized model after the collapse of UST. However, due to improper operations, USN faced collateral shortages, leading the Near Foundation to eventually recommend the project’s termination and provide $40 million in funding to Aurora Labs to deploy the “USN Protection Plan,” allowing affected users to fully redeem their assets.
Evgeny Gaevoy disclosed that Wintermute has been working with the FTX bankruptcy restructuring team since this spring to facilitate the liquidation of its assets and maximize the distributable assets to creditors. As part of this collaboration, the FTX bankruptcy restructuring team requested Wintermute’s assistance in liquidating $11.2 million of USN. After conducting research and coordinating with Aurora Labs (which agreed to redemption at that time), Wintermute committed to the transaction and provided over $11 million to FTX’s creditors.
However, after Wintermute submitted a redemption request for USN to the Near Foundation, the foundation refused to honor the commitment and only expressed willingness to redeem 20% of the face value of USN. In response, Wintermute even proposed an alternative investment quote, allowing the foundation to pay off most of the debt in “locked NEAR tokens.” So far, the Near Foundation has not shown a willingness to explore these solutions.
Evgeny Gaevoy believes that the lack of effective communication between Aurora and the Near Foundation may have led to Aurora’s initial agreement to redemption and the subsequent unilateral refusal by the foundation without providing any reasonable explanation. Additionally, while Evgeny Gaevoy did not explicitly state it, he implied that the Near Foundation’s refusal to redeem may be due to financial difficulties.
Finally, Evgeny Gaevoy stated that the company will take all legal measures to hold NF and Aurora accountable and urged all relevant parties rejected by the Near Foundation to contact them.
Evgeny Gaevoy stated that he could have kept this incident hidden from the public and resolved it privately with the Near Foundation. However, after experiencing the 3AC, Terra, FTX, and Alameda scandals, he felt obligated to disclose the matter to the public.
In response to criticism from Wintermute’s CEO, an internal conversation screenshot allegedly from the NEAR Foundation circulated in the community. The screenshot, purportedly from a yet-to-be-released public statement by the NEAR Foundation, argued that the reasons for rejecting Wintermute’s redemption request included:
Wintermute’s arbitrage behavior conflicting with the goal of “protecting ‘small individual users’ affected in the NEAR ecosystem.”
Significant KYC/AML concerns, with the USN’s sources being suspicious and potentially linked to illegal activities or future litigation or court orders.
Therefore, Aurora Borealis Ltd. (ABL) exercised its discretion under USNPP terms and rejected WM’s redemption request.