People didn't know they were investing in Terra. When the cryptocurrency collapsed, they lost everything — and a Y Combinator-backed startup is to blame.
"I've been dealing with some loss in the last two years," Jonah told Insider."I lost my mom, I lost my grandmother. I lost my other grandmother. Now I've lost all my life savings. In this last week, like every 10 seconds, I think about what an idiot I've been and what a horrible situation I've put myself in."during last month's crash without realizing they had invested primarily in terra.
On the company's website, however, he provided a different explanation of Stablegains's services. In posts that have since been taken down or modified, Stablegains told users Baldwin's experience was similar to those of many customers. Most were men, had never invested in cryptocurrency before but feared rising inflation, and ultimately felt that the company had assured them in numerous ways that their principal investment was safe.
Surprised by Stablegains admission that it had invested customers' money in terra, another customer, Colin Tindall, decided to have a close read of the company's terms of service. Buried deep into the 14 page document he found out that by using the firm's services, Stablegains customers had agreed to allow the company to put their money in Anchor, the terra-based lending platform.
Stablegains has since removed its Y Combinator badge from its website. Y combinator didn't respond to a request for comment from Insider.Shortly after the crash last month, the law firm Erickson Kramer Osborne announced it was looking into a class-action lawsuit against Stablegains. But Kevin Osborne, a partner at the firm, recently told customers that ultimately the firm decided not to pursue actions against the company.
Lawyers for the law firm Eversheds Sutherland LLP who specialize in cryptocurrency compliance told Insider that cryptocurrency firms were still unclear about the government agency that has jurisdictional authority over the industry.
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