Market maker Wintermute loses tens of millions of USD! Near team fights back: "We are no longer friends"

The founder of the main market maker in the crypto market, Wintermute, @EvgenyGaevoy, has publicly called out the public blockchain Near and its derivative project Aurora Labs, stating that they are no longer friends. This dispute arose when Wintermute took on the stablecoin USN of Near, owed to FTX creditors, but was denied redemption.

Wintermute Unable to Redeem Near Stablecoin

Wintermute founder @EvgenyGaevoy stated that Near Foundation NF and Aurora Labs failed to fulfill the redemption promise of USN.

Although the loss is not significant, @EvgenyGaevoy believes it is detrimental to the public interest, hence the need to speak out.

@EvgenyGaevoy explained that USN, the stablecoin launched by Near, was initially designed similarly to Terra's UST. However, after the collapse of UST, USN transitioned into a non-algorithmic stablecoin supported by USDT, ultimately ending due to issues with over-issuance and mismatched collateral. The project was initially launched by Aurora Labs with NF incentives, and Near proactively provided funding to address the shortfall.

Assisting FTX Creditors but Being Slashed

@EvgenyGaevoy stated that Wintermute has been working with FTX to liquidate assets since this spring, including $11.2 million worth of USN.

After trading with FTX, Wintermute offered $11 million to FTX creditors.

During negotiations with Near and Aurora, Wintermute confirmed the ability to redeem USN for USDT. However, when the actual redemption was requested, Near refused.

@EvgenyGaevoy mentioned that since August, they have not received the USDT that USN should have been redeemed for.

Only Willing to Offer 20%, Wintermute Helpless

@EvgenyGaevoy mentioned that Wintermute received a final offer of 20% of that amount.

Wintermute proposed an alternative solution, hoping to use locked NEAR tokens as a negotiation substitute, but it was not accepted.

Near's Reversal, Wintermute's Warning

@EvgenyGaevoy stated that Aurora accepted the redemption request in August, but suddenly disagreed last week, Near claimed the right to keep $11 million for themselves, causing harm to Wintermute.

As of now, @EvgenyGaevoy still cannot understand the reason and intends to seek legal avenues for resolution.

@EvgenyGaevoy also emphasized to avoid misunderstandings in the community that they did not deploy any short positions on any NEAR tokens.

Ultimately, while Wintermute acquired a $200,000 discounted purchase from the FTX restructuring team, they encountered the unfortunate situation of the issuer refusing redemption.