The cryptocurrency industry has witnessed numerous lawsuits involving investors losing their funds on various platforms. Most of these cases involve the misappropriation of customers’ funds and the false promotion of digital tokens to win investors’ confidence.
A recent lawsuit involves Stablegains, a decentralized finance yield platform, and its customers. The investors claimed that the platform diverted their funds to another firm and made false promises.
Stablegains is now facing a lawsuit from some of its customers who allege that the platform misled them by falsely advertising their products and services. The lawsuit also accuses the DeFi platform of seeking personal benefits with customers’ funds, resulting in the loss of their investments and the platform’s eventual shutdown.
Alec and Artin Ohanian filed the case on February 18 in the US District Court for the Central District of California. The plaintiffs claimed that Stablegains diverted their funds to Anchor Protocol, another platform, without their knowledge or consent.
Notably, Anchor Protocol offered investors a 20% yield using Terraform Labs’ algorithmic stablecoin, Terra USD (UST). In contrast, Stablegains offered its users a 15% yield from the returns it generated from Anchor Protocol, thereby profiting from the difference in yields from its dealings with Anchor Protocol.