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Catheon Failed to Tell Community About $19.6 Million Terra Loss

Catheon Failed to Tell Community About $19.6 Million Terra Loss #Catheon #Failed #Community #Million #Terra #Loss. Here is what we have for you today on TmZ Blog.

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Catheon Gaming failed to tell its community about a $19.6 million loss earlier this year

The gaming protocol lost the sum by investing in the Terra platform, Anchor

The project informed investors but not the community, saying it has no duty to do so

Gaming blockchain Catheon Gaming lost around $19.6 million in the Terra/LUNA collapse but didn’t tell the community, only informing big investors of its exposure. The company, which calls itself the “#1 fastest growing blockchain emerging giant”, made the loss when it failed to extricate itself from the death spiral that ensued in May, when it had over $22 million in the related Anchor protocol. The loss, exposed by blockchain sleuth ZachXBT, led to the Chief Operating Officer Lewis Grafton saying that it was “in the project’s best interest” not to alert its followers, and that only its big backers should have been informed.

Newly leaked messages between the @SolChicksNFT @CatheonGaming CEO and COO show the project lost up to $20m of treasury funds due to the UST implosion in May 2022 and decided not to inform the community.

— ZachXBT (@zachxbt) November 15, 2022

“How Have We Lost So Much Money?”

Leaked messages between Grafton and CEO William Wu show a $22.1 million exposure to the Anchor protocol as of early May, with Gratfon urging Wu to get out of Anchor as the Terra death spiral was just beginning, between May 10th and 12th, right before the whole thing crashed to zero.

Wu refused, leading to the original $20 million investment to sink to just $400,000. Wu informed a few select major backers of the loss but kept the information from the wider community, with Grafton telling ZachXBT that they didn’t feel it necessary:

On UST – we discussed and disclosed it with our largest private holders but decided that it was in the project’s best interest not to make a public announcement and risk unnecessary concern given that we still have more than 5 years of runway and we have zero leverage.

Bad Actor

This morning, Catheon put out an update, accusing ZachXBT of being a “bad actor” who was only interested in self publicity:

The team is aware of leaked screenshots and emails purportedly relating to internal Catheon Gaming communications released by ZachXBT. We strongly condemn deliberate attempts to leak confidential company information for the purposes of generating publicity.

Catheon added that it “allocated a portion of treasury to UST as we believed this would be an efficient way to store capital that was not immediately needed”, which was an odd move considering they moved it from USDT, and added that it was not a “public company or DAO and we do not have an obligation to share confidential financial information if it is not in the interest of longer term objectives.”

However, this rationale didn’t fly with skeptics, who reiterated Catheon’s poor fund management:

Bro what the fuck lol… why are these projects all trading their fucking treasury’s…so many dumb mf’ers out here it’s wild

— Keyboard Monkey -KBM- (@KeyboardMonkey3) November 15, 2022

What did they think was the best move, Lmfao.
Not tell people they mismanaged funds and just work with it?

— 𝕷𝖆𝖜𝖆𝖑 💎🎋 (@LaRoshe_) November 16, 2022

Fortunately it does seem that Catheon has enough funds to continue for some time, but its supporters will hope that it doesn’t fall for the next shiny interest-earning protocol that flashes an ankle its way.

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