Elixir is a scam! K3 Capital angrily accuses DeUSD of misappropriating funds and openly lying, and intends to send the founder to prison.

Decentralized Finance (DeFi) controversy continues to escalate. The fund management organization K3 Capital claims it will take legal action against the stablecoin protocol Elixir, accusing the protocol of being a coordinated fraudulent scheme led by its founder Philip Forte and assisted by Caleb from Stream Finance (coordinated fraudulent scheme).

K3: Elixir misappropriated funds and openly committed fraud.

K3 pointed out that Elixir claims its product is a basis arbitrage (basis trading) strategy, but in reality, it has lent 68 million USD to Stream Finance, effectively becoming a tokenized fund-of-funds (tokenized fund-of-funds), with completely different risk attributes.

In addition, Elixir views lenders as junior capital (junior capital) and claims that Stream holds about 90% of the deUSD supply (approximately $75 million). K3 states that this claim is inaccurate, as Stream has borrowed stablecoins using deUSD as collateral across multiple money markets, and its actual holdings are far lower than the official figures.

K3: Elixir preferential redeeming parties, ignoring the $68 million asset gap

K3 criticizes Elixir for allowing existing deUSD holders to exchange for USD assets at a 1:1 ratio, while completely ignoring the $68 million gap on its balance sheet, resulting in actual losses being borne by lenders in the borrowing market, rather than Stream.

K3 estimates based on on-chain data that Stream's actual net exposure to deUSD is only about 11.34 million dollars, far below the borrowed amount. This means that Stream may not be able to fully repay the loan, and the losses will ultimately be shared by multiple DeFi lending markets' lenders.

Simeon of K3 Capital stated that Philip Forte did not respond to K3 Capital's messages after the incident and also does not intend to handle the issue with Euler. Therefore, they will seek the best lawyers in the United States to sue Elixir, and Simeon has also started to collect Philip's personal information.

This article claims that Elixir is a scam! K3 Capital angrily accuses deUSD of misappropriating funds and openly lying, threatening to send the founder to prison. First appeared in Chain News ABMedia.