SolChicks Allegedly Lost $20 Million of Treasury Funds in the UST Collapse

Apparently, the team has decided to keep these multimillion-dollar losses hidden from their community.

Nov 18, 2022
by Akira Ming
SolChicks Allegedly Lost $20 Million of Treasury Funds in the UST Collapse
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SolChicks lost $20 million of treasury funds, according to leaked messages

ZachXBT, a well-known crypto scam detective, has shared screenshots of alleged conversations between SolChicks CEO William Wu and COO Lewis Grafton. 

According to Zach, these messages revealed how SolChicks lost up to $20 million of treasury funds due to the UST implosion in May. The disturbing part, however, is that the company has decided to keep these multimillion-dollar losses a secret from their community. 

In the first screenshot, dated May 10th, COO Lewis enquired CEO William about their exposure to Anchor. As things started to get worse, he approached William again to see if he had taken anything out of Anchor, to which the CEO replied, "No." 

Coming to the second screenshot, on May 12th, the COO asked William again if he had any strategy indeed for UST. To his horror, the SolChicks CEO didn't even have a plan, as he was not looking to perform "day trading". 

That was the last straw for Lewis, as the COO fired back, saying that this isn't about day trading, but instead, "it's about having the majority of treasury allocated to a single ponzi scheme that is mid collapse." UST eventually fell more than 49% to close at $0.38 that day.

Nonetheless, ZachXBT reached out to Lewis regarding the leaked messages. According to the COO, the team has already discussed this issue with their largest private holders but decided "not to make a public announcement." 

Lewis also claimed that the company has more than 5 years of runway. However, this doesn't seem to be true, as Zach later revealed that this went against an internal email about mass layoffs in the firm. 

How did SolChicks react to this expos√©? 

Shortly after Zach posted his controversial findings on Twitter, Catheon Gaming - a Web3 gaming platform launched by SolChicks, quickly issued an official statement. 

According to Catheon, messages published by ZachXBT are "out of context" and "cause real harm," though the company eventually admits that they did allocate part of the treasury to UST. 

Even so, the firm insists that the allocation was done in a diversified manner, adding that it has no obligation to share confidential financial info since Catheon is not a public company or a DAO. 

The platform also claims that it has restructured its business. Currently, it does not manage client funds, has no debt, and does not day trade with its capital. 

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