Tascha Punyaneramitdee, the co-founder and CEO of Alpha Venture DAO, published the third open letter to Iron Bank, the protocol-to-protocol lending platform.
Third Open Letter to Iron Bank pic.twitter.com/1S8ZDNB84k
— Alpha Homora (🪄, 🃏) (@Alpha_HomoraV2) March 5, 2023
Iron Bank paused Alpha Homora’s lending account on March 1. The pause came in response to Alpha Homora’s $30 million bad debt that arose after a malicious exploit in February 2021.
On March 3, Iron Bank urged Alpha Homora to “take ownership” of its bad debt amid a tussle between the two liquidity platforms. Iron Bank said they have requested Alpha Homora to provide a solution for rebalancing its bad debt multiple times, but have not received a response. Iron Bank claims that Alpha Homora prefers private discussions rather than presenting a written solution in a transparent manner.
"Seizing users’ funds is not the solution and should not be a solution to any problem because it is as if a custodian seizes money held in its trust.", Punyaneramitdee said in the letter. "Iron Bank, to our shock, has revealed itself to have centralized control over the network, and therefore it is acting similarly to a centralized lending platform."
"We will continue to pursue legal action against this unethical wrongdoing and ensure what Iron Bank has done will not be the new, lower standard of DeFi." Punyaneramitdee added.
As per the letter, Alpha Venture presents proposed solutions to Iron Bank and wishes to discuss them further with Iron Bank to arrive at a final resolution:
- Iron Bank returns customers’ funds that are not on Ethereum.
- Out of the ~$41M on Ethereum, Iron Bank is to transfer ~$11M to users. ~$11M represents the amount of users’ deposits net bad debt and not including interest accrued.
- For the remaining ~$30M, Alpha Venture will share details to the community on how it will be handled within 1 week after Iron Bank agrees to the above solutions.
Iron Bank has not responsed to the latest open letter yet.
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