Coinbase's investment in stablecoin bank Kontigo triggers Terra-style panic

According to a report by Decrypt, the stablecoin startup bank Kontigo has raised $20 million in seed funding from institutions including Coinbase Ventures, with CEO Castillo claiming it to be the fastest-growing stablecoin bank in the world.

However, the platform's promise of a 10% USDC yield and a no-KYC account opening mechanism has immediately raised concerns in the community. Critics point out that even when combined with DeFi protocol Morpho, U.S. Treasury bonds, and Coinbase custody services, the conventional market yield is only 3-7%. The source of the 10% return is unclear, reminiscent of the collapse of Terra's Anchor.

Additionally, some users have reported that USDC transfers have not arrived for hours. The lack of KYC protective measures has also raised concerns about money laundering and fraud risks. Critics warn that rapid expansion under unclear regulations and opaque yield mechanisms could lead to a repeat of past cryptocurrency failures.