Xerberus, a UK-based Web3 risk management and platform, recently released an investigative report on Ardana Labs, a failed stablecoin platform for the Cardano blockchain which at its peak attracted over $10 million in investments sometime in 2021.
According to the investigative report on Ardana, the project abruptly shuttered in November 2022, citing funding and project timeline uncertainties. While some attributed this to the broader challenges faced during the crypto winter of 2022, the investigation highlights several factors which point to extraneous reasons for its downfall.
In the report, Xerberus alleges that Ardana executives, including CEO Ryan Motovu, siphoned off 80% of the project's funds into a personal wallet, subsequently making poor crypto investments that resulted in approximately $4 million in losses.
Ardana gained prominence sometime in 2021, securing $10 million from investors, including venture capital firms CFund, Three Arrows Capital (3AC), and Ascensive Assets. The project's backers and successful fundraising efforts fueled optimism around its token, DANA.
Despite partnerships and pledges, Ardana never launched its stablecoin platform or bridge. The project was terminated in November 2022, supposedly due to funding difficulties exacerbated by the broader crypto market challenges. However, Xerberus' analysis suggests that questionable asset management practices played a more significant role.
Spending And Liquidation
Approximately $1.82 million of Ardana's funds were spent on development costs, including salaries. An identified wallet address showed payments that matched this amount.
Xerberus' analysis reveals that nearly $4 million of the Target Wallet's token balance was lost due to poor trades. These losses were incurred on decentralized exchanges like PancakeSwap, Uniswap, SushiSwap, and GMX. Xerberus noted changes in Ardana's on-chain behavior in March 2022, with assets being liquidated through DEXs. This continued until November 2022, aligning with the project's closure announcement. These liquidated funds still reside in the treasury wallet.