This is an archive of our post on Aave governance forum. Read the full thread here.

We researched EURS back in March 2023. In our prior investigation, we highlighted several key risks and concerns. We appreciate the opportunity to revisit our findings and provide an updated perspective:

• Regulatory Compliance: An examination of the MFSA (Malta Financial Services Authority) Financial Services Register confirms that STSS (MALTA) LIMITED is duly authorized and that its Whitepaper received approval on June 12, 2023. Under the Maltese Virtual Financial Assets (VFA) Act, “any person wishing to issue a VFA to the public in or from within Malta is required to draw up a whitepaper which includes the information listed in the First Schedule of the VFA Act and register said whitepaper with the MFSA”. As it currently stands, EURS has been issued in adherence to the VFA regulatory framework. However, we would appreciate further insights from Stasis regarding the eventual classification of EURS as e-money tokens under the EU-wide Markets in Crypto-Assets Regulation (MiCAR) and their plans to secure the appropriate licensing status under the mentioned legal act.

• Corporate Structure: It has come to our attention that STSS Limited, based in the Isle of Man, remains listed as the owner of the https://stasis.net/ website, whereas STSS (MALTA) LIMITED holds the VFA authorization in Malta. This discrepancy raises questions about potential risks associated with regulatory oversight and accountability. We would appreciate a detailed explanation concerning the corporate architecture, the interrelationships between these entities, and the specific regulatory status applicable to each. Additionally, we are interested in learning about any enhancements made to Stasis’s corporate structure and governance to mitigate risks related to the use of third-party service providers, such as improved transparency, clear lines of responsibility, and robust contingency plans.

• Asset Backing Composition: In March 2023, significant changes were made to Stasis’ bond portfolio; however, no information has been disclosed on realized mark-to-market losses. Could you please provide details on the current composition of the assets backing EURS, and any plans for further adjustments to the collateral strategy?

• Transparency and Communication: In our previous interactions with Stasis, responses to our queries were limited. We hope that Stasis is now more open to addressing the transparency concerns highlighted in our report. Specifically, we would appreciate regular, detailed updates on the points mentioned above, as well as any other material changes to EURS operations or governance.

Addressing these issues is important for Stasis to be considered for the suggested parameter changes, given the existence of other euro stablecoins that operate with sufficient regulatory clarity. In observing the regulatory approaches of other stablecoin initiatives within the European Union, many opt to become regulated as Electronic Money Institutions (EMI). In light of this prevalent trend, we are interested in understanding your strategic vision for conducting your operations under particular regulatory framework.

We kindly ask Stasis to provide more information on how these aspects have evolved since our initial research, as this will help inform our assessment and recommendations going forward.