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When EtherFi co-founder and CEO Mike Silagadze called KAST a “Kasthole scammer” in a post that quickly went viral, he wasn’t just throwing shade at a competitor. He was pulling back the curtain on a Terms of Service document that effectively tells users: the moment you deposit stablecoins, that money belongs to KAST.
The feud, which kicked off around July 5, 2026, has snowballed into one of the more revealing public disputes in crypto this year. It centers on a deceptively simple question: when you load money onto a crypto card, do you still own it?
What KAST’s Terms of Service actually say
KAST, a neobank that processes transactions in stablecoins, structures its deposits in a way that most users probably didn’t expect. Its Terms of Service classify user deposits not as custodied funds, but as sales to the company. In English: when you top up your KAST card, the platform treats that transaction like you sold your stablecoins to KAST in exchange for a spending balance.
KAST updated its ToS on July 7, 2026, two days after the Silagadze feud went public. The revised terms do reaffirm that users can redeem unspent balances. But the fundamental framing didn’t change. Deposits are still treated as sales.
KAST’s terms limit the company’s total liability to users at $500. For a platform handling potentially significant stablecoin balances, that number is startlingly small.
This structure allows KAST to effectively use deposited stablecoins as part of its corporate treasury. The company can then generate yield on those assets, a business model that’s lucrative for the platform but raises obvious questions about what happens if things go sideways.
The points program pivot that made things worse
The ToS drama alone might have been manageable. But KAST was already dealing with a separate credibility problem: its points rewards program.
Users had expected a one-to-one conversion from KAST points to tokens, based on earlier communications from the company. Instead, KAST pivoted toward tokenized equity. That’s a fundamentally different proposition. One is a liquid crypto token you can trade. The other is a stake in the company itself, likely with restrictions on liquidity and transferability.
KAST isn’t some scrappy startup operating out of a WeWork. The company raised $80 million in a Series A funding round in March 2026, reaching a valuation of $600 million. It was projecting a $100 million annual revenue run rate.
The custodial vs. non-custodial fault line
Silagadze’s attack wasn’t purely altruistic. EtherFi operates a non-custodial crypto card product, making it a direct competitor to KAST. His ETHFI token was trading around $0.43 during the feud period.
The dispute highlights a tension in the crypto card and payments space. Custodial platforms like KAST offer convenience and a polished user experience. Non-custodial alternatives like EtherFi’s product prioritize user sovereignty, meaning you retain ownership and control of your assets until the moment of a transaction.
The problem for KAST isn’t that it chose the custodial model. The problem is that the specific terms, classifying deposits as sales and capping liability at $500, represent an unusually aggressive version of that model.
What this means for investors and users
For anyone currently holding a balance on KAST, the updated July 7 terms do preserve redemption rights for unspent balances. But understanding that your deposit is legally structured as a sale to the company changes the risk calculus significantly.
The $500 liability cap is particularly worth noting. In a worst-case scenario, whether that’s insolvency, a hack, or some other operational failure, users could theoretically be limited to recovering just $500 regardless of their actual balance.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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