KAST Terms of Service Under Fire After Public Feud With EtherFi CEO Spirals Beyond Card Fees

A five-day Twitter exchange between EETH$1,751.28▼2.26%.fi CEO Mike Silagadze and KAST CEO Raagulan Pathy started as a card-fee comparison and ended with community scrutiny of KAST’s terms of service and deposit-handling practices — pulling a fast-growing stablecoin neobank into an unwelcome spotlight.

The feud, first reported by The Defiant, played out publicly on X over five days. What began as a pointed debate over which crypto card offered lower fees escalated steadily, and by the time it burned out the conversation had moved well beyond interchange rates and annual costs. It landed on a far more sensitive question: what happens to customer deposits sitting inside KAST, and whether the company’s own terms of service give users anything resembling adequate protection.

KAST markets itself as a stablecoin-powered card and neobank. The company raised $80 million in a Series A round in March, according to The Defiant’s coverage — a figure that shows how much capital is chasing the stablecoin-card intersection right now. ether.fi, the other party in the dispute, is a competing DeFi card product. Silagadze fired the opening shot on card fees, and the exchange quickly took on the texture of a competitive turf war: two CEOs with overlapping customer bases trading blows in front of the very audience they are trying to win over.

That competitive dynamic matters. When a CEO publicly attacks a rival’s fee structure, the incentive is obvious — steer depositors toward your own product. Silagadze has a clear commercial interest in making KAST’s fees look bad. Pathy has an equally clear interest in defending them. But the escalation past fees into terms-of-service territory is what gave the spat staying power. Once the community started reading KAST’s ToS — apparently prompted by the back-and-forth — the criticism took on a life of its own, independent of either CEO’s agenda.

KAST’s terms of service became a focal point of community criticism following the public exchange, per The Defiant’s reporting. The core concern centred on how KAST treats customer deposits — a perennial flashpoint for centralised crypto products that promise the convenience of a bank without always delivering the same regulatory guardrails. Which specific clauses drew the most fire is not detailed in the available reporting, but the question of deposit handling is one the sector has never fully answered to users’ satisfaction.

At least one user went public with a concrete grievance. X user @waleswoosh posted that they had switched from KAST to ether.fi and had accumulated KAST loyalty points that were “supposed to be converted into tokens” but were not redeemed. The post referenced points “worth around” an unspecified amount. The claim is unverified — a single-user complaint, not an established pattern. But in the context of a ToS debate already inflamed by a CEO-level feud, even one such report carries weight, particularly when the company in question is holding customer deposits in stablecoin form.

The loyalty-point complaint touches a nerve that crypto natives know well. Points-to-token conversion programs have become a popular user-acquisition mechanism across DeFi and CeFi products alike, but they exist in a regulatory grey zone. When points fail to convert as expected, users are left holding something with ambiguous value and no clear recourse. Whether KAST’s program is delayed, cancelled, or simply slow-moving is not confirmed by the available reporting. The @waleswoosh post, though, signals that at least some users are losing patience.

Stablecoin stakes

Zoom out and the backdrop gets starker. UUSDT$0.9993▼0.01% carries a market capitalisation of $184.24 billion; UUSDC$0.9998▼0.02% sits at $73.25 billion. Those two assets are the infrastructure layer for virtually every stablecoin-powered card and neobank in operation. The total crypto market cap currently stands at $2,270.93 billion, down 1.24% over the past 24 hours, with the Fear & Greed Index reading 20 out of 100 — Extreme Fear. In a market environment that tense, trust is fragile. Public disputes over deposit practices land harder than they would mid-bull run, when users are less inclined to read the fine print.

The broader pattern is familiar to anyone who watched the CeFi collapses of 2022. Centralised crypto products that hold customer deposits operate with less transparency than their DeFi counterparts, and their terms of service are often the only contractual document governing the relationship. When those terms come under community scrutiny — especially in the wake of a high-profile executive feud — the questions compound fast. Users want to know where their money is, what it’s doing, and what happens if the company’s incentives shift.

What remains unresolved

What remains unresolved is whether KAST has substantively addressed the ToS concerns raised in the wake of the feud, or whether the company has limited its public response to the card-fee comparison that started it all. The Defiant’s reporting documents the escalation and the community reaction, but the available source material does not include a detailed KAST defence of the specific deposit-handling clauses that drew fire. For users holding deposits or accumulating loyalty points inside the platform, that silence — or partial silence — is itself part of the story.

The @waleswoosh complaint, meanwhile, remains a single data point. Whether other KAST users have experienced similar issues with loyalty-point conversions is not established by the available reporting. But the post has visibility, and in the crypto community a single credible-sounding complaint can quickly become a test case.

The feud between Silagadze and Pathy may have started over basis points. The questions it surfaced about deposit practices and user protections in crypto neobanks are the ones that will outlast the Twitter thread. What to watch: whether KAST issues a formal response addressing the ToS concerns specifically — not just the fee comparison — and whether the loyalty-point conversion program resumes or clarifies its timeline.