Fraud is very obvious. Which part of it is simply “gross negligence”?

When you pretend to be ignorant about parts of a crime that you haven't been proved to be involved with (although you built your entire business around the crime.) Between being charged with malice or stupidity, the wise man chooses stupidity.

Investing client cash in a scheme that promises to pay 20% yields with an explicitly ponzi like setup seems like gross negligence.

Terra and the Anchor protocol should have appeared fraudulent to any expert from the very start.

They drank the kool-aid and actually thought that the risk of a depeg was very low, or that they would be able to pull out the money in time?

Hanlon's razor.

I don't think Hanlon's razor is safe to apply in the finacial/cryptocurrency space.

Then you haven't spent enough time in the cryptocurrency space.

That’s possible, though I would expect more due diligence from a (unregulated quasi) bank…