One of the main validators of the Secret Network blockchain layer 1 privacy smart contract has announced that it will stop providing nodes and support for the network..
On January 29, the large Smart Stake validator announced that it would be shutting down its Secret Network validator nodes on February 21.
Smart Stake cited “complex/stressful validation operations, cost/effort of validation operations, and recent events” as reasons for withdrawing its services..
Smart Stake is a validator and staking service provider that supports various networksincluding Crypto.com, Polygon, Cosmos, and until recently, the Secret Network.
PSA for @SecretNetwork delegates of Smart Stake:
Smart Stake will be shutting down its Secret validator on 21st Feb. Please redelegate to another validator.
Reasons: 1) Complex/stressful validator operations on $SCRT 2) Cost/effort of validator ops 3) recent events
—Smart Stake (@SmartStake) January 29, 2023
Public announcement to Smart Stake @SecretNetwork delegates: Smart Stake will close its Secret validator on February 21st. Please re-delegate to another validator. Reasons: 1) Complex/stressful validator operations in $SCRT 2) Cost/effort of validator operations 3) Recent events.
The move comes amid revelations from Secret Labs founder Guy Zyskind about the financial transparency of the Secret Foundation..
On January 28, Zyskind went public with allegations that the foundation and its founder and CEO Tor Bair “sold a substantial amount of USD worth of SCRT” – the Secret Foundation’s native token – in late 2021..
“Tor collected a significant portion of these revenues,” he alleged..
Zyskind also mentioned a $4 million inflow for the foundation in its Q4 2021 report, but did not mention the withdrawal..
“This action was not disclosed in any financial report provided to the community by the Foundation, which was presented by Tor as a non-profit organization on several occasions.”
Looking forward to resuming writing math proofs and bad code after all the @SecretNetwork drama
—Guy Zyskind (@GuyZys) January 29, 2023
I hope to get back to writing math proofs and bad code soon after all the @SecretNetwork drama.
Bair, however, offered his version of events in the secret government forum that same day.. He claimed that the withdrawals were part of the portion of tokens purchased from him.
“Instead of paying for my purchased tokens in December 2021, I converted my share of purchased tokens to USD at the OTC price and Secret Foundation distributed these funds as a dividend.”
He added that “this information is verifiable in our 2021 tax returns, which have been previously reviewed by Labsand I have previously disclosed this information to you.”
The ongoing internal leadership conflict has rocked at least one network validator vendor and the ecosystem community.
SCRT prices have remained immune to the internal turmoil, consolidating around the $0.80 level over the past week. However, the token is down 92% from its October 2021 all-time high of $10.38 and Bair’s asking price of $7.
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