The Stargate Foundation has advised to its decentralized autonomous organization (DAO) not to reissue the native Stargate Finance (STG) token due to concerns raised by FTX liquidators. The liquidators have voiced the belief that such a move would violate the automatic stay and could lead to legal repercussions.
In March 2022, Alameda Research, a former cryptocurrency trading company, bought out the entire STG auction for $25 million. However, in November of the same year, FTX filed for bankruptcy, after which the FTX and Alameda wallets were hacked for about USD 500 million. Finally, the liquidators transferred all the assets to new wallets.
In light of these developments, the Stargate DAO has proposed to reissue the STG token to move funds from the potentially compromised wallet to a more secure one. However, FTX liquidators have rejected this proposal.
The Stargate DAO maintains that the liquidators’ concerns are unfounded and that reissuing the STG token would not violate the automatic stay. star gate tweeted that “nothing in any interaction the foundation has had with the liquidators indicates that they have a firm understanding of the reality of smart contracts, how the contracts work, or how they will interact with the contract to secure the funds.”
Cliffs: The liquidators prefer to keep the tokens in an unsecure wallet with it’s keys very likely compromised by a hacker and despite not knowing how the contract functions expect to be able to race the hacker to the funds as they vest on a per block basis
—Stargate (@StargateFinance) March 10, 2023
The liquidators prefer to keep the tokens in an insecure wallet with their keys most likely compromised by a hacker and despite not knowing how the contract works they hope to be able to compete with the hacker for the funds as they are acquired on a per block basis.
Despite the efforts of exchanges, protocols and external parties to ensure the safety of the funds, the foundation maintains its recommendation against the reissuance of the STG token due to the opinion of FTX liquidators.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.