On Tuesday, STFIL, a liquid staking platform for Filecoin (FIL), announced that its team is allegedly under investigation by local Chinese police. The platform’s FIL tokens had been moved to an unknown address outside the team’s control.
The incident, now being investigated by the Filecoin Foundation, raised many concerns as investors wonder about the fate of their staked FIL tokens.
Is Chinese Police Behind The Missing Tokens?
The STFIL Protocol announced on X their suspicion of being under investigation by local Chinese police. According to the post, the protocol’s team believes the core technical team is being investigated after they were detained last week.
We believe that the STFIL core technical team is under investigation by local Chinese police, and we understand lawyers have been hired to understand the current situation and provide legal assistance to the individuals under detention.
Last week, when the core technical team…
— STFIL Protocol ????️ (@stfil_io) April 9, 2024
During the detention, the FIL tokens staked in the STFIL platform were allegedly moved without the team’s authorization to an “unknown, external address.” The mysterious address now holds 2.56 million FIL, worth around $23 million.
On April 7, a member of FilOZ, Filecoin’s independent public goods developers’ team, revealed that the community had contacted them over “STFIL Filecoin Virtual Machine (FVM) Smart contract activities.”
The developer alerted users of the suspicious activity in the staking protocol. The FilOZ member warned of an unknown upgrade scheduled for the contract, which “could be concerning.” Additionally, she urged lenders to consider withdrawing their tokens before the upgrade.
STFIL confirmed the reports on their X post. The team informed that the protocol had undergone several “abnormal, unscheduled upgrades” during the past few days.
Moreover, the protocol sought the community’s assistance to monitor the unknown address and “discuss ways to protect” the stakeholders’ interests.
The announcement has raised concerns, as lenders now worry about their tokens and ways to retrieve them. Many Filecoin users are questioning the suspicious activity, wondering why the protocol’s team didn’t inform sooner of their detainment or the unauthorized activity.
How can the police just take over the funds just like that.
— Benny Chong (@iambennychong) April 9, 2024
Filecoin Foundation Steps In
The STFIL lenders asked the Filecoin Foundation to step in. Many considered that the incident’s gravity required the Filecoin team’s assistance to resolve the issue and help FIL investors.
At first, the organization approached the situation by seemingly distancing themselves from the project. It first announced on an X post a “reshare of an important message” from an “independent third-party operating in the Filecoin ecosystem.”
Users quickly showed their disappointment with the foundation’s stance. The community highlighted STFIL’s importance in the Filecoin ecosystem. In the replies, several FIL users claimed to have staked their savings in the staking platform.
UPDATE: Filecoin Foundation is tracking and evaluating the situation involving @stFIL_io. Our priority as an org is to support the overall health and success of the network and all of its participants.
In light of this evolving situation, the network upgrade coordinators have…
— Filecoin Foundation (@FilFoundation) April 9, 2024
In a later update, the organization informed that they are now tracking and evaluating the situation. As a result, the coordinators postponed the scheduled nv22 network upgrade to April 24.
In response to the critics, the Filecoin Foundation affirmed that supporting the “overall health and syces of the network and all of its participants” remains its priority. At the time of this writing, the stolen tokens remain in the unauthorized address, and no recovery plan has been unveiled.
Filecoin is trading at $9.12 in the 3-day chart. Source: FILUSDT on Tradingview
Featured Image from Unsplash.com, Chart from TradingView.com
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Author: Rubmar Garcia
