Stargate Foundation advised against reissuing STG token
Rebeca Moen Mar 15, 2023 08:53
Stargate Foundation has been advised against reissuing the STG token by its DAO due to concerns raised by FTX liquidators following the bankruptcy of FTX and Alameda Research's wallets being hacked for roughly $500 million.
In March 2022, Alameda Research, the former cryptocurrency trading firm, purchased the entire STG auction for $25 million. However, in November of the same year, FTX declared bankruptcy, following which FTX and Alameda's wallets were hacked for roughly $500 million. The liquidators eventually transferred all assets to new wallets.
In light of these events, Stargate Foundation has proposed reissuing the STG token to move the funds from the potentially compromised wallet to a safer one. However, FTX liquidators have rejected this proposal citing concerns that such a move would violate the automatic stay and could result in legal repercussions.
Stargate DAO maintains that the liquidators' concerns are unfounded and that reissuing the STG token would not violate the automatic stay. Despite the efforts of exchanges, protocols, and external parties to ensure the security of funds, the foundation is standing by its recommendation against reissuing the STG token due to the opinion of FTX liquidators.
Stargate Foundation is a decentralized autonomous organization (DAO) focused on developing decentralized technologies and solutions. It is built on a blockchain-based platform and is run by a community of individuals who hold STG tokens.
The STG token is the native token of Stargate Finance, a decentralized finance (DeFi) platform that allows users to earn interest and other rewards by providing liquidity to various protocols. The token is used to facilitate transactions on the Stargate Finance platform and is also used as a governance token for voting on proposals and decisions related to the platform's development and operations.
The bankruptcy of FTX and the subsequent hack of its and Alameda's wallets have raised concerns about the security of the STG tokens held by the liquidators. In response, Stargate Foundation proposed reissuing the tokens to move the funds to a safer wallet.
However, FTX liquidators have expressed concerns that such a move could violate the automatic stay and result in legal repercussions. The automatic stay is a legal injunction that prevents creditors from collecting on debts or seizing assets of a debtor who has filed for bankruptcy.
Stargate DAO maintains that reissuing the tokens would not violate the automatic stay as the tokens are not considered assets of the debtor but rather a digital asset governed by smart contracts. The DAO argues that the liquidators' concerns stem from a lack of understanding of how smart contracts work and how they interact with the STG token to secure the funds.
Despite this disagreement, Stargate Foundation is standing by its recommendation against reissuing the STG token, citing the opinion of FTX liquidators as a significant factor in its decision. The foundation recognizes the importance of maintaining trust and confidence in the Stargate Finance platform and is taking all necessary measures to ensure the security of its users' funds.
In conclusion, the Stargate Foundation's recommendation against reissuing the STG token highlights the importance of transparency and communication in the DeFi space. The incident also underscores the need for clear guidelines and regulations to ensure the security of decentralized finance platforms and protect investors' interests.
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