Crypto Updates

Stargate foundation advises DAO against reissuing $STG tokens

Stargate foundation advises DAO against reissuing $STG tokens

Stargate Foundation has advised the decentralized autonomous organization (DAO) against re-issuing Stargate’s native token ($STG) as a result of concerns raised by FTX liquidators. The liquidators have expressed their belief that such a move would violate the automatic stay and could result in legal repercussions.

In March 2022, Alameda, 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/Alameda wallets were hacked for roughly $500 million. The liquidators eventually transferred all assets to new wallets.

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In light of these events, Stargate DAO has proposed the re-issuance of the $STG token to move the funds from the potentially compromised wallet to a safer one. However, the FTX liquidators have rejected this proposal.

Stargate DAO maintains that the liquidators’ concerns are unfounded and that the re-issuance of the $STG token would not violate the automatic stay. Stargate tweeted that “nothing in any interaction the foundation has had with the liquidators indicates that they have a firm grasp of the reality of the smart contracts, how the contracts work, or how they will interact with the contract to secure the funds”.

Despite the efforts of exchanges, protocols, and external parties to ensure the security of funds, the foundation is standing by its recommendation against the re-issuance of the STG token due to the current opinion of FTX liquidators.