• The Stargate Foundation, in agreement with FTX liquidators, has advised the DAO against reissuing the STG token due to potential legal repercussions and risks to its safety.
• In March 2022, Alameda Research purchased the entire STG auction for $25 million. However, in November of the same year, FTX declared bankruptcy and its wallets were hacked for roughly $500 million.
• The liquidators have proposed that the funds remain in a potentially compromised wallet as opposed to reissuing the STG token which could violate an automatic stay.
Stargate Foundation Advises DAO Against Reissuing STG Tokens
The Stargate Foundation has advised their decentralized autonomous organization (DAO) against reissuing Stargate Finance’s native token, STG. This comes in response to concerns raised by FTX liquidators who believe such a move could put their safety at risk and violate an automatic stay.
Alameda Research Purchases Entire Auction for $25 Million
In March 2022, Alameda Research purchased the entire STG auction for a total of $25 million. Later that year in November however, FTX declared bankruptcy following which its wallets were hacked for approximately $500 million worth of assets and funds.
FTX Liquidators Reject Proposal to Reissue Token
The liquidators have transferred all assets to new wallets and proposed that these funds remain there as opposed to reissuing the STG token. They believe this would create legal repercussions and violate an automatic stay – a court order that automatically stops certain actions from being taken by creditors or debtors during bankruptcy proceedings.
Stargate Maintains Position Despite Liquidators’ Concerns
Stargate DAO maintains that these concerns are unfounded and reissuing the token would not result in any violations or consequences; however, their tweet indicates they do not agree with how well-informed or knowledgeable the liquidators are about smart contracts or how they will interact with them: “Nothing…indicates that they have a firm grasp of [smart contracts]”
It remains unclear whether or not issuing the STG tokens is ultimately safe; however, it is clear that both parties disagree on what should be done with those funds going forward. The decision now rests with those running Stargate DAO who must weigh these risks against potential rewards before taking any further action.