Stargate Foundation advises DAO not to reissue STG tokens, FTX liquidators may seek compensation

Stargate, a LayerZero-based cross-chain liquidity protocol, tweeted that the Stargate Foundation advised DAO not to reissue STG tokens. After FTX went bankrupt last year, the FTX/Alameda wallet had key leaks or internal problems, and was hacked and lost about $500 million. FTX liquidators will eventually transfer all assets to the new wallet, and the keys will not be revealed to the hackers. Stargate DAO believes that the key to the wallet is highly likely to be leaked and shared between FTX liquidator/Alameda and hackers, and proposes to reissue STG tokens to transfer these funds out of the wallet. FTX liquidators recently stated that if the funds were reissued and moved, it would violate the automatic stay clause and would actively seek compensation. After communicating with lawyers, the FTX liquidator believes that the tokens are already in its wallet and there is no need to take any action, and the tokens will be taken away in one go on March 17. The Stargate Foundation believes this is wrong, and there is no indication that the FTX liquidators have a deep understanding of what smart contracts actually are, how they work, and how to interact with them to keep funds safe. The Foundation believes that FTX liquidators would prefer to keep tokens in an unsecured wallet. LayerZero Labs stated that it expressly reserves the right to take any legal action and exercise any remedial measures at any time with regard to STG token ownership issues and any losses caused by the liquidator's irresponsibility in securing these funds. They reiterate that, assuming it succeeds and wins in court, the tokens will be transferred to the Stargate DAO at cost. Foresight News previously reported that on February 6, Stargate’s previous proposal to reissue STG was voted with 90% support, and will be implemented on March 15 according to the content of the proposal.