The Stargate Foundation advised the DAO not to reissue STG tokens, and the FTX liquidator may seek compensation
On March 13, Stargate, a cross-chain liquidity agreement based on LayerZero, tweeted that the Stargate Foundation recommended DAO not to reissue STG tokens. After the bankruptcy of FTX last year, the FTX/Alameda wallet suffered from key leakage or internal problems, and was attacked by hackers and lost about $500 million. The FTX liquidator will eventually transfer all assets to the new wallet, and the key will not be leaked to hackers. Stargate DAO believes that the key of the wallet is 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.
Interpretation of this information:
On March 13th, Stargate, a cross-chain liquidity agreement based on LayerZero, tweeted a recommendation from the Stargate Foundation to not reissue STG tokens. This advice comes after FTX, a cryptocurrency exchange, experienced a loss of $500 million due to a hack last year. The FTX/Alameda wallet, where the hack occurred, was compromised due to key leakage or internal problems. The liquidator for FTX will be transferring all assets to a new wallet to prevent future attacks from hackers.
The Stargate DAO believes that the key to the wallet may be leaked and shared between FTX liquidator/Alameda and hackers. Therefore, they recommend reissuing STG tokens to transfer the funds out of the wallet. However, the Stargate Foundation advises against reissuing the tokens, as it may not solve the underlying problem of key security. Instead, they suggest finding a more secure solution to storing the funds.
This situation highlights the importance of security and trust in the cryptocurrency industry. If a wallet’s key can be leaked, it exposes all the funds stored in that wallet to potential attacks from hackers. The loss of $500 million is not only a significant financial hit for FTX but also damages trust in the cryptocurrency industry. It underscores the need for better security measures to prevent future attacks and the importance of transparency in the handling of funds.
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