Due to concerns raised by FTX liquidators, the Stargate Foundation has advised its Decentralized Autonomous Organization (DAO) against reissuing Stargate’s native Stargate Finance (STG) token. The liquidators said they believed such a move would breach the automatic stay and could lead to legal consequences.
In March 2022, former cryptocurrency trading firm Alameda Research purchased the entire STG auction for $25 million. However, in November of the same year, FTX declared bankruptcy, and the wallets of FTX and Alameda were subsequently stolen, resulting in a loss of approximately $500 million. The liquidator eventually transfers all assets to the new wallet.
In light of these events, Stargate DAO proposes to reissue STG tokens to transfer funds from potentially compromised wallets to more secure wallets. However, FTX liquidators rejected the proposal.
The Stargate DAO insisted that the liquidator’s concerns were unfounded and that reissuing STG tokens would not violate the automatic stay. Stargate tweeted: “Any interaction between a foundation and a liquidator demonstrates that they have a firm grasp of the reality of smart contracts, how contracts work, or how they will interact with contracts to secure funds.”
Despite the efforts of exchanges, protocols, and external parties to ensure the safety of funds, the Foundation stood by its recommendation not to reissue STG tokens due to the opinion of FTX liquidators.
