SmartStake, the main validator in the Cosmos ecosystem, has announced that it will shut down its node after the personal profits of secretive foundation founder Tor Bair were revealed. The validator cited "complex/stressful validator operations...cost/effort of validator operations recent events" as the reason for shutting down their services. Another Cosmos validator, NotionalDAO, echoed SmartStake CEO Jacob Gadikian’s statement, confirming that “NotionalDAO will not be launching its nodes again in solidarity with SmartStake.”
On January 27, the allegations against Bair were disclosed through the foundation’s governance forum. Guy Zyskind, founder of Secret Labs, issued a statement publicly accusing him.
Zyskind revealed that “the Secret Foundation sold a large amount of USD’s worth of SCRT.” Additionally, “Tor cashed out a significant portion of these proceeds…as dividends.” About $4 million.
The ultimate plan proposed by Zyskind is to dismantle the Secret Foundation by returning the shares to the community and reforming the new foundation under new leadership. The new organization will "maintain transparent and audited activities, it will submit an annual funding request to the chain with clear budgets, milestones and requirements."
Bair also announced on the same governance forum that the withdrawal was only part of his vested tokens. The Secret Foundation founder said he will start taking a salary in 2021 and award "a portion of my tokens" by December.
He went on to confirm that he conducted “over-the-counter transactions of SCRT tokens,” converting the tokens to U.S. dollars and holding the stablecoin with the foundation, which he uses to pay his dividends. He further revealed that he owns 375,000 SCRT of vested tokens and received $2.625 million in dividends, claiming this.
Bair seemed to reveal through his in-ring hat that "the time for change has come," but he "has expressed on multiple occasions, both privately and publicly, my desire to be a part of change." Debate continued in the comments and on Twitter as to whether the community believed there was wrongdoing, or whether people were more concerned that Bair appeared to be selling the top for more than $7.
At press time, Secret Networks, SCRT is trading at $0.80, nearly 90% less than Bair’s selling price.
