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The core technical team behind the Filecoin-based STFIL protocol said that they are under investigation by Chinese authorities.
Over the past couple of days, there have been unforeseen updates to the protocol, along with funds transfers to different addresses.
Mysterious Token Transfers and Upgrades
The news came out in a public post by STFIL Protocol on X, revealing that they believe the STFIL core technical team is under investigation by local Chinese police. They mentioned that lawyers have been hired to understand the current situation and provide legal assistance to detained individuals.
We believe that the STFIL core technical team is under investigation by local Chinese police, and we understand lawyers have been hired to understand the current situation and provide legal assistance to the individuals under detention.
Last week, when the core technical team…
— STFIL Protocol 🏔️ (@stfil_io) April 9, 2024
Last week, while the core technical team was detained, FIL tokens on the STFIL platform were mysteriously transferred to an external address, raising red flags among investors and stakeholders.
The transferred funds were tracked to an external address, which the STFIL Protocol has made public in their post. This address currently holds 2.5 million FIL tokens worth approximately $22 million. The post also includes the Protocol’s original address for comparison.
Adding to the situation, there have been reports of abnormal and unscheduled upgrades to the protocol in the past couple of days.
In response to these developments, the STFIL team is actively seeking assistance from the community to track the unknown address and explore measures to safeguard stakeholders’ interests.
Filecoin Mining Pyramid Scheme Case
Meanwhile, In August last year, a Chinese court started proceedings for a case involving a Chinese Filecoin mining company and its four executives, who are accused of organizing an $83.3 million pyramid scheme.
According to local media, Shenzhen Shikongyun Technology and its four executives, including the company’s founder surnamed Lai, are on trial for charges of organizing and leading activities related to a pyramid scheme.
According to prosecutors, the defendants allegedly lured customers by claiming to mine FIL coins on the company’s platform. They claimed that individuals had to meet certain qualifications to participate, such as paying fees for purchasing or leasing mining equipment.
STFIL, a liquid staking protocol built on Filecoin, enables users to earn staking rewards on their FIL tokens while retaining their ability to use them within decentralized finance (DeFi). In exchange for their deposits, users receive liquid staking tokens (LSTs).
According to data from DefiLlama, the platform’s total value locked stands at around $40 million, marking a nearly 60% decrease since the beginning of April.
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