- Foundation’s lawyer to represent all affected staking providers and leasers in upcoming legal proceedings.
- Incident highlights broader legal challenges in China’s Web3 space, with similar issues affecting Multichain users.
The Filecoin Foundation, which promotes the development of the Filecoin Web3 storage protocol, has initiated a legal investigation following an incident involving the Filecoin Liquid Staking (STFIL) team in China.
The foundation has retained legal counsel in China to investigate the detention of STFIL team members, according to a statement from Danny O’Brien, a senior fellow at the foundation, shared via social media on April 13.
This legal inquiry was triggered after a developer wallet linked to the STFIL protocol executed several unauthorized transactions, moving $23 million in Filecoin tokens to an address with an unidentified owner.
Read more: ETF boom: China’s move to launch XRP, Ethereum and Bitcoin funds sends prices soaring.
Subsequently, the STFIL team reported that some of its core technical members were detained by local Chinese police at the time these transactions were made.
O’Brien reported that the foundation’s attorney is diligently examining the case, and they are fairly certain that the STFIL team members are being held by the police. However, it is currently unknown whether the police have also seized the missing funds.
In the meantime, we’re looking into a separate plan for this lawyer to be available to represent impacted SPs and token leasers as well. We’ll share more info on this arrangement after we hammer out the details. 3/n
— Danny O'Brien🤖 (@mala) April 13, 2024
Further details are expected to be clarified within a week, and the foundation’s lawyer is set to represent all impacted staking providers and leasers in forthcoming legal actions.
This incident highlights ongoing legal challenges faced by Web3 protocols in China. Similar issues have impacted users of other platforms like Multichain, where over $1.5 billion remains frozen following the arrest of its development team.
Additionally, Fantom Protocol declared bankruptcy in March as part of its efforts to recover funds lost in the Multichain debacle, indicating a lengthy and complex legal road ahead for stakeholders.
