Chinese police investigate developers of Filecoin’s second-largest defi protocol STFIL

Liquid staking protocol STFIL is allegedly under investigation by Chinese police amid concerning fund transfers and protocol upgrades.

The STFIL team revealed in an X post on Apr. 9 that the core team members of the protocol are under investigation by local Chinese police. Although specific details surrounding the investigation were not disclosed, STFIL noted that legal representation has been engaged to manage the situation and support the individuals implicated.

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

You might also like: SEC categorizes Filecoin as security; Grayscale faces regulatory challenge

STFIL pointed out that during the period of the team’s detention last week, funds in Filecoin (FIL) on the STFIL platform were transferred to an unknown external address, with the protocol undergoing “abnormal, unscheduled upgrades.” As of press time, the recipient of the transferred funds holds over 2.5 million FIL (worth approximately $23.3 million).

“Upon learning the above information, the team is actively seeking assistance. We hope that the community can help track this unknown address and discuss ways to protect the interests of stakeholders.”

The STFIL team

STFIL ranks as the second-largest protocol in the Filecoin ecosystem by total value locked. Based on DefiLlama data, it trails only GLIF, with an allocation of nearly $40 million in cryptocurrency. Introduced in 2023, STFIL pioneered Filecoin’s liquid staking protocol, offering FIL token holders the opportunity to earn returns through liquid staking.

Read more: Solana, Filecoin unite to boost decentralized data storage

Source