The Stargate Finance cross-chain project canceled its intention to re-issue the STG token because it did not want to get into legal trouble with the FTX exchange.
As reported by Kyptos, Stargate Finance at the beginning of February 2023 revealed that it would reissue all STGs because of concerns about 10% of the total supply being lost by Alameda Research, an investment fund related to FTX that went bankrupt. is no longer safe.
Specifically, the Stargate side is concerned that the FTX hack after the exchange’s bankruptcy has threatened the security of the assets held by the Alameda fund, including STG. Since 10% of the total supply is a large number, Stargate wants to prevent the risk of tokens being dumped on the market by re-issuing tokens and putting the other 10% into a separate wallet.
As originally planned, Stargate will capture STG balances on March 15, 2023, then airdrop new STG tokens to the respective users.
The project’s community, the Stargate DAO, then voted on the above proposal and approved it.
However, on March 11, the unit behind Stargate Finance, the Stargate Foundation, suddenly proposed to cancel the token issuance plan. The Stargate Foundation revealed that it had been contacted by the bankruptcy unit that took over the FTX exchange and said that any action affecting any of the exchange’s assets would violate US bankruptcy regulations. If the project still wants to reissue tokens, the bankruptcy unit will take legal action against Stargate.
tldr; The Stargate Foundation is recommending the DAO NOT re-issue the STG token. Story below
Alameda snipes STG auction and purchases 100% of the auction for $25m
— Stargate (@StargateFinance) March 10, 2023
The Stargate DAO community then had to conduct another vote, coming to a consensus that the intention to reissue STG should be canceled and continued to use the old token.
Many trading platforms including Binance and Bitfinex also announced the cancellation of STG token swaps for token holders on the exchange.
However, Coinbase exchange announced the delisting of the old STG to serve the token reissuance plan and officially stopped trading STG on March 14. Coinbase has not yet released any new updates regarding the future of STG.
As previously announced, we have disabled trading for Stargate V1 (STG). Your STG funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time. https://t.co/zAnHWlwLmW
— Coinbase Assets (@CoinbaseAssets) March 14, 2023
The price of STG does not have much reaction but mainly follows the general movement of the cryptocurrency market.