Filecoin liquid staking platform core group under investigation by Chinese police

The core technical team behind the STFIL protocol based on FileCoin has revealed that they are being investigated by Chinese authorities.

Over the past couple of days, there have been unexpected updates to the protocol, funding to various addresses.

Secret Token Transfers and Updates

The news came out in a public post on the STFIL protocol on X, the core technical team of the STFIL believe that the local Chinese police are investigating. He mentioned that lawyers have been hired to understand the current situation and provide legal assistance to the arrested individuals.

We believe that the STFIL core technical team is being investigated by the local Chinese police, and we understand that lawyers have been hired to understand the current situation and provide legal assistance to the individuals in custody.

Last week, the core technical team…

— STFIL Protocol 🏔️ (@stfil_io) April 9, 2024

While the core technical team was arrested last week, FIL tokens on the STFIL platform were secretly transferred to an external address, raising red flags among investors and stakeholders.

The transferred funds are traced to the foreign address disclosed in the STFIL protocol. This address currently holds 2.5 million FIL tokens, worth approximately $22 million. The post also includes the original address of the protocol for comparison.

Adding to the situation, there have been reports of unusual and unplanned modifications to the protocol over the past two days.

In response to these developments, the STFIL team is seeking assistance from the community to track down the unknown address and explore measures to protect the interests of stakeholders.

Filecoin mining pyramid scheme case

Meanwhile, in August last year, a Chinese court began indicting the Chinese mining company FileCoin and its four executives accused of organizing an $83.3 million pyramid scheme.

Local media reported that Shenzhen Shikongyun Technology and its four executives, including the company's founder Lai, were charged with organizing and directing activities related to the pyramid scheme.

According to the prosecution, the accused cheated their customers by issuing FIL coins on the company's platform. Individuals must meet certain criteria to participate, such as paying a fee to purchase or lease mining equipment.

STFIL, a liquid staking protocol built on FileCoin, allows users to earn high rewards on their FIL tokens with the ability to use them in decentralized finance (DeFi). In exchange for their deposits, users receive Liquid Staking Tokens (LSTs).

According to data from Defilama, the platform's total value is locked at around $40 million, a nearly 60% drop since early April.