Our weekly roundup of news from East Asia curates the industry’s most important developments.
Chinese police bust another crypto project
Funds are missing from Filecoin liquid staking protocol STFIL after an investigation by Chinese police.
“We believe that the STFIL core technical team is under investigation by local Chinese police,” said STFIL developers in an April 9 tweet, “We understand lawyers have been hired to understand the current situation and provide legal assistance to the individuals under detention.”
Despite assurances, however, users’ staked Filecoin on STFIL were moved to an unknown address while the protocol’s staff were detained, which also coincided with several “abnormal, unscheduled upgrades.” Blockchain data indicate that over 4.3 million FIL tokens, worth around $40 million at the time of publication, have been transferred to an unknown address.
Meanwhile, data from DeFi Llamashowsthat the protocol’s total value locked has fallen from $95 million to $55 million in the past month. Law enforcement in the country typically target crypto projects they believe have either bridged or processed tainted money as a result of illegal operations.
Prior to its collapse, STFIL offered users up to 9% yield per annum by staking their Filecoin and receiving investment proceeds generated from their collateral. The STFIL pool was the second largest Filecoin staking protocol at the time of incident with around 2,500 users.
This was not the first time Chinese police have shut down a Filecoin protocol. In November 2021, a $55 million Filecoin mining rig was raided by Chinese authorities over allegations of operating a multi-level marketing scheme and money laundering.
In the past year, Chinese authorities have increasingly cracked down on crypto projects operating in the country, often causing collateral damage for foreign users of such protocols. Last year, cross-chain bridge Multichain was shut down after Chinese police detained its…
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