The team responsible for the Filecoin-based liquid staking platform, STFIL, has disclosed they are being investigated by the police in China, following the transfer of tokens to an unfamiliar address now holding an estimated $22 million in FIL tokens.
STFIL Protocol’s Ongoing Investigation
STFIL Protocol shared through a statement on X that the investigation by Chinese authorities is centered on its core technical group. Legal counsel has been engaged to navigate the situation and assist those who have been taken into custody.
This announcement follows incidents last week where, amidst the team’s detainment, FIL tokens were shifted to an unknown address, prompting concern among the protocol’s community and investors.
The protocol has publicized the address in question, which is linked to the possession of 2.5 million FIL tokens valued at around $22 million, alongside their original address for verification purposes.
Reports have also surfaced regarding irregular and unplanned modifications to the protocol, adding layers of complexity to the unfolding situation.
The STFIL team is now calling on the community for help in tracing the mysterious address and deliberating on steps to protect the interests of stakeholders.
Filecoin Mining Scheme Under Scrutiny
In related news, a Chinese Filecoin mining enterprise and its four executives are facing legal action for allegedly running an $83.3 million pyramid scheme, as per a case that began in August of the previous year. Shenzhen Shikongyun Technology and its leadership, including founder Lai, are accused of orchestrating a pyramid scheme under the guise of FIL coin mining.
Prosecutors claim the scheme involved enticing participants with the promise of profits from mining on the company’s platform, requiring them to buy or lease mining hardware and meet other criteria for participation.
STFIL offers a mechanism for Filecoin users to stake their FIL tokens, earning rewards while maintaining liquidity for use in decentralized finance applications. In return, depositors are issued liquid staking tokens (LSTs).Data from DefiLlama indicates the total value locked (TVL) on the platform is approximately $40 million, which has seen a significant decrease of nearly 60% since the start of April.