• 22 June, 2024
News

Stargate Proposes Token Reissue Following Alameda Wallet Hack

According to a recent blog post, the DeFi protocol bridge Stargate has announced plans to reissue all of its Stargate (STG) tokens. 

On March 15, the reissue will take place with the aim of eradicating the risk of unauthorized transfers of STG from hacked Alamada wallets, as stated by the Stargate DAO.

After StargateDAO discovered a “significant threat” to its protocol-owned liquidity (POL) and token holder security originating from security flaws at the defunct crypto quant trading firm Alameda Research, calls for the reissue have been made.

Alameda Research bought 10% (100 million) of the STG supply at the Stargate public sale on March 17, 2022, with a promise to keep the tokens locked up until March 2025.

Alameda’s wallet reportedly became vulnerable after the most recent FTX collapse. A malicious actor who had transferred more than $1.7 million from Alameda’s wallet using a number of cryptocurrency mixers was identified by Arkham Intelligence on December 28, 2022.

Concerns have been raised that all tokens, including locked-up STG, may have been stolen and dumped into the market as a result of the malicious hack against Alameda.

To prevent the bad actor from claiming the tokens and dumping them into Stargate’s liquidity pools, the Stargate DAO has proposed to reissue all STG tokens.

Without a token re-issuance, a malicious actor with access to Alameda’s private keys could claim the Stargate tokens from the contract as they vest and misappropriate them. reads the proposal.

According to the proposal, Stargate will take a snapshot on March 15, 2022, and distribute the newly created STG tokens to existing holders at a 1:1 ratio.

One day prior to the snapshot, deposit and withdrawal requests on all STG-supported exchanges and pools will be temporarily suspended, but trading will resume once the token distribution is finished. The re-issuance aims to protect Alameda’s 100 million STG holdings from theft and sudden market sale.

In addition, the Stargate Foundation announced that it would develop a new multi-sig wallet to protect Alameda’s tokens while the trading company’s ongoing bankruptcy process is still ongoing.

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