Second-largest decentralized finance (DeFi) protocol on the peer-to-peer network for file sharing and storage service Filecoin, STFIL Protocol (FIL), announced that the Chinese police are currently investigating its core technical team.
The core technical team of the STFIL Protocol was detained last week. Subsequently, 2.5 million FIL, equivalent to $22 million, was transferred from the STFIL platform to an undisclosed external address. Additionally, in recent days, there have been unexpected and irregular upgrades to the protocol, coinciding with the relocation of the funds.
The STFIL Protocol team emphasized in a post on social media platform X that they have retained legal counsel to assess the current situation and offer legal support to the individuals currently detained.
We believe that the STFIL core technical team is under investigation by local Chinese police, and we understand lawyers have been hired to understand the current situation and provide legal assistance to the individuals under detention.Last week, when the core technical team…
— STFIL Protocol (@stfil_io) April 9, 2024
As of the writing time, the total value locked (TVL) in the STFIL protocol amounts to $39.5 million. According to data obtained from DeFi Llama, this figure has decreased by approximately 60% since early April.
STFIL Protocol Empowers Filecoin Storage Providers In DeFi Ecosystem
The STFIL Protocol is a community-owned liquidity protocol based on the Ethereum Virtual Machine (EVM). It facilitates users in earning block rewards without locking up assets or managing Storage Provider infrastructure. This feature allows all interested participants to become Filecoin Storage providers without trust and enables them to share the benefits.
The STFIL liquid pledge protocol is designed as a Filecoin liquid pledge system to enhance the network’s overall service quality. It enables users to deposit FIL tokens into the STFL smart contract and receive stFIL tokens in return, which can be used to earn rewards from Filecoin Storage Providers. Additionally, Filecoin Storage Providers can pledge nodes, allowing them to leverage the liquidity of the pledged FIL within the node and lend FIL to STFIL.
Notably, Filecoin has recently announced growth in its DeFi ecosystem in terms of volume and value, as various key components have converged to foster further network expansion. It highlighted its collaboration with the STFIL platform and GLIF and SFT Protocol to enhance Filecoin’s on-chain capital markets. As a result, several new lending and staking projects, such as Web3mine in partnership with Filecoin and Repl.fi, have been introduced.
Despite recent developments, Filecoin has also come under scrutiny from Chinese authorities. Last year, according to the court’s findings, a Chinese local court accused Shenzhen Shikongyun Technology, the largest firm in China related to Filecoin, of generating $83.3 million through engaging users in coin mining on its platforms.
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