Stargate propose token reissue amid Alameda wallet hack, STG up 21%

Cross-chain protocol Stargate Finance has initiated a proposal to reissue 1 billion STG tokens, following concerns that Alameda’s wallet holding 10% of the token supply has been compromised.

During Stargate’s public sale on March 17, 2022, Alameda Research purchased 10% (100 million) of the total STG supply, with a commitment to lock up the tokens until March 2025.

In the wake of the recent FTX collapse, Alameda’s wallet was reportedly compromised. On Dec. 28, 2022, Arkham Intelligence flagged a malicious actor that had transferred over $1.7 million from Alameda’s wallet via several crypto mixers.

The malicious hack against Alameda has raised concerns that all tokens, including locked-up STG, may be stolen and dumped into the market.

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

“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.”

As per the proposal, Stargate will execute a snapshot on March 15, 2022, and reissue the new STG tokens to existing holders on a 1:1 basis.

Twenty-four hours before the snapshot, all exchanges and pools supporting STG will pause deposit and withdrawal requests. However, trading will be reinstated once the token re-issuance is completed.

The token re-issuance will ensure that Alameda’s 100 million STG holdings are not stolen and dumped into the market.

In addition, the Stargate Foundation said it would create a new multi-sig wallet to safeguard Alameda’s tokens pending the outcome of the trading firm’s ongoing bankruptcy process.

Stargate’s native token (STG) has surged over 21% in the last 24 hours and is up by 96% over the last 30 days, according to CryptoSlate data.