Daring plan to save $5M in crypto from Steemit fails

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Memeinator Coin

Daring plan to save $5M in crypto from Steemit fails

By Benson Toti - min read

It’s been a rollercoaster ride for crypto enthusiasts over at the Steem Platform; however, it looks like things are coming to an unpleasant end. 

The Steem Platform, a social blockchain that rewards users for sharing content, was slated for a controversial upgrade on Wednesday, May 20th.

In December 2019, the Steemit blogging platform was purchased by the CEO of Tron, Justin Sun. A few months later in February 2020, he took over the Steem blockchain platform. This is a widely controversial move, with many accusing Sun of “bribing his way to the top of the Steem hierarchy.”

The takeover prompted a large portion of the Steem community to build its own blockchain, called the Hive, and migrate over to it. However, some funds still remained in Steem.

The recent upgrade was developed behind closed doors and would allegedly seize $5 million Steem from accounts that opposed the takeover. Word of this event was only released on Tuesday, May 19th.

Steem witnesses, who are in charge of running the network, claim that the accounts pose a “direct threat” to the blockchain.

While the upgrades plan to go ahead (the funds were seized and then sent to a wallet designated for safekeeping), the person in charge of the wallet instead sent the funds to Bittrex. The coins, which amounted to $5 million at the time of transfer, were not sent to a specific person’s wallet but to the exchange’s main wallet. This indicated that whoever was behind the transfer had no intention of keeping it for themself.

The mystery sender also left a note typed out in Korean on the blockchain for Sun, which stated simply, “Stealing is bad.”

Victims of the seizure viewed this event as a symbol of hope. Dan Hensley, who has around $1 million at stake in the update, told Decrypt that if it would have been an entirely different story if the funds were transferred to a Poloniex exchange.

Hensley likely refers to Sun’s ownership of the Poloniex cryptocurrency exchange.

“An anonymous hero. It said ‘Stealing is bad’ to Justin Sun. So it was a double-agent helping the good guys, who is anonymous at the moment,” Hensley added.

The victims initiated discussions with Bittrex to start the process of getting back their funds. However, it appears that the exchange had other plans.

In a post entitled, “Response to the Steemit Situation,” the company’s stance on this sounded largely like they were choosing not to interfere any further.

“What happened during the hard fork and the allegation that the “community321” account was hacked outside of the Bittrex ecosystem are two separate issues. We cannot conflate these two issues.” the post highlighted.