Mantle Consumer Raises Eyebrows On Proposed Auto Migration Of FTX $43 Million BIT Tokens

A Mantle neighborhood member has proposed the restriction on an automated migration of FTX BIT tokens to Mantle (MNT) citing disqualifying elements.

A debate sparked by members of the Mantle Decentralized Autonomous Group (DAO) on the continuing token migration of sure firms together with the FTX change has gone mainstream because the platform seeks to unify ecosystems.

Not too long ago, the BitDAO community proposed a merger with Mantle which might see each organizations function underneath Mantle. Whereas all of the strikes to attain this have gotten optimistic suggestions from the neighborhood, the consumer of the $43 million BIT tokens held by FTX continues to pose a setback.

In November 2021, BitDAO entered into an association with Alameda, a deal that noticed BitDAO swap 100 million BIT tokens for about 3.3 million FTT, FTX utility tokens. 

As a part of the deal, each firms agreed to carry one another’s belongings for 3 years which was to be due on Nov 2, 2024. The collapse of FTX final yr had a ripple impact on BIT’s worth because of their association following speculations of FTX promoting tokens to boost funds.

With the proposal to unify BitDAO and Mantle, all BIT holders will routinely have their tokens transformed to MNT. Whereas the proposal acquired overwhelming assist, the matter of FTX’s BIT has confronted a backlash as members argue for a suspension of the method. 

For the time being, the on-chain migration contract has been quickly suspended till the ultimate vote on FTX-held tokens. As a brief repair, some members suggest a brand new MNT migration contract to limit belongings held by Alameda Analysis. 

From FTX-linked belongings to FTX-linked financial institution

FTX-linked Farmington State Financial institution has been sanctioned by the Federal Reserve Financial institution after it improperly delved into digital belongings with out prior authorization.

Based on the enforcement motion, the one-branch lender is meant to wind down actions after it adopted a pro-crypto marketing strategy in 2022. 

Per the motion, the financial institution is now barred by the Federal Reserve Board and the Washington State Division of Monetary Establishments for sure banking actions together with “making dividends or capital distributions, dissipating money belongings and fascinating in sure actions,” with out the consent of its supervisors. 

Allegations leveled towards the financial institution embody facilitating the change of stablecoins and issuance for 50% of mint charges. 

The collapse of FTX has prompted members of the digital asset neighborhood and the broader financial sector to be skeptical of former FTX-linked merchandise because of unknown publicity to the change. 

This yr, prosecutors seized $50 million from the financial institution claiming it was linked to Sam Bankman-Fried’s plan to defraud buyers after Alameda Analysis acquired an $11.5 million stake within the financial institution final yr.