Steem set to seize $5 million from users, mysterious account rescues

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The Steem network is set to undergo another hard fork – including a plan to seize 23 million STEEM tokens, worth at least US$5 million [AU$7.6 million], but then there is a twist.

Blockchain platform Steem has been under a lot of criticism from the crypto community after it announced its plan to undergo another hard fork and seize $5 million worth of STEEM tokens from “malicious actors.”

Steem announces another hard fork for two reasons

According to Steem’s release, the hard fork is planning to address two things: power-down period and malicious accounts.

Steem’s power-down period is set to be reduced from 13 weeks to only four weeks. This move is set to provide an opportunity for both users and investors to access the platform more easily.

Included in this hard fork is a move to address the “attacks” that have been happening on the Steem blockchain. According to its release, they are planning to seize accounts that “pose a direct threat to the Steem blockchain.”

These accounts have been estimated to hold a total of approximately $5 million worth of STEEM tokens. An excerpt from the release states:

“This was included as judged to be an indispensable measure to improve the network stability and user environment of Steem.”

Justin Sun, chief executive officer of TRON who also recently bought the Steemit platform, clarified that he had no involvement in the hard fork. Sun also took a swipe against critics. This did not sit well with the public, though.

The $5 million scheduled seizure, with a twist

The hard fork planned to send the funds to a particular wallet for seizure. But in a surprising turn of events, the operator of the wallet sent the funds to the crypto exchange Bittrex instead.

The “white knight” under the account @community321 stated that these are “funds stolen by the Steem witnesses using HF23.”

In a memo that came with his transfer to Bittrex, he added that the funds must be “returned to their original owners prior to the fork.”

While it is only Bittrex who currently has access to the funds, the owners have become more hopeful over their funds’ status. Bittrex has not announced any plans yet to return the funds to anyone.

Apparently, Vitalik supports this move. In his recent tweet, he said that a chain is not a “property” of the maintainer.

Sun replied, stating that he is now working with law enforcement agencies to take the funds back. He maintained that these are funds stolen from Steem by Hive witnesses.

Although Steem’s plan to seize $5 million in STEEM tokens has been thwarted, the community is still yet to see how this turn of events will unfold in the coming days.

Featured image courtesy of dennizn/Shutterstock

Errol Villorente

Covering topics on technology, finance, and cryptocurrency. Believes in the promise that lies in the blockchain and cryptocurrency to change the international financial landscape.

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Errol Villorente

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