An internal conflict at the privacy-focused Secret Network has resulted in at least one validator throwing in the towel.
The major Validator of the Secret Network, the Layer 1 blockchain for privacy smart contracts, has announced that it will no longer provide network nodes or support.
On January 29th, prominent validator Smart Stake announced that it will disable its secret network validators on February 21st.
Smart Stake mentioned “difficult/stressful validation activities cost/burden of validation activities and recent events” as reasons for termination of service.
Smart Stake is a staking and validation provider that supports multiple networks including Crypto.com, Polygon, Cosmos, and until recently the Secret Network.
The move comes amid revelations by Secret Labs founder Guy Zyskind about the financial transparency of the Secret Foundation.
On January 28, Zyskind published allegations that the foundation and its founder and CEO Tor Bair “sold off a significant amount of USD worth of SCRT” in late 2021, the original token of the Secret Network.
“Tor claimed a significant portion of that revenue,” he claimed. Zyskind also mentioned $ million in revenue to the fund in its Q2021 report but did not mention the withdrawal.
“This activity was not reflected in any of the financial statements provided to the community by the foundation, which Tor registered several times as a non-profit organization.”
But Bair presented his version of events on the same day at the Secret Rule Forum. He realized that the withdrawals were part of the tokens given to his stock.
“Instead of paying my won tokens in December 2021, I exchanged some of the won tokens in USD at an OTC price, and the Secret Fund distributed those funds as dividends.”
He added that “this information is verifiable in our 2021 tax returns, which Labs previously audited and I previously disclosed this information to them.”
An ongoing internal management conflict has disrupted at least one network validator and ecosystem community.
SCRT prices remained immune to internal disturbances, stabilizing at $0.80 last week. However, the token is down 92% from its October 2021 all-time high of $10.38 and Bair’s sale price of $7.
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