China, the eternal adversary of cryptocurrency, has directly targeted digital currencies through numerous bans, investigations, and lawsuits. The mining bans in 2021 made it difficult for investors in the country. However, there is still a massive number of crypto investors in the region, and many are able to conduct their transactions legally through Hong Kong. Yet, today’s topic is a bit more complex.
China and the Crypto Investigation
The Filecoin (FIL) staking platform STFIL recently announced that its main technical team is under investigation by Chinese police. The company shared this information from its official X account. Prior to this announcement, there were some notable events in the protocol. Code changes with protocol upgrades and the transfer of a large amount of FIL tokens to an unknown address from the STFIL platform were followed by the official announcement.
Currently, the whereabouts of 23 million dollars worth of FIL Coin is unclear. Cryptocurrency analyst Niraj Singh stated that he lost $80,000 in this incident and that what happened resembles a rug pull. Changes in the contract made it possible to move a significant portion of the funds to a single address, and customer assets were transferred.
Singh is requesting that the Filecoin Foundation freeze the address and make refunds to the affected FIL Coin investors. STFIL, the second-largest liquid staking platform in the Filecoin ecosystem, had a total locked value of 39 million dollars according to data from DeFiLlama. Following the incident, the size of assets in the protocol dropped to 19.2 million dollars.
Comments on FIL Coin
Immediately following the announcement, the price of FIL Coin did not experience a significant fluctuation. The price, which fell slightly to $8.85, remained relatively strong. The long upper wick on the chart is largely related to the BTC drop, but the long tail indicates that buyers are still in the game.
In the short term, closures above $8.8 are important for a price increase. If FIL Coin can maintain its current level, it may see prices around $10 again. A short-term rally could lead to a re-targeting of $11.86.
The price of Bitcoin was back to $70,500 at the time of writing, as we warned hours ago. Although it briefly dropped to $69,570, it is currently holding above $70,000.
