Clouds of drama obscure IOTA’s new dawn as co-founder threatens legal action

IOTA co-founder David Sonstebo has written an angry blog post in which he claims that the IOTA Foundation made decisions impacting him without consulting him.
David’s outrage is in regards to some 65 Ti, worth over $130 million, that have been the subject of intense infighting in the IOTA community.

IOTA’s day of celebration over its ‘New Dawn” was somewhat hindered by an angry tweet from David Sonstebo, co-founder of IOTA and now an ex-board member. His anger may be justified, as some big decisions were made that potentially affect him, and he says he was not consulted. Sadly, IOTA has a history of in-fighting amongst cofounders, and the community has had to take sides before, first as Come from Beyond (Sergey Ivancheglo) was removed from the Foundation, and then David Sonstebo.

https://t.co/4SExKGobIR

— David Sønstebø (@DavidSonstebo) April 29, 2021

The 65 Ti conundrum

The particulars of the current argument center around 65 Ti – that’s teraiotas, or 65 million Miotas (at $2/Mi we are talking $130 million USD). These 65 Ti have an unusual history: some are from the original crowd sale—about 1% of tokens were never claimed; some were never migrated in previous network upgrades; and some may come from a third source (details are fuzzy).

David’s company, IOTA AS, has had legal custody of the tokens. The twist is that with the Chrysalis migration, Dominik Schiener and the IOTA Foundation proposed that those funds be placed in the custody of the community as an Ecosystem Development Fund that gets allocated based on how the community votes. Dominik appears to have locked David out of accessing the funds, but proposed that a fork of IOTA be created (the IOTA AS fork) wherein David still had custody of the funds. This fork proposal is not very realistic, so it seems more like a personal snub to David than an actual proposal.

Today David has written that his hands are tied-that he must take this matter to the authorities since he has a legal obligation to administer the funds but is now left in “an impossible legal and logistical position.” He explains that by IOTA AS holding the tokens in custody, he saved the IOTA Foundation from potential ruin when an upset Sergey Ivancheglo demanded the funds with the intention of dumping them on the market.

He then states, “There was consensus in the Board and Supervisory Board that if those tokens were ever released from their limbo state, it was obvious that IOTA AS had full discretion over their fate as it had created them in the first place.” However, he does not clarify in what legal way “it was obvious.”

[Also Read: IOTA Making The Pie Bigger]

The Trinity Moonpay hack

A third twist comes in regards to the victims of the “Trinity Moonpay hack” of February 2020, where a third-party application on the Trinity wallet allowed a hacker to siphon 8.55 Ti from people’s accounts. This hack led to a quick decision by the IOTA Foundation to shut down all value transfers on the network, which continued for several weeks, drawing wide criticism of centralization from the broader crypto community.

Shortly after, David promised that he would personally reimburse all the people who had been robbed. However, now he says he was thinking of “potentially utilizing the custody tokens of IOTA AS” rather than paying from his own funds. It is unclear whether any of the victims have yet been reimbursed.

In spite of this new drama, the Chrysalis network itself is working extremely well. Dominik has not mentioned anything more about the 65 Ti today but did take the time to comment, “The IOTA upgrade is live and casually cruising at 250+ TPS. Running reliably without any hiccups or problems. This is what production-readiness looks like.” Perhaps the sun will break through the clouds after all!

Der Beitrag Clouds of drama obscure IOTA’s new dawn as co-founder threatens legal action erschien zuerst auf Crypto News Flash.

(Visited 2 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *