Dear esteemed members of our community,
I reach out to you with a crucial message.
I regret to inform you that StakeCube will be temporarily halting deposits, trading, and withdrawals with immediate effect.
The past year has been challenging, and despite my/our efforts to keep the platform afloat, the recent events in the crypto space have made it increasingly difficult to do so.
I’m not going to blame our competitors, because that’s just an easy excuse – and I would like to clarify, this message will also shock the team members, they learn this news just now, like everyone else.
Technically, SC is and was insolvent for quite some time now, but still we survived longer than a lot of others.
In an effort to turn things around, we implemented drastic changes such as introducing withdrawal fees, terminating node hosting contracts, and implementing a new interest system. Additionally, many team members agreed to work on a voluntary basis. However, these measures ultimately resulted in the opposite effect.
Long story short, there is no good way to say this:
Due to the recent high volume of outflows, we will very soon be unable to meet our obligations to process user withdrawals requests.
While only a small number of coins are affected in terms of a balance sheet deficit (BTC, DOGE, LTC, DASH, and a handful of small caps), these are obviously the most valuable. The deficit ratio of assets vs. liabilities is high, with BTC and DOGE at 95%, LTC at 60%, and DASH at 10%. Most of the other coins are fully backed, actually overcollateralized.
The deficit was mainly caused by the illiquidity and decreasing value of our StakeCubeCoin, which is used to pay for things like servers and mining machines but instead was held to back a positive balance sheet. I am willing to provide a more detailed explanation if needed, but it is unlikely to make a difference.
So, everything was just a lie?
No, it was business as usual for everyone, everything announced in the newsletters (roadmap, v3 development, etc.) did happen, and it was never the plan to act like this – on the contrary – everyone in the team worked their ass off, no matter all the FUD coming from the community, in the hope that the crypto market would recover and we would be able to release updates and v3 in time to get back on track.
What happens next?
As for the future, I do not know. This announcement is the worst thing that has ever happened to me, and I fully understand the consequences. I’m at my limit, physically as well as mentally, knowing I hurt many people.
However, my first priority is to talk to some of the core team members now, so they can take over control.
I will also start to return coins back to SC which are currently held in wallets they don’t have access to, starting right away (incl. the priv keys for the > 1mil SCC funds).
I truly believe the most important team member ain’t gonna leave, those are good and honest guys and they will do everything they can to make things right for you, at least as best as possible.
The site and wallets will still stay up for at least a year or so as the contracts for the servers have been signed long term, it was never the intention to „break up“. The dev & tech team has access to all of them, they can take backups, just to be sure.
While this may sound cringe now from your perspective, I actually would recommend giving the team a day or two to let this sink in and allow them to map out a plan moving forward. As said, the site will stay operational as well as masternodes and so on. I really hope someone is willing to take the lead and act in a responsible way like spread deficits, unlock withdrawals for not affected coins, find investors, distribute SCC to affected users, work out a recovery plan; just to name a few – no matter what, I will be there to help with everything.
Many team members are also the biggest investors into SC and its coin, many community members have high interest to keep SC running, one way or another, especially after investing even more nowadays. We build an amazing ecosystem with the platform, SCC, SCP, eSports as well as coin explorer, botcube and what else. There are a lot of talented people with an interest to keep things going.
I still do see a lot of opportunities, including a bail out (it’s actually not that „much“ compared to other examples we saw last year), let others continue SC if they want or even by making all of the (v3) development open source, especially now there are signs of the market slowly recovering.
But is there a chance to make users whole?
To be honest, this will be hard. Maybe there is some investor interested; maybe over time, like after the hack in 2018. I will/can not promise anything like others do by saying „we work on a new product“, „we focus on stabilizing our liquidity“ or things like that. This may sound better for the user, but will just delay the inevitable.
Anyways, I want to make it clear I will not run away but you will understand that I’m also not going to argue with keyboard warriors out there. I have already gone through this once, including death threats and such. I’m very well aware of the anger you have, but I won’t be able to take it away from you.
That said, be assured no channel gets deleted by me but I learned my lesson to ignore “social“ media and will leave community channels, not because I’m afraid or don’t want to take responsibility but to put my time and focus into communication with the team to help to work out solutions, share everything needed. I will be in touch via Discord DMs with a handful of team members to answer any questions. Support will probably be flooded, so I think it will be better to wait for official communications from other team members about next steps. For other, non-support inquiries please use: official@stakecube.net
Next, I want to highlight, no money was ever stolen, all of it went into paying development, team, and servers – but similar to other cases, the system was not prepared for a bear market, and yes, I’m happy to prove this anytime needed.
Nevertheless, I still can imagine all the „wen jail“ type of messages I will get and I don’t expect you guys to just accept it, but straightforwardly spoken, we all are aware of the risks, especially after last year’s events; from both perspectives.
Remember, StakeCube is not insured or a licensed company, taking terms into account, going through an insolvency process will end up in users losing even more value and the risk we get forced to publish user information. But I’m also ok to go this route, if needed.
So waiting any day longer, will make things just even worse. Even if it’s late, it’s not too late.
Last but not least, I do apologize to all of you who have been affected by this, and to everyone I kept in the dark up to literally the last second.
I’m grateful to all of our users for your continued support over these 4 years – and I honestly wish the SC saga continues as it surely would be possible, the right way.
Oleg
Friday, 13th January 2023