Starkware Bows to Pressure over Lost Funds

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  • Ethereum layer 2 project Starkware has faced backlash over wallet balances that were wiped this week during a long-planned wallet upgrade
  • Users were warned for months to take action to prevent loss but some didn’t receive them
  • StarkWare has agreed to restore access to affected users’ crypto, though the process may take a day due to technicalities

Ethereum layer 2 solution Starkware has bowed to pressure from its community and has allowed access to funds belonging to users who lost them after the platform performed a planned upgrade. Starkware had warned users on multiple occasions that their funds would be lost if they didn’t take action ahead of the upgrade, but some clearly didn’t see the notices and were shocked to see that their balances had been wiped when the wallet upgrade took place this week. However, the project has agreed to allow customers access to their funds following backlash on social media.

Warnings Weren’t Heeded

Starkware has been warning users of the risk to their assets for many months, putting banners on its website and in the wallet itself. However, this would have been no good for those who didn’t check their holdings on a regular basis, as some found out when they went to check on their portfolio:

According to Starkscan, over $78 million in assets are currently locked within Starknet accounts, with approximately $546,000 in “out of date” accounts. About 15% of the network’s 2.1 million accounts are classified as out of date, emphasizing the scale of the challenge StarkWare faces in managing such transitions while safeguarding user assets.

Social Media Pressure Pays

Starkware had said that the losses were out of its control, blaming a wider upgrade on the blockchain, but many users took up the cause on social media, complaining at Starkware’s actions. The company eventually buckled to the pressure and announced that it would temporarily allow affected users to regain access to their funds although, due to technical complexities, it might take up to a day for the funds to reappear in these wallets.

Despite the warnings issued by Starkware ahead of time, many users expressed dissatisfaction over the project’s initial handling of the situation with some questioning why alternatives weren’t explored to prevent such losses.