Mantle halts token migration amid FTX fallout

Participants DAO Mantle discuss a proposal to ban victims of the collapse of the FTX exchange and Alameda Research from automatically converting their BitDAO (BIT) tokens into MNT.

In November 2021, BitDAO swapped 100 million BIT with Alameda Research for 362,315 FTT tokens from FTX. The parties promised not to liquidate the assets for three years.

In 2022, amid problems at the exchange and its affiliated firm, the community suspected them of dumping BIT and causing a price drop. At that time, Alameda head Caroline Ellison denied the firm’s involvement in the dump.

According to Colin Wu, the company currently holds 98.86 million BIT worth about $42 million.

In May 2023, BitDAO announced a merger with L2-project Mantle Network to create a unified ecosystem under its brand. The process envisages exchanging BIT for MNT, which will remain the sole governance token in the community.

A user nicknamed Cateatpeanut proposed scrapping the automatic conversion of FTX Group assets due to “disqualifying factors”. Pending the discussion, the token migration process has been halted.

Most commentators at the time supported Cateatpeanut’s proposal. However, one community member disagreed with the decision. He argued his position had good, in his view, prospects for a restart of FTX. The user believes that amid regulatory issues Coinbase and Binance, a refreshed and fully compliant exchange would become a “safe haven” for traders. Listing MNT on it would be important for the project, but unlikely if restrictive measures are adopted, he says.

In July, Mantle developers launched the alpha version of the mainnet. A month after the mainnet began, the ecosystem’s TVL exceeded $40 million.