The Filecoin Foundation, a non-profit organization that supports the development of the Web3 storage protocol Filecoin, said it has a lawyer in China investigating the detention of the Filecoin Liquid Staking (STFIL) team. Withdrawals from the STFIL protocol halted after a developer wallet made unplanned upgrades and moved $23 million worth of Filecoin (FIL) tokens to an unknown address.

The STFIL team announced that technical members were detained by local Chinese police and mysterious upgrades and transfers took place during these detentions. This has left STFIL users wondering how they can get their funds back.

The Filecoin Foundation plans to allow its attorney to represent all staking providers and tenants in any court proceedings related to the incident. It also asked staking providers who lost their funds to provide their contact information through a Google Doc or Slack Channel set up for this purpose.

Filecoin is a decentralized storage protocol that allows PC owners to rent hard drive space to users with data storage needs. This process is called "FIL staking".

STFIL is a protocol that collects FIL tokens and staking them through a network of trusted storage providers. However, this refund process stopped processing in April after unauthorized upgrades and transfers were made.

STFIL isn't the only Web3 protocol facing criminal legal action in China. Users of the multichain cross-chain bridging platform have had more than $1.5 billion of their cryptocurrencies frozen after the protocol's development team was arrested by Chinese police. These funds have still not been recovered.

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