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Ethereum layer 2 project Starkware has recently faced backlash over wallet balances that were wiped this week during a long-planned wallet upgrade. Over $78 million in assets were locked in accounts with approximately $546,000 being in out of date accounts. Despite warnings to users to take action to prevent loss, Starkware agreed to restore access to funds of those affected by the upgrade.
The outcry stemmed from those unaware of the upgrade and unaware of the risk to assets. Starkware had flagged the risk for many months, through banners on their website and in the wallet itself – however, those that did not regularly check their holdings were typically the ones hit.
Starkware initially responded to the backlash by stating the losses were out of their control, blaming a wider upgrade of the platform for the issue. Those affected took up the cause on social media, calling for a resolution from Starkware. After a period of waiting, Starkware bowed to pressure and agreed to temporarily allow affected users to regain access to their funds.
The process may take up to one day to execute, due to technical complexities, but users can be assured that Starkware is working to restore balances as quickly as practical. Though the project had given clear warnings of the risk, some frustrated users are still questioning why alternatives weren’t explored to prevent such losses in the first place.
Ultimately, for those affected, Starkware has been able to recognise the gravity of the situation and resolve the issue to the best of their technical ability. Despite the warnings issued, the loss of funds could have been far worse had Starkware not come through and restored access. For those still new to the cryptocurrency space, this issue acts as an invaluable lesson in the importance of keeping track of funds within a self-custody wallet