An important validator for the protection of personal information smart contract layer-1 blockchain Secret Network has announced that it will no longer provide nodes and support for the network.
On January 29th, the main Smart Stake validator announced that they would close their secret network validation nodes on February 21st.
Smart Stake cited "complex/stressful validation operations, the costs/efforts of validation operations and recent events" as reasons to withdraw services.
Smart stake is a provider of sequencing and validation services that supports multiple networks such as crypto.com, polygon, cosmos and, until recently, secret network.
PSA for @SecretNetwork delegates of Smart Stake:
Smart Stake will be shutting down its Secret validator on 21st Feb. Please re-assign to a different validator.
Reasons: 1) Complex/stressful validator operations on 2) Cost/effort of validator ops 3) recent events
— Smart Stake (@SmartStake) January 29, 2023
This decision comes in the midst of the revelations of the founder of Secret Labs, Guy Zyskind, concerning the financial transparency of the Secret Foundation.
On Jan. 28, Zyskind made public allegations that the Foundation and its founder and CEO, Tor Bair, “sold a substantial amount of USD worth of SCRT,” — the native token for the Secret Network — in late 2021.
"for having received an important part of these revenues," he said.
Zyskind also mentioned a $4 million cash flow for the Foundation in its fourth quarter 2021 report, but did not mention the withdrawal.
“This action was not disclosed in any financial reports provided to the community by the Foundation, which was introduced by Tor as a non-profit organization on several occasions.”
Looking forward to resuming writing math proofs and bad code after all the @SecretNetwork drama
— Guy Zyskind (@GuyZys) January 29, 2023
Bair did, however, present his version of the events at the Secret governance forum the same day. He stated that the withdrawals were part of his share of vested tokens.
"Rather than paying my chips by December 2021, I converted my token portion into OTC dollars and the secret foundation distributed those funds in the form of a dividend.”
He went on to say that "this information can be verified in our 2021 tax returns, which have already been reviewed by the laboratories, and I have already shared this information with them."
The continuing internal leadership conflict has shaken at least one supplier of network validators and the ecosystem community.
Related: Secret Network resolves network vulnerability following white hat disclosure
SCRT prices have remained immune from the internal imbroglio, consolidating around the $0.80 level for the past week. However, the chip is down 92% from its historic high of $10.38 in October 2021, and down from Bair's $7 sales price.