• Fri. May 24th, 2024

Secret Foundation Faces Calls For Return Of Funds And More Transparency

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Jan 30, 2023

The Secret Network community is unhappy about what they have learned after Tor Bair’s secrets have been revealed.

Formerly known as Enigma, the Secret Network is a Layer-1 blockchain focused on privacy and the mission of the Secret Foundation is to support its global community and presence.

The troubles

Last year, troubles had begun to surface when it was discovered that the Secret Foundation had been built for functioning as a for-profit organization and not a non-profit one, as many had been led to believe.

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During the course of 2022, there had been growing frustration in the Secret Network community because of the lack of accountability and the opacity of the foundation.

A proposal had been passed by the community on August 1st, which was aimed at boosting the transparency into the finances of the foundation.

The foundation had not taken any action or made any sort of response by the time December arrived and the broad plan of reforming it had come crashing down.

Instead, there had been accusations of alleged personal intimidation and mishandling of funds. The Secret Network’s developers are SCRT Labs.

The CEO and founder of SCRT Labs, Guy Zyskind, said that they had come to the conclusion that it was time for them to speak out.

The conflict

On Friday, the conflict had come to a head when both Bair and Zyskind issued statements on the Secret Network community forum.

Zyskind posted an hour before Bair, but the statements from the two had presented contrasting narratives.

Zyskind stated that a ‘substantial’ number of SCRT tokens had been sold by the Secret Foundation in late 2021 in an over-the-counter trade worth $4 million.

He said that this had resulted in losses of about $250,000, which had not been reported, even though the fourth quarter’s 2021 Transparency Report of the foundation shows an outflow of 645,989 tokens.

The transaction related to these SCRT tokens is mentioned in December 2021 and they had a value of $4,340,292.

Bair’s response

The statement from Bair says otherwise, as he said that the OTC trade involving the funds of the foundation was actually his own SCRT tokens, which had been invested in June 2021.

According to Bair, he had opted to not take the SCRT tokens and had chosen to sell them OTC so the funds could be distributed to him by the Secret Foundation as a dividend of $2.625 million.

As Secret Foundation Inc. is registered in Illinois as a for-profit business, then Bair can get dividends, but shareholders should have been issued a notice beforehand, which was not done.

In addition, the said dividend should also have been reported in the company’s tax filings, which Bair claims were reviewed by SCRT.

Whether financial misconduct happened or not, Bair has admitted that changes were required for Secret Foundation to move forward.

He said that he wants to be part of the changes. The community called for the return of the funds, but Bair said that this would be damaging and destructive to Secret Network.

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