Steem to Freeze Another $5M in Tokens Associated With Hive Supporters

The controversy surrounding Justin Sun’s handling of the Steem (STEEM) network continues to grow, with Steem moving to freeze another $5 million in tokens held by dissident Steemit witnesses and stakeholders.

Network validators — called ‘witnesses’ — associated with Sun have sanctioned the move to freeze 23.6 million in STEEM tokens, accusing the account holders of posing an existential threat to the Steem network.

However, critics claim the hard fork vindictively punishes users who opposed the Tron founder’s takeover and supported the Hive hard fork in March — a community led-fork that froze the founder’s reward Sun acquired alongside Steemit, excluding him from the new network.

The hard fork follows a soft fork that froze 17.6 million STEEM held by former witnesses last month.

Steem moves to freeze $5m in user funds

The code for the scheduled fork includes the names of 64 users whose accounts and funds will be frozen with the coming upgrade.

In an interview with Joind, current Steem witness Triple A accused the account holders targeted by the fork of “spreading fake news,” “writing offensive and pointless spam comments,” and “publicly attacking users, collecting personal information, and threatening murder.”

But Twitter user and soon-to-be-sanctioned Steem user ‘pharesim2’ asserted that the witnesses “accuse all of us of criminal activity, without presenting any proof.” He added: “My stake is currently worth >80,000€. I bought 500,000 last year.” 

‘They Call Me Dan’ also tweeted that the upgrade will seize $600,000 of his funds.

Andrew Levine, the CEO and co-founder of OpenOrchard and former head of communications at Steemit, stated: "Obviously the newest Steem fork is deeply offensive to those who got into blockchain for its potential to create more trustworthy systems, but it is important to admit that the Steem witnesses and Justin Sun are playing by the rules of that game (DPoS).” 

“That shouldn't be heard as a defense of their actions, which are immoral on their face, but a rally cry to change what's broken,” he added.

Affected users mount pending class-action suit

In response to the fork, targeted users are asking the crypto community to forward a letter to exchanges urging them not to implement Steem’s proposed hard fork, threatening civil liability should they support the fork.

In response to the controversy, Ethereum (ETH) founder, Vitalik Buterin tweeted: “Shouldn't every Steem user just be moving to hive at this point?”

Justin Sun responded to Beterin’s tweet with “Shouldn't every #Ethereum user just be moving to #TRON at this point?”

Speaking at Virtual Blockchain Week at the start of the month, Sun criticized Hive for moving to freeze his funds, accusing the project of theft.